4 min readMay 18, 2026 06:50 AM IST
First published on: May 18, 2026 at 06:34 AM IST
Given the recent geo-political headwinds and partly triggered by Microsoft’s decision to suspend IT services to Nayara Energy, an Indo-Russian energy company, the Indian government is reportedly exploring the idea of an anti-sanctions law. The law aims to shield domestic firms from extraterritorial sanctions imposed by foreign countries. It seeks to establish a legal framework that would invalidate foreign rulings and sanctions, with the aim to protect Indian companies from penalties that may threaten their commercial operations.
An anti-sanctions regime is commonly known in international law as a “blocking statute”. It is a mechanism used by countries to reduce or mitigate the impact of sanctions on their citizens and businesses. Among the tools available under such a regime: Non-recognition of foreign judgments, clawback rights, and mandatory reporting requirements, all of which aim to prevent nationals and entities from complying with the sanctions, and by extension, with any foreign court judgment that gives effect to them.
India is perhaps the only major economy in the world without an autonomous sanctions regime. The EU Blocking Regulation of 1996 is widely perceived as the clearest legislative embodiment of an anti-sanctions regulation. The US has always used sanctions as a part of its statecraft and economic policy. Russia responded to the sanctions imposed by the US and EU in the aftermath of the Ukraine conflict by making amendments to its Russian Commercial (Arbitrazh) Procedure Code, giving exclusive jurisdiction to Russian courts over any dispute involving sanctioned entities, including the power to pass anti-suit injunctions against proceedings in other jurisdictions.
Delhi has traditionally opposed unilateral sanctions as a form of economic protectionism. That said, India does have a regulatory framework for imposing sanctions, which is primarily implemented to give effect to resolutions passed by the United Nations Security Council. These resolutions are ordinarily implemented through mechanisms provided under the United Nations (Security Council) Act, 1947, the Foreign Trade (Development and Regulation) Act, 1992, and by way of amendments to the Foreign Trade Policy.
From an enforcement perspective, it is important that the proposed anti-sanctions law maintains the objective of safeguarding India’s economic sovereignty and autonomy against disruptive sanctions. As a signatory to the New York Convention, it should refrain from creating hurdles in the enforcement of foreign decrees and awards passed in countries which are also signatories to the convention or even those countries which have reciprocal relationships and recognise Indian judgments as enforceable decrees.
India’s jurisprudence on sanctions law is currently being tested before the Bombay High Court which is currently hearing a commercial suit filed by a Russian fertiliser company seeking the enforcement of a decree passed by a Russian Commercial Court against an Italian contractor by attaching and seizing its assets located in India. In this particular matter, the parties had agreed to and were contesting an ICC-administered arbitration seated in London. Since the parties had an arbitration agreement, the English Courts passed an anti-suit injunction restraining the continuation of the proceeding before the Russian court. However, the same was disregarded by the Russian court. Given that the judgement will not be enforceable in the EU due to the Blocking statute, the Russian company has moved the Bombay High Court since the Italian company has assets in India.
So, will the court recognise the judgment passed by the Russian court? Will it reject it on grounds of public policy? Was the Russian court a court of competent jurisdiction in light of the London-seated arbitration agreement between the parties? These are some of the questions that arise.
India’s proposed anti-sanctions regime should continue to reflect the country’s largely neutral stance during these turbulent times. Measures are needed to maintain the country’s position as an investor-friendly jurisdiction. It will be interesting to see whether the proposed anti-sanctions regime bolsters its standing or pushes it into a new era of jurisdictional warfare.
The writer is an advocate, arbitrator and partner, Numen Law Offices
