Trade sanctions and international sales

Trade sanctions are powerful political tools devised to prevent the conclusion
of new commercial contracts and paralyze the performance of pre-existing ones.
Following the imposition of a sanction, a party prohibited from performing its
obligations under a validly concluded contract may resolve to withhold
performance or performance may de facto be prevented by measures of
enforcement of the sanction. If this party therefore fails to perform its
obligations, its contracting partner may decide to initiate legal proceedings.

The author offers solutions to issues faced by arbitral tribunals and domestic
courts when one party raises the existence of a sanction to support its claim
to be freed from its contractual obligations. Critical legal issues such as
the following are thoroughly investigated:

• authority of arbitrators and judges to give effect to statutes serving public
  interests;
  

• reasons to disregard certain sanctions, including some extraterritorial,
  secondary, and tertiary sanctions, and circumstances in which performance may
  be mandatory despite the risk of enforcement measures and/or penalties;
  

• consequences of the delivery of a commercially reasonable substitute;
  

• circumstances in which exemption from liability for non-performance may be
  granted following the imposition or reinforcement of a sanction prohibiting
  performance or subjecting it to a regime of authorization;
  

• right to suspend performance;
  

• remedies available to the aggrieved party, including the right to declare the
  contract totally or partially avoided, to declare a price reduction or to
  collect interest;
  

• threat of penalty for breach of a sanctions program as a valid ground for
  renegotiation or for a court-ordered adaptation of the contract; and
  

• terms under which performance must be resumed once a sanction is lifted,
  sometimes years, perhaps even decades, after it was imposed.
  

For an in-depth examination of the constraints inflicted by trade sanctions −
the likely scenarios and how they play out, as well as available remedies −
this analysis is without peer. It will be of immeasurable value to counsel for
States and for multinationals and to other lawyers working in fields connected
with international trade. Jurists and academics will also find here highly
enlightening perspectives on the long-standing controversy regarding the
characterization of trade sanctions in a private-law context.