High Court Ruled Sanctions Did Not Void Contracts
A judge determined that international sanctions suspend payment duties rather than canceling contractual obligations.
Updated on Oct. 5, 2026 in Law
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The High Court in London granted summary judgment against four guarantors involved in vessel-hire claims, ruling that sanctions did not destroy underlying contracts. The court held that payment obligations remain suspended rather than extinguished.
Why it matters
This ruling clarifies that 'hell or highwater' clauses place the risk of performance impossibility on charterers, ensuring contracts survive even when sanctions render payments temporarily illegal or impossible.
The ruling concerns seven 10-year bareboat charters involving $12.9 million in claims against four guarantors and an additional $29.1 million against three others. The court relied on guarantees drafted to cover instances where obligations become illegal or unenforceable.
The players
Lesley Anderson KC
She is a Deputy High Court Judge in London who presided over the summary judgment proceedings.
JSC GTLK
This is a Russian-owned transport leasing company that is currently subject to various international sanctions.
Pola Logistics
This is a Cyprus-incorporated entity that acted as a charterer for the vessels involved in the litigation.
The details
Deputy High Court Judge Lesley Anderson KC determined that the disruption caused by international sanctions did not fundamentally alter the long-term nature of the agreements. Consequently, the court permitted GTLK to proceed with claims for unpaid hire stemming from the terminated charters.
Timeline
2018-2020: Pola Logistics entered into seven bareboat charters.
8 April 2022: The European Union designated JSC GTLK.
1 September 2022: Pola Logistics attempted to terminate the charters.
February 2024: GTLK terminated the charters for unpaid hire.
2 October 2026: Judge Anderson granted summary judgment.
Political Context
Opposing parties may argue that this interpretation places an undue burden on companies trapped between international sanctions and rigid contractual obligations. Critics often contend that such judicial precedents undermine the practical utility of force majeure protections during geopolitical crises.
This decision reinforces that businesses cannot easily exit long-term contracts simply due to the imposition of international sanctions. Companies and investors must prepare for the legal reality that contractual payment duties may persist even when standard trade becomes restricted.
The takeaway
Contractual parties should note that courts may uphold even technically impossible payment obligations if the contract includes robust indemnity clauses. Proactive risk management is essential, as sanctions might pause activity without providing a legal exit from the deal.
Further reading
For broader context on current litigation, visit our Law section.
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