Mikhail Fridman vs. the Netherlands: Arbitration Worth Hundreds of Millions

Mikhail Fridman has initiated arbitration against the Netherlands, accusing the country of expropriating his investments. The claim concerns the protection of capital investments under the 1989 Soviet-Dutch agreement, and the amount is estimated at hundreds of millions of euros.

The essence of the businessman's claims against the Netherlands is related to the bankruptcy of Amsterdam Trade Bank, which he acquired through his structures in 2001. After sanctions were imposed in 2022, the bank found itself in a difficult situation and was declared insolvent, despite a high capital adequacy ratio of over 22%. Fridman claims that the bank was solvent and stable, and its bankruptcy was a direct consequence of economic restrictions.

An additional argument for the plaintiff is the 2024 ruling of the EU Court of Justice. The court then recognized that the EU Council had not justified the reasons for imposing sanctions against Fridman, although the restrictions were later maintained on new grounds. The businessman considers this evidence of an arbitrary approach to sanctions.

The arbitration proceedings are taking place in Dubai, at the International Financial Centre. The parties have agreed on rules that allow the use of artificial intelligence for auxiliary tasks—legal research, translation, and citation verification. However, it is prohibited to upload confidential case materials into open AI systems without data protection.

This process has become Fridman's third arbitration dispute against European states. Previously, he litigated with Luxembourg and the United Kingdom, trying to challenge the freezing of assets and other consequences of sanctions. In the new case, key issues will be the interpretation of sanctions as illegal expropriation and the Netherlands' responsibility for decisions made at the EU level.

Lawyers assess the parties' chances ambiguously. The investment protection agreement does indeed provide protection against expropriation, but the interpretation of sanctions as a form of expropriation remains debatable. If Fridman can prove that the actions of the Netherlands led to the loss of his capital, this would set an important precedent for other investors affected by sanctions.