With the continuing exit and suspension of operation of foreign entities in Russia, Russian State authorities are exploring retaliatory measures, including a regime for the nationalisation and forced sale of foreign assets.

It is a sovereign right of any State to seek to promulgate laws and introduce measures that would lead to the nationalisation, seizure or forced sale of privately owned assets. However, international law recognises such actions as expropriations and requires fair market value compensation by the State. Should Russia implement the proposed regime or similar expropriatory measures, foreign entities may have recourse against Russia for fair market value compensation. Such recourse under international law is commonly pursued under an investment treaty between the State of the foreign entity and the expropriating State (in this case, Russia) (a bilateral investment treaty, “BIT”). Most of these BITs provide for an investor-State dispute settlement mechanism commonly referred to as investment treaty arbitration.