A sanctioned Russian-Israeli billionaire is suing the British government in a high-stakes international arbitration case, challenging measures imposed on him after Russia’s full-scale invasion of Ukraine. Mikhail Fridman, co-founder of Alfa-Bank and one of Russia’s wealthiest businessmen with an estimated net worth of $15 billion, has filed a claim under investor-state dispute settlement (ISDS) rules — a mechanism that allows foreign investors to sue governments over actions that affect their overseas interests. The development was confirmed in parliament by Chris Bryant, the UK trade policy minister, as reported by The Times UK.
The details of Fridman’s claim remain undisclosed, but the sanctions imposed on him in 2022 form the core of the dispute. Britain targeted him because of his investments in Alfa-Bank, Russia’s largest non-state financial institution. Although UK Treasury officials initially asserted that Fridman had close ties to President Putin, those claims were later withdrawn, yet the sanctions regime remained intact.
ISDS mechanisms, typically exercised through international arbitration tribunals, allow investors to bypass domestic courts and seek compensation directly from states. The system has long faced criticism from transparency and anti-corruption campaigners, who argue that it undermines democracy, weakens national sovereignty and creates parallel legal pathways favouring elite investors.
Fridman is simultaneously pursuing an ISDS case against Luxembourg after his assets were frozen under EU sanctions. Last year, he filed a $16 billion claim against the country, arguing that the measures were imposed without due process. He has already succeeded in challenging his listing at the European level: he was removed from the EU sanctions list after suing the bloc, which had initially designated him as “a top Russian financier and enabler of Putin’s inner circle.” Following the ruling, he said he was “satisfied” with the decision.
Critics say the latest case against the UK highlights the risks posed by corporate arbitration courts. Cleodie Rickard, trade campaign manager at Global Justice Now, warned that ISDS provisions give powerful businessmen leverage over national policy at a moment when the UK is trying to support Ukraine amid Russia’s illegal war. She argued that Britain should follow other countries in stripping ISDS clauses from trade agreements, calling it “an outrage” that individuals with ties to the Kremlin can challenge UK sanctions through international tribunals.
Fridman was contacted for comment regarding his legal action.
