Power Machines, a Russian engineering firm controlled by businessman Alexei Mordashov and subject to U.S. sanctions since 2018, achieved a favorable outcome in a dispute with Vietnam’s state-owned energy group PetroVietnam at the Singapore International Arbitration Center (SIAC). This update comes from RBC, which cited both the company and its sources for the development.
The report marks what is described as the first publicly disclosed arbitration victory by a sanctioned Russian player in recent memory, set against a backdrop of intensified sanctions following the Ukraine conflict. The case stands out in a landscape where sanctions have often hindered Russian companies from pursuing international claims under conventional commercial arbitration procedures.
In 2019, Power Machines filed a request for compensation with SIAC over funds invested in the Long Phu 1 thermal power plant project in Vietnam. The project faced a halt due to U.S. sanctions affecting the Russian parent company. After attempts at government-to-government negotiation, prompted by a request from the Russian Ministry of Economic Development, the parties advanced the matter to formal arbitration because a satisfactory settlement could not be reached.
According to RBC sources, the claimant sought more than $500 million, representing the project’s costs up to the termination date of the contract. PetroVietnam counterclaimed for roughly $3.5 billion in damages, but the arbitration panel rejected that demand and ruled in favor of Power Machines. The decision, issued in November 2023, was described by a company representative as a confidential award, with details not disclosed publicly at that time.
The ruling highlights the frictions that arise when geopolitical measures intersect with international commercial disputes. While sanctions have limited many cross-border activities for Russian entities, arbitration tribunals can still address legitimate compensation claims arising from halted projects, where contract terms and investment obligations are evaluated under the applicable law and arbitration rules. The outcome also underscores how neutral, respected arbitration forums like SIAC function as venues for resolving disputes even within broader sanctions regimes.
Observers note that sanctions policy continues to shape business risk and contract design across industries, including energy infrastructure. The Power Machines case illustrates how corporate diplomacy, regulatory constraints, and legal avenues interact in today’s global investment landscape, where governments, financiers, and contractors must navigate shifting sanctions environments while pursuing remedies through arbitration when projects stall or terminate unexpectedly.
Analysts will monitor how sanctioned entities handle similar disputes in the future, especially those involving large, state-backed energy ventures in regions with volatility. The SIAC decision demonstrates that arbitration remains a viable channel for obtaining redress when projects are interrupted by external measures, even as the broader sanctions framework continues to evolve and adapt.