Luxembourg’s decision to secure the removal of Russian billionaire Mikhail Fridman from the EU’s sanctions list has left the country exposed to a €13.8 billion arbitration claim—one that could dwarf its national budget. Fridman, co-founder of Alfa Group, filed the claim in August 2024 under a 1989 investment protection treaty between the Belgium-Luxembourg Economic Union and the Soviet Union, seeking compensation for the freezing of his assets in Luxembourg and damage to his business.
The claim, now before an arbitration tribunal, remains unresolved despite Fridman’s delisting from the sanctions list on 22 September 2026. Luxembourg Prime Minister Luc Frieden has acknowledged in private that the move was driven by the ‘national interest’—specifically to mitigate the financial risk of the arbitration. However, opposition lawmakers, including Sam Tanson of the Greens and Franz Fayot of the Socialists, have criticised the strategy as ‘opportunistic’ and potentially weakening the EU’s sanctions regime.
Fridman’s legal team has indicated he is ‘assessing his legal strategy,’ but no withdrawal of the claim has been confirmed. The arbitration, which could set a precedent for other sanctioned individuals, is being closely watched by Luxembourg’s political opposition, who argue that the government failed to establish whether delisting would actually resolve the financial threat. Meanwhile, Ukraine’s foreign minister has condemned the decision as sending the ‘wrong signal’ to both Russia and Kyiv.
The case is the first and only arbitration claim against Luxembourg in the UN’s database of investor-state disputes, underscoring its potential scale and significance for the Grand Duchy’s financial stability.
