General Licence INT/2025/5787748
177. When should arbitrators and/or arbitration associations use the General Licence?
In cases where they are receiving, directing or using funds from, or on behalf of, a designated person (DP) to pay for the costs of an arbitration.
Added on: 23 Dec 2025
178.Under what circumstances does the Arbitration Costs General Licence (GL) apply to non-designated persons (and their representatives)?
A non-designated person (non-DP) may be able to rely on the GL to make certain payments on behalf of a DP that would otherwise be prohibited by the Russia Regulations.
For example:
- A non-DP can pay advance costs or a security deposit on behalf of the DP party (for instance, in circumstances where the DP is required to make an advance payment or security deposit but is unable to make the payment);
- A non-DP’s security deposit can be used at an arbitration’s conclusion to pay arbitrators’ fees on behalf of the DP; or
- Sums awarded to a non-DP in an arbitration can be used to pay for the arbitrator fees on behalf of the DP.
These payments count towards the overall cap per arbitration of £500,000 set out in the GL.
Added on: 23 Dec 2025
179.What payments does the Arbitration Costs General Licence (GL) cover?
The GL enables payment of arbitrators’ and arbitration associations’ fees and expenses in relation to arbitration, up to a maximum of £500,000 per arbitration.
This includes, for example, appointment fees, hearing fees, transcription and other administrative costs, including services provided by third parties in relation to arbitrations.
If costs in an arbitration total £501,000, arbitrators can receive and process £500,000 under the GL. They must then submit a specific licence application to receive the remaining £1,000.
This GL permits the payment and receipt of fees to cover legal advice provided to arbitrators in the course of an arbitration, as an expense, e.g., arbitrators receiving legal advice in relation to an arbitration can receive payment to cover this expense from the parties to the arbitration, under this GL. However, the GL does not cover payment for legal services provided to a party to an arbitration – e.g., a solicitor advising a designated person (DP) in an arbitration cannot receive payment for their legal services under this GL. You should consult the Legal Services GL to see if such payment is payable under that GL, or if a specific licence is required.
The GL also allows arbitrators and arbitration associations to receive security deposits and advance payments using DP funds or paid on behalf of a DP, up to a maximum of £500,000. This is not a separate cap – if an arbitrator or arbitration association receives a £500,000 deposit under the GL, a specific licence will be required to receive any further payment for arbitration costs. However, if costs are subsequently awarded to a party in the arbitration, the arbitrator/arbitration association may use the advance payment or security deposit to pay for those arbitration costs.
The GL does not permit funds being made available to a DP. In the event that funds are awarded to a DP in an arbitration (e.g., costs or damages), these funds cannot be made available to the DP under the GL and would require a specific licence application to be made to OFSI.
If an award is made to a DP which partly requires a party to pay arbitration costs, then the arbitration costs (up to the cap) would be covered by the GL, but any balance would require a specific licence application e.g., if an award of £500,000 is made to a DP of which £200,000 is for arbitration costs, the £200,000 would be covered by the GL, but the £300,000 balance due to the DP would require a specific licence application.
Added on: 23 Dec 2025
180.Do arbitrations outside the UK engage UK sanctions?
An arbitration occurring outside of the UK will only engage UK sanctions if there is a UK nexus. If the arbitration service provider has a UK nexus, e.g., a UK national acting as arbitrator, then this would create a UK nexus and the General Licence will have to be relied upon to make payments for arbitration costs.
Added on: 23 Dec 2025
181.Can arbitrators use surplus payment from one arbitration towards the deposit of another arbitration involving the same designated person (DP)?
Yes. The General Licence does allow the use of funds that have been deposited by a DP in one arbitration to meet the costs of another arbitration that the DP is a party to, provided that the deposited funds are going to be used for arbitration costs and the other terms of the General Licence (including the £500,000 cap per arbitration) are met. See the full licence for definitions and terms.
Added on: 23 Dec 2025
182.Will DP and non-DP payments towards arbitration costs require reporting to OFSI?
Any receipt of payment for arbitration costs from or on behalf of a DP requires reporting to OFSI within 30 days of receipt.
Added on: 23 Dec 2025
183.Which General Licence should legal advisers representing designated persons in arbitrations use to comply with sanctions?
Following the issuance of the Arbitration Costs General Licence INT/2025/5787748, the Legal Services General Licence was amended to make clear that legal advice and/or representation in dispute resolution is included in the definition of “Legal Services”.
Payment for legal advice to and/or representation of parties to an arbitration, and any fees or expenses incurred by legal advisers in the course of providing that legal advice and/or representation, may continue to be received subject to the respective caps in the Legal Services GL.
Added on: 23 Dec 2025
