The High Court is to rule on Thursday on whether the British Government can, from this weekend, make it a crime in the UK to breach international sanctions against Russia. One of Russia's leading oil companies is asking two judges, Lord Justice Beatson and Mr Justice Simon, to block the move until it has had a chance to seek a judicial review.
The Government's aim is to give the backing of the criminal law to Europe-wide sanctions introduced following Russian intervention in the Ukraine. The OJSC Rosneft Oil Company argues that the proposed new laws are "riddled with uncertainty" and they should not be allowed to bite in Britain until their legality can be challenged.
Pushpinder Saini QC, appearing for Rosneft at London's High Court, said: "At this stage there is a strong argument that the principle of legal certainty has been violated, or will be violated." The sanctions prevent companies such as Exxon and Shell from providing services - including drilling, well testing and supplying specialised floating vessels - to Russian oil producers and pipeline operators including Rosneft.
The EU-wide prohibition covers deep water oil exploration and production, arctic oil exploration and production, as well as shale gas projects in Russia. The ban came into effect on September 12 this year. Rosneft argues that any criminal offence must be "clearly described by the law".
The sanctions breaching offence will be punishable by a maximum two years in prison. Rosneft says there is uncertainty over the meaning of the phrase "deep water", and whether the word "arctic" is meant to encompass all oil exploration within the Arctic Circle or simply offshore exploration.
Similarly, the phrase "shale oil project" is unclear as to the specific type of operations that it covers, and whether it means all unconventional oil or gas projects that may involve drilling through shale rock. The British Treasury and the Government contends the Rosneft challenge should be rejected as it would prejudice the UK's ability to meet its obligations under EU law.
It would also "undermine the co-ordinated international effort to make an effective response to Russia's actions in the Ukraine."