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ARTICLE · 24 APRIL 2026

Sanctions Trump Contracts: Canadian Court Interprets “Control” Under Russian Sanctions

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The Alberta Court of King’s Bench has released a landmark decision providing the most comprehensive judicial interpretation to date of the “deemed ownership” and control provisions under the Special Economic Measures Act (SEMA). In RN Cardium Oil Inc. v. Loyal Energy (Canada) Operating Ltd, the Court summarily dismissed a $6 million contractual claim after concluding that payment would contravene Canadian sanctions.

CanadaInternational Law
Brenda C. Swick
Brenda C. Swick
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The Alberta Court of King’s Bench has released a landmark decision providing the most comprehensive judicial interpretation to date of the “deemed ownership” and control provisions under the Special Economic Measures Act (SEMA). In RN Cardium Oil Inc. v. Loyal Energy (Canada) Operating Ltd, the Court summarily dismissed a $6 million contractual claim after concluding that payment would contravene Canadian sanctions.

This decision is significant for Canadian companies because it confirms that sanctions compliance can override contractual rights and payment obligations, even where a counterparty is not expressly listed under Canada’s sanctions regulations.

Background

RN Cardium Oil Inc. (Cardium) is a British Columbia–based company and a wholly owned subsidiary of PJSC Rosneft Oil Company (Rosneft), a major Russian energy company. Cardium and Loyal Energy (Canada) Operating Ltd (Loyal) were parties to a joint venture development agreement (JVDA) for the production and sale of

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