The First Large-Scale Esports Expropriation? Russia’s Bid to Nationalise World of Tanks and Its BIT Consequences

This article provides a 360-degree assessment of the prospective expropriation BIT claims: jurisdictional gateways, substantive protections, valuation, Russia’s defences, and enforcement prospects, drawing lessons for studios, investors and tournament organisers across the esports ecosystem.

I. Factual Matrix

On 4 April 2022, in direct response to Russia’s full-scale invasion of Ukraine, Wargaming Group Ltd. announced that it would “cease operations in Russia and Belarus, close its Minsk office and transfer all live services in those territories to Lesta Studio.” The divestment, completed on a cash-free, debt-free basis by 31 March 2022, left Lesta as the stand-alone operator of the Russian-language versions of World of Tanks (rebranded Мир танков) and World of Warships.

Eighteen months later, between 18 October and 1 November 2023, Wargaming ran its largest humanitarian drive to date: the “Wargaming United” in-game bundle campaign. Players in six flagship titles purchased 90 000 Ukraine-themed bundles, enabling the company to remit USD 1 072 940 via the Ukrainian government’s UNITED24 platform to buy C-type ambulances for front-line medics. Although Lesta publicly distanced itself from the fundraiser, Russian authorities would later characterise the initiative as “anti-Russian extremist activity.”

Matters escalated in the spring of 2025. Acting on an ex parte motion from the Prosecutor General, the Tagansky District Court of Moscow on 17 April 2025 ordered the pre-judgment seizure of all shares and the freezing of bank accounts belonging to three core legal entities of the Lesta group: OOO Lesta, OOO Lesta Games Moscow and OOO Lesta Games Agency. The attachment blocked any corporate actions and effectively paralysed the studio’s domestic operations. Lesta acknowledged the freeze the same evening in its official Telegram channel, insisting that it “operates in full compliance with the legislation of the Russian Federation and the Republic of Belarus” and therefore “has nothing to fear.”

Nine days later, on 26 April 2025, the Office of the Prosecutor General filed a civil suit with the same court seeking (i) a permanent ban on what it termed the “association” of Lesta’s owner Malik Khatazhaev and Wargaming founder Viktor Kisly, and (ii) the transfer of 100 per cent of Lesta’s shares to the state treasury. The claim relied on Russia’s Federal Law No 114-FZ “On Combatting Extremist Activity” and was supported by press clippings describing Wargaming’s opposition to the war and its ambulance fundraiser.

International coverage followed swiftly. On 28 April 2025 PC Gamer reported that Russian authorities had already “seized Lesta Group assets” and were pursuing Khatazhaev and Kisly for “extremist activities,” noting that Wargaming, now headquartered in Cyprus, had no remaining assets in Russia or Belarus. The article confirmed that the Prosecutor General’s evidence dossier included references to the 2023 ambulance campaign. Separately, Russian media disclosed that Lesta had filed a private complaint (частная жалоба) challenging the interim measures, arguing that the asset freeze had blocked routine payroll and development expenses. As of 29 April 2025 that appeal remains pending, while the Tagansky court has set an initial merits hearing on the confiscation claim for 20 May 2025.

II. Wargaming’s Corporate structure and nationalities

Wargaming Group Ltd. is a private limited company incorporated under Cypriot law. Its registered address, as shown in the company’s Impressum and corporate filings, is 105 Agion Omologiton Avenue, 1080 Nicosia, Cyprus, where the group moved its global headquarters in 2015 after acquiring and fitting-out the 75-metre “Wargaming Tower”. From that Cypriot base the company holds the intellectual-property rights in World of Tanks, World of Warships and related esports assets, licenses the titles worldwide and employs more than 400 staff in Nicosia alone.

Lesta Games, by contrast, is a Russian developer and publisher headquartered in Saint Petersburg. When Wargaming announced its complete withdrawal from Russia and Belarus in April 2022, it transferred operational control of the RU/CIS versions of World of Tanks (relaunched locally as Мир танков) and World of Warships to Lesta, thereby leaving Lesta as the sole studio lawfully entitled to publish those titles inside Russia. Lesta’s principal legal vehicle, OOO Lesta, is 99 per cent owned by the founder Malik Khatazhaev, with the remaining one per cent held by OOO Lesta Games Agency; both that agency and the Moscow support studio (OOO Lesta Games Moscow) are themselves wholly owned subsidiaries of OOO Lesta.

The ownership chain briefly included an offshore intermediary: between September 2022 and October 2024 Khatazhaev’s 99-per-cent stake in OOO Lesta was assigned to Lesta Hong Kong Limited, a Hong-Kong-incorporated holding vehicle. According to Lesta’s own corporate explanation at the time, the detour through Hong Kong was intended to “facilitate international payments” and “prioritise the Russian market”.

In October 2024 Khatazhaev re-registered the shares in his personal name, but that thirteen-month detour is enough to create a colourable Chinese nationality for investment-treaty purposes because Hong Kong could fall within the territorial scope of the China–Russia BIT.

Taken together, the structure yields three distinct “investors” for treaty analysis: (i) Wargaming Group Ltd., a Cypriot corporate national protected (at least provisionally) by the 1997 Cyprus–Russia BIT; (ii) Lesta Hong Kong Ltd., a Chinese corporation; and (iii) Malik Khatazhaev, a Russian national who, by operation of most BITs, cannot sue his own state. Viktor Kisly himself is a Belarusian individual resident in Cyprus and could attempt to rely on either the Cyprus BIT (as a controlling shareholder) or the soft-law Union-State agreements between Russia and Belarus, but his standing is more complex and lies beyond the scope of this note.

III. Russia’s BIT landscape in 2025

UNCTAD’s International Investment Agreements Navigator lists 63 bilateral investment treaties currently in force for the Russian Federation, out of a total historical stock of seventy-nine. Among the instruments are

(i) the Cyprus-Russia Agreement on the Promotion and Mutual Protection of Investments, signed on 11 April 1997 pending ratification, and

(ii) the China-Russia BIT, signed on 9 November 2006 and in force since 1 May 2009.

Both texts adopt the classic post-Soviet template: they define “investment” to include shares and any other form of participation in a company; they oblige each state to accord investments fair and equitable treatment, full protection and security, most-favoured-nation and national treatment; they prohibit expropriation or nationalisation except for a public purpose, under due process of law, on a non-discriminatory basis and against prompt, adequate and effective compensation; and they guarantee the free transfer of returns in a freely convertible currency.

Although the Kremlin has shown an increasing willingness to weaponise international agreements: most visibly when President Putin suspended Russia’s double-tax treaties with so-called “unfriendly” states in August 2023. No comparable act has yet targeted its BIT network, and neither the Cyprus nor China BIT appears on the government’s abrogation list.

In sum, the treaty landscape confirms that a Cypriot corporate investor (Wargaming) and, arguably, a Chinese/Hong-Kong investor (Lesta Hong Kong Ltd.) could enjoy standing to bring claims for expropriation, unfair treatment and restrictions on capital transfers arising from the attempted confiscation of Lesta’s shares. Those claims would proceed before an international tribunal seated outside Russia and would be insulated, for a decade or more, from any future Russian denunciation of the underlying treaties.

IV. Jurisdictional Pathways – investor status, qualifying investments and temporal reach

The effectiveness of any arbitration strategy depends on three preliminary hurdles: ratione personae (is the claimant an “investor”?), ratione materiae (is the disputed asset an “investment”?) and ratione temporis (was the treaty in force, and did protection attach, when the impugned measures occurred?). The Russian Federation may also plead that the October-2022–October-2024 detour of the Lesta shareholding through Hong Kong was abusive “forum shopping.” Each point is addressed in turn.

1. Are the Cyprus–Russia BIT and the China-Russia BIT Applicable

The Cyprus-Russia BIT was signed on 11 April 1997 but never entered into force: Russia never deposited its instrument of ratification, and the treaty contains no provisional-application clause to bridge that gap. Under Article 18 of the Vienna Convention on the Law of Treaties (VCLT), signature alone imposes only an obligation not to defeat the object and purpose of a treaty, not to create full substantive or dispute-settlement rights. Consequently, the Cyprus BIT’s consent to arbitrate and its investment-protection guarantees have no binding effect.

By contrast, the China-Russia BIT of 9 November 2006 was ratified by both sides and entered into force on 1 May 2009. However, the §1 of the Protocol to the China-Russia BIT states: “Unless otherwise agreed by both Contracting Parties, the Agreement does not apply to the Hong Kong Special Administrative Region of the People’s Republic of China…”, an explicit carve-out reflecting the “One Country, Two Systems” framework.

That clause sits in the very heart of the treaty’s applicability and its territorial scope, and under the VCLT a treaty must be interpreted in good faith in accordance with its text, context and object and purpose (Art. 31 VCLT).

Most other Chinese BITs contain no such exclusion, and under ordinary rules of treaty interpretation those instruments bind China’s entire territory, including the SARs, absent a clear, contrary intention. The VCLT also confirms that “a treaty is binding upon each party in respect of its entire territory” unless the treaty itself indicates otherwise (Art. 29 VCLT), and that internal law cannot justify non-performance of a treaty (Art. 27). Hong Kong’s Basic Law likewise provides in Article 153 that the Central People’s Government “shall decide” on the application of treaties to the SAR only “after seeking the views of the government of the Region,” meaning that, without a specific notification from Beijing, most Chinese BITs automatically extend to Hong Kong.

This principle was tested in Tza Yap Shum v. Peru (ICSID ARB/07/6), where the tribunal held that a Hong Kong–incorporated individual satisfied the definition of “investor” under the China-Peru BIT, because that treaty contained no SAR-specific language, because there was no express exclusion from its personal scope. Chinese scholars criticized that decision as insufficiently deferential to Beijing’s policy, but tribunals have been reluctant to imply an exclusion where none appears on the face of the treaty.

A parallel outcome emerged in Sanum Investments Ltd. v. Lao PDR (Lao Holdings N.V. v. Lao People’s Democratic Republic, ICSID Case No. ARB(AF)/12/6, and Sanum Investments Limited v. Lao People’s Democratic Republic, UNCITRAL, PCA Case No. 2013-13), which concerned a Macanese investor under the 1993 China-Laos BIT. There, the tribunal accepted jurisdiction because of the absence of an express Macao carve-out, holding that the treaty’s broad “territorial application” clause and the absence of any exclusionary protocol meant that Macao, not just mainland China, fell within its ambit.

It could be argued that by means of the most-favoured-nation (MFN) provision in Article 3(2) of the same BIT, where Russia and China undertake to accord to investors of the other Party “treatment no less favourable” than that granted to investors of any third state, the territorial scope and thus the jurisdiction of the arbitral tribunal could be extended to investors from Hong Kong.

MFN clauses are, however, designed to prevent discriminatory substantive or procedural treatment of covered investors, but they are not drafting tools to rewrite a treaty’s personal-scope definition. In other words, an MFN clause cannot “import” a non-covered class of investor into the treaty if the parties have already excluded that class by a clear, lex-specialis carve-out in §1 of the Protocol to the China-Russia BIT.

This distinction between scope-defining provisions and treatment obligations has been confirmed by multiple tribunals. In Plama Consortium v. Bulgaria (ICSID ARB/03/24) the tribunal held that a general MFN clause does not extend an arbitration clause to investors who fall outside the original definition of “investor,” absent “textual clarity” demonstrating that the parties intended to do so.

The Plama tribunal emphasised that scope and MFN provisions operate at different levels: scope provisions set the universe of covered parties, while MFN provisions regulate how those parties must be treated.

Applying these principles to the China-Russia BIT, there is therefore no legal basis to invoke the MFN clause so as to override the §1 of the Protocol to the China-Russia BIT carve-out for Hong Kong SAR investors. Only a bilateral side-letter or formal joint declaration by Beijing and Moscow could lift that exclusion; no mere invocation of MFN can substitute for the “otherwise agreed” language the treaty itself requires.

Given that neither the China-Russia BIT (with its explicit SAR exclusion) nor the Cyprus-Russia BIT (which never entered into force) affords Treaty protection to the existing corporate vehicles, any discussion of Wargaming or Lesta Hong Kong’s standing under those instruments must remain purely hypothetical. Nonetheless, it is instructive to consider, for completeness, how the BITs would treat these entities as “investors” if their provisions did in fact apply.

2. Are Wargaming and Lesta Hong Kong “investors” under the two BITs?

Were the Cyprus-Russia BIT operative, it employs the same incorporation-plus-seat test for corporate claimants. Thus, Wargaming Group Ltd., incorporated in Cyprus, would clearly qualify as an “investor” under either treaty, if the Cyprus instrument had ever entered into force.

Conversely, Lesta Hong Kong Ltd., though indisputably constituted under Hong Kong law, would fall outside the China-Russia BIT’s personal scope by virtue of the Protocol’s unambiguous carve-out: “Unless otherwise agreed by both Contracting Parties, the Agreement does not apply to the Hong Kong Special Administrative Region … and the Macao Special Administrative Region.”

No public record suggests that Beijing and Moscow ever issued the required joint declaration to lift that exclusion, and nothing in the treaties or the VCLT permits an MFN clause to override a lex specialis scope exclusion. Had a tribunal nevertheless found Hong Kong covered, it would have to disregard the clear text of the Protocol, a step no arbitral precedent has sanctioned.

3. Do shares, IP licences and revenue-sharing entitlements qualify as “investments”?

Article 1(1)(b) of the China-Russia BIT and the mirror text of the Cyprus-Russia BIT list “shares, stocks and any other kind of participation in the capital of commercial organisations” as protected investments. The China-Russia BIT also singles out intellectual-property rights (Art. 1(1)(d)) and “claims to money … having an economic value” (Art. 1(1)(c)). Accordingly:

• the equity of OOO Lesta and its subsidiaries is a classic investment;
• Wargaming’s perpetual IP licence to Lesta for the RU/CIS versions of World of Tanks and World of Warships is an “intellectual-property right” and hence an investment in its own right; and
• any post-divestment royalty stream, revenue-sharing agreement or outstanding loan qualifies as a “claim to money.”

Tribunals have long accepted that a single factual matrix can give rise to multiple parallel investments (see RosInvestCo and Yukos), so Wargaming may advance claims in respect of each asset category.

4. Ratione temporis: were the treaties operative when the alleged breaches occurred?

China–Russia BIT: Article 11(1) extends protection retroactively to “investments made … beginning from 1 January 1985,” while simultaneously excluding disputes that arose before the treaty’s entry into force on 1 May 2009. All measures in question, i.e. the April-2025 asset freeze and the April-2025 confiscation suit, post-date entry into force, so the temporal test would be satisfied for any Chinese-qualifying investor.

Cyprus–Russia BIT: The Cyprus–Russia BIT never entered into force, and contains no provisional-application or signature-binding clause. Under Article 18 VCLT, signature obliges a State only to refrain from acts defeating the object and purpose of a treaty—not to extend substantive protections or dispute-settlement consent before ratification. In the absence of entry into force, there is no temporal reach to consider: the Cyprus instrument simply never acquired binding effect on either party.

5. Is “forum shopping” a plausible defence against the Hong Kong interlude?

Russia is likely to argue that the September-2022 transfer of Lesta’s 99 percent shareholding to Russia might contend that the September 2022 re-domiciliation of Lesta’s 99 percent shareholding to Hong Kong was a calculated effort to migrate the investment into treaty protection once sanctions became foreseeable. Arbitral jurisprudence requires proof that a restructuring occurred not only when a dispute was highly probable but also with the dominant purpose of obtaining a treaty forum (see Pac Rim v. El Salvador and Philip Morris v. Australia).

Here, the move was publicly explained as a payments-processing optimization, it was unwound in October 2024, months before any asset-freeze action, and, in any event, the China-Russia BIT’s SAR-exclusion Protocol renders any Hong Kong investment prima facie outside the treaty’s scope. Even if a tribunal were to reject the Protocol’s carve-out, it would have to find that the restructuring was genuinely driven by concerns unrelated to treaty shopping, a conclusion strongly supported by the commercial rationale and the timing of the reversal.

In sum, because the Cyprus–Russia BIT never came into force and the China–Russia BIT explicitly excludes Hong Kong entities absent bilateral waiver, neither Wargaming Group Ltd. nor Lesta Hong Kong Ltd. enjoys clear treaty standing. Any claim under these instruments therefore remains purely hypothetical.

V. Substantive treaty claims

1. Direct expropriation

Article 4 of the Cyprus-Russia BIT and Article 4(1) of the China-Russia BIT each forbid “nationalisation or expropriation” of an investment except where four cumulative conditions are met: (i) the measure pursues a public purpose; (ii) it is adopted under due process of law; (iii) it is taken on a non-discriminatory basis; and (iv) it is accompanied by “prompt, adequate and effective” compensation equal to the investment’s value immediately before the taking.

The Prosecutor General’s pending claim would divest Lesta’s shareholders of one-hundred per cent of their equity and vest it in the Russian treasury, while the April-2025 attachment order has already frozen all voting and economic rights. No offer of compensation, let alone payment of the “real value” required by Article 4 Cyprus-Russia BIT or the “genuine value” required by Article 4(2) China-Russia BIT, has been made. Moscow is expected to argue that the confiscation is a criminal-law sanction for “extremism” and therefore falls within the state’s police powers.

Yet international tribunals treat police-powers defences as an affirmative justification that must be proportionate, non-punitive and genuinely directed to public order. In awards such as RosInvestCo v Russia and Yukos v Russia tribunals rejected similar invocations of criminal or tax law where the true objective was punishment or asset seizure. The proposed transfer here, triggered by a humanitarian ambulance fundraiser, is unlikely to survive that proportionality scrutiny.

2. Fair and equitable treatment (FET)

Under Article 3(1) Cyprus-Russia BIT and Article 3(1) China-Russia BIT each contracting state “shall at all times accord” investments fair and equitable treatment and full protection and security. Since early 2022 Russia has required investors from its official “Unfriendly Countries List” to obtain special-commission clearance to sell equity, to grant buyers a compulsory 50 per cent price discount, and to pay an “exit contribution” or выходной взнос of at least ten per cent of sale value to the federal budget, measures confirmed by the Ministry of Finance and reported widely in 2023-24. In addition, Central-Bank decrees force rouble conversion of most hard-currency revenues and impose veto rights over share transfers.

These rules apply almost exclusively to investors whose home states have condemned the invasion of Ukraine and therefore single out Cypriot owners such as Wargaming, while Russian-owned studios continue to buy and sell shares freely. Layering a confiscation on top of those differential restrictions transforms a regulatory regime into a bad-faith campaign that violates FET’s core guarantees of transparency, stability and non-discrimination. The allegation that donating to medical aid for civilians constitutes “extremism” only reinforces the bad-faith character of the measure and recalls the punitive intent tribunals condemned in Quasar de Valores v Russia and Veteran Petroleum v Russia.

3. National treatment and most-favoured-nation treatment

Article 3(2) of the Cyprus BIT obliges Russia to treat Cypriot investments “no less favourably” than it treats investments of its own nationals with respect to the management, operation and disposition of investments; Article 5 of the China BIT echoes that standard and adds an MFN clause. If the Tagansky court awards the Prosecutor General the Lesta shares while leaving domestically owned publishers untouched, Russia will have accorded clearly less-favourable treatment to foreign investors.

MFN treatment opens an additional avenue: Wargaming could import the more generous umbrella clause contained in Article 2 of the France-Russia BIT or the broad dispute-resolution consent of the Germany-Russia BIT, thereby widening the range of substantive and procedural protections available. Tribunals from Maffezini v Spain (ICSID Case No. ARB/97/7) onwards have accepted such MFN importation, provided the imported clause is not expressly excluded, and neither treaty in issue contains an MFN carve-out for dispute settlement.

4. Free transfer of returns

Article 6(1) Cyprus-Russia BIT and Article 6 China-Russia BIT oblige Russia to “guarantee to investors of the other Contracting Party the free transfer of payments” relating to an investment “in a freely convertible currency at the market rate of exchange on the date of transfer.” The 17 April 2025 attachment order froze all Lesta bank accounts; as a result, dividends and inter-company service fees owed to Wargaming cannot be paid.

In Total v Argentina and Mobil v Venezuela tribunals found even temporary exchange-control measures to breach comparable clauses absent acute balance-of-payments necessity. Russia’s measure is indefinite, targets only one firm and is grounded in an extremism allegation rather than macro-economic need, so it is almost certain to be condemned as an autonomous treaty violation.

V. Quantum and valuation methodology

Both BITs adopt the classical Hull formula: “prompt, adequate and effective compensation.” Article 4 Cyprus-Russia BIT stipulates that compensation “shall amount to the real value of the investment immediately before the expropriation became known,” while Article 4(2) China BIT uses the synonymous term “market value.”

In practice tribunals favour a discounted-cash-flow (DCF) approach when the expropriated enterprise is a going concern with reliable historical earnings. Lesta Games Agency, the revenue-generating arm of the group, reported RUB 24.8 billion (≈ USD 268 million) in turnover and RUB 6.4 billion in net profit for 2024, reflecting a 29.4 per cent year-on-year sales expansion.

A DCF model would project that cash flow over the licence horizon of World of Tanks, adjust for capital expenditure on new content, and discount at a cost of capital that incorporates Russia-specific sovereign-risk and sanctions premia; tribunals have recently applied post-invasion Russia equity risk premia in the 13-15 per cent range.

Where reliable forward projections are contested, arbitrators turn to comparable-company multiples. Recent acquisitions of free-to-play studios, such as Microsoft’s 2023 purchase of Activision-Blizzard at an enterprise value/EBITDA multiple of 20×. offer benchmarks. Even applying a Russia haircut of 70 per cent, Lesta’s 2024 EBITDA of roughly RUB 8.5 billion would still yield a head-line enterprise value above USD 500 million. Both treaties entitle claimants to interest “until the date of payment” at an interest rate “corresponding to the interest rate of the Contracting Party in the territory of which the investment was made” (Cyprus-Russia BIT, Art. 4) or a “LIBOR rate for six months US dollar credits” formulation (China-Russia BIT, Art. 4(2)).

Tribunals frequently select six-month USD LIBOR/SOFR plus two per cent, compounded annually, producing substantial post-award accrual if enforcement drags on, as the Yukos creditors, now owed in excess of USD 60 billion with interest, can attest. In short, whichever valuation method the tribunal favours, the confiscation of Lesta’s shares would expose the Russian Federation to a compensation claim comfortably in the high nine-figure, and possibly low ten-figure, US-dollar range, before interest.

VI. Enforcement Prospects

Despite the formidable size of any award that Wargaming or a holding might obtain, the post-Yukos and post-Crimea jurisprudence makes clear that sovereign recalcitrance is seldom the final word. Russia acceded to the New York Convention on 27 October 1960 and, as such, is bound to recognise and enforce foreign arbitral awards rendered under the Convention’s terms in any of the 173 Contracting States, provided the claimant can satisfied the documentary requirements of Article IV and overcome the narrow public-policy defences of Article V.

Although Moscow has amended its Constitution (2020) to proclaim the primacy of domestic law over international obligations, domestic courts have consistently held that treaty-based awards against Russia must be recognised unless one of those narrow exceptions applies.

The Yukos saga illustrates how sustained enforcement can succeed even when a state refuses to pay. After an UNCITRAL tribunal awarded former Yukos shareholders over USD 50 billion in 2014, Russia spent a decade resisting enforcement, but national courts in the Netherlands, the United Kingdom, France and elsewhere have systematically lifted Russia’s sovereign-immunity and forum-non-conveniens objections.

In February 2024 the Dutch Court of Appeal refused to set aside the award, clearing the way for seizure of Russian state-owned vodka trademarks, real estate holdings and bank accounts in the Benelux under the New York Convention. In London, the High Court has ruled repeatedly that Russia “cannot claim state immunity” to resist enforcement of the USD 60 billion award, permitting attachment of Russian state assets in the UK. Meanwhile, former shareholders have auctioned seized vodka brand names and are actively pursuing frozen bank deposits in Switzerland and Luxembourg.

In parallel, Crimean claimants have pursued and enforced multiple awards for Russia’s expropriation of Ukrainian assets following the 2014 annexation. In April 2025 a French court refused to dismiss enforcement proceedings by a Ukrainian bank seeking to recover USD 267 million, thereby permitting discovery of Russian-owned property across multiple states.

A second Ukrainian claimant has already seized approximately EUR 87 million worth of Russian property in France to satisfy its USD 1.1 billion award, and Naftogaz has placed mortgages on over EUR 20 million of Russian-state assets in Paris pending enforcement of its USD 5 billion award. In Finland, courts have ordered the confiscation of USD 4.25 billion in Russian assets to satisfy the same Naftogaz arbitral decision.

Even in jurisdictions where Russia has mounted fierce challenges, tribunals and appellate courts have upheld jurisdiction and refused to reopen the merits, as reflected in the Dutch Supreme Court’s December 2024 decision dismissing Russia’s appeals in three separate Crimea cases. In short, while execution within Russia remains impossible as a practical matter, a combination of treaty-based recognition under the New York Convention and tenacious enforcement in creditor-friendly jurisdictions has turned large awards into genuine recoveries. Claimants can therefore proceed with confidence that a favourable arbitral award is likely to produce real-world remedies somewhere in the global financial system.

VII. Industry-Wide Implications

The seizure of Lesta’s shares underscores that investment-treaty structuring has become as indispensable to esports and live-service gaming as trademark and sponsorship due diligence. Companies eyeing high-growth but volatile markets must now hold key intellectual-property rights and revenue streams through vehicles incorporated in jurisdictions whose bilateral investment treaties remain robust, even when host-state risk spikes. Today, structuring through jurisdictions such as Singapore, the United Arab Emirates or Switzerland, each with broad treaty networks and demonstrated willingness to arbitrate, can be the difference between meaningful recourse and political impasse.

Political-risk insurance (PRI), once reserved for mining, energy and infrastructure, must now encompass intangible-asset risk. Underwriters are increasingly calibrating premiums not only to physical-asset seizure but to the expropriation of revenue streams, digital-goods inventories and player-account databases. Gaming companies should engage PRI carriers early to secure coverage tied to treaty-based arbitration triggers, ensuring that any compensation award is fronted by an insurer in the event of host-state non-payment.

Content-policy due diligence has also moved to the forefront. The Russian Prosecutor General’s characterization of the 2023 ambulance fundraiser as “extremist” demonstrates how charitable campaigns, in-game symbolism or tournament partnerships can become lightning rods for regulatory or criminal action. Esports organisers and publishers must now map local laws on political-speech restrictions, extremism statutes and sanctions, incorporating legal reviews into community-engagement strategies and in-game event planning.

Finally, exit-tax and forced-sale regimes are an emerging risk in “unfriendly” jurisdictions. Since 2022 Moscow has mandated an exit contribution of at least 10 per cent of sale proceeds and forced discounts of 50 per cent on asset disposals by investors from certain states, while banning any buy-back options. These measures leave departing investors with stripped-down valuations unless they negotiate pre-agreed offshore arbitration clauses and buy-back triggers in joint-venture and licence agreements. Enterprise-value modelling today must include scenario analyses for hostile-state exit levies, sanction-driven revenue interruptions and “no-recourse” exit floors.

VIII. Conclusion

SShould the Tagansky District Court grant the Prosecutor General’s petition, Russia would effectuate the first ever complete state confiscation of a live-service, multiplayer title, an unprecedented escalation in the interactive-entertainment sector. Yet the very instruments on which Wargaming and its affiliates might rely: the 1997 Cyprus-Russia BIT and the 2006 China-Russia BIT offer no legal remedies. The former never entered into force, and the latter expressly excludes Hong Kong companies unless Beijing and Moscow jointly agree otherwise. In practical terms, neither corporate vehicle possesses an unassailable treaty right to challenge the pending expropriation.

This lacuna in treaty protection carries profound lessons for the esports and interactive-entertainment industries. No longer can counsel regard investment-treaty planning as a peripheral luxury; it must be woven into the very fabric of corporate structuring, licensing arrangements and market-entry strategies. A façade of treaty consent means little if it can be nullified by domestic ratification gaps or express carve-outs. Instead, everyday deal-makers must think like sovereign-risk specialists, i.e. selecting jurisdictions with fully ratified, scope-clear investment treaties, securing provisional-application or sunset provisions, and embedding robust dispute-resolution and exit-mechanisms in joint-venture and licence contracts.

The Lesta affair thus stands as both cautionary tale and call to action. As one tribunal memorably observed in the Yukos litigation, “a State cannot invite foreign capital and then invoke sovereign immunity to evade its commitments.” In an era when digital communities and virtual economies find themselves caught in geopolitical crossfire, the new playbook must marry classical IP and compliance diligence with foresight in treaty design, insurance layering and enforcement strategy. Only then can investors hope to protect their innovations from the shifting winds of international politics.