This paper theorizes development of MNE-NGO-state conflicts in state-capitalist contexts. We draw on longitudinal data from the Arctic oil drilling dispute between environmental NGOs headed by Greenpeace, and Gazprom, the Russian energy giant. We propose a theory that introduces two concepts: shadow-boxing and homeostasis. In shadow-boxing, escalation of visible action by NGOs is met with a seemingly separate but concerted response by the MNE and state bodies. In homeostasis, the contested corporate activity continues undisturbed after the escalated conflict. Beyond state capitalism, these concepts have explanatory power in settings where the corporations and the state are intertwined in various ways.