Enforcement of Foreign Arbitral Awards and Court Judgments in Russia

27 June 2014

Julia Romanova

International Partner

E-mail:

jromanova@chadbourne.com

• Russia has proper legislative framework to ensure enforcement of the foreign arbitral awards and foreign court judgments (1958 New York Convention, other international treaties, comity rules)

• Recent court practice re-enforces this possibility: 1. the issue of violation of the public policy was clarified by the RF Supreme Arbitrazh Court

and was significantly narrowed down;

2. the enforcement of foreign court judgments in the absence of international treaty on the principles of international comity gradually expands (e.g. judgments of the courts of Holland, the UK, the USA);

3. the “implied” claims tactics aimed to ban results of the arbitration/ foreign litigation, which was so popular in the past in Russia, was recently found by the RF Supreme Arbitrazh Court as not precluding enforcement of such foreign judicial acts in Russia.

• However, PLEASE MIND:- Specifics of Russian legal culture- Alarming statistics- Future change in the structure of the Russian Supreme Courts - Real examples from the court practice

What should you know about enforcement in Russia?

Satisfaction rate is 80%*, i.e. in practice each 5th application is dismissed

• Some arbitration specialists (e.g. B.R. Karabelnikov) quotes such rate to be 60% (with respect to arbitral awards).

• To compare: satisfaction rate of the applications to set aside domestic arbitral awards is even higher - 24%.

Official Statistics for 2013

Applications for execution writs to enforce domestic arbitration awards

4099

Applications for enforcement of foreign court judgments and foreign arbitral awards

158

• Rejection of Enforcement with reference to the violation of public policy:

- typo in the award was deemed an evidence of violation of the Russian public order (VTB case);

- asserted violation of the agreement (on which the arbitral award was based) to the mandatory requirements of foreign law was deemed “inadmissible from the standpoint of Russian legal thinking” (Alfa Insurance case).

• Rejection of Enforcement with reference to lack of notification of the defendant: evidence of sending of the notice by post service of Latvia was deemed not sufficient (Baltikums Bank AS case).

• Rejection of Enforcement with reference to exclusive competence of Russian courts: whenever transactions concern shares or participation interests in Russian companies (this trend was set in Maximov vs NLMK case in 2011 and continues to exist).

Real Examples

What to do in practice?

Be paranoiac (you can’t be too careful)

Be prepared for a new fight…

and unpleasant surprises

What to do in practice?

Never give up (and convince your client not to)

Julia RomanovaInternational Partner

E-mail:jromanova@chadbourne.com

Chadbourne & Parke LLP Moscow Office52/5 Kosmodamianskaya Nab.Moscow 115054, Russian FederationTel.: +7 (495) 974-2424Fax: +7 (495) 974-2425

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