Foreign Judgments in Russia
By Aram Grigoryan, Nektorov, Saveliev & Partners
One of the most global events in the field of international justice was the adoption by the Hague Conference on Private International Law of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters 2019. It is assumed that the Convention will increase certainty and predictability and promote the better management of transaction and litigation risks.
In this regard, issues of recognition and enforcement (“R&E”) of foreign judgments (“FJ”) at the national level are of interest to foreign investors and business. Nowadays, an FJ generally can be recognised and enforced in Russia if a bilateral or multilateral international agreement exists. Russia is a party of numerous (more than 30) treaties that govern the R&E issues entered by Russia and the USSR.
It is more diffcult to recognise and enforce an FJ if it was rendered in a country which does not have a relevant treaty with Russia: in these cases, Russian courts may review a case on the principles of reciprocity and international comity (see leading case Re MCBL (UK) vs STC “Microsurgery of eye named S. Fyodorov” (Russia)). After that case, Russian courts have turned to wide application of this approach concerning English, Dutch, Finnish, and Japanese judgments. Whether the reciprocity rule must be applied or not, generally, it is done on a case-by-case basis. The main evidence for this question is the legal opinions of foreign law professors.
Under Russian procedural law, only final judgment on merits can be recognised and enforced. It means that orders for interim injunctions cannot be R&E’d. Therefore, a party which seeks to obtain injunctions in Russia must ask for these directly from a Russian court. Also, it is not clear whether decisions that approve settlement agreements are subject to R&E.
The general grounds for a refusal of R&E in Russia are violation of exclusive jurisdiction of Russian courts, improper notification, and, the most controversial, a violation of public policy. It is common for lower courts to refuse R&E and then higher courts to overrule the decision and direct the case for reexamination (see the most recent case: “YKK Shipping Ltd.”(Cyprus) vs “Caspian-SK” LLC (2019)).
Despite the above risks, in general, Russian courts in most R&E disputes make positive decisions (about 65% of the applications were satisfied based on the results of 2018). That is why we can conclude that Russia is an R&E-friendly country.
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Nektorov, Saveliev & Partners
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Nektorov, Saveliev & Partners is a law firm established in 2006 in Moscow, Russia, and focused on providing comprehensive legal solutions to corporate and private clients under Russian and English law. Their main practice areas are tax, corporate and M&A, arbitration and litigation, banking and finance, investments, and real estate. They provide legal support to clients in Russia, CIS countries (Belarus, Kazakhstan, Ukraine), and worldwide.
Aram Grigoryan specialises in contractual dispute resolution in international trade. He obtained an LLM in dispute resolution from Lomonosov Moscow State University.
Published: Litigation & Dispute Resolution Newsletter, No. 11, Autumn 2019 l Photo: Yury Gubin - stock.adobe.com