The enforcement of foreign judgments and arbitral awards in Russia

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By Tatiana Minaeva

There is no doubt that the last decade will come into history as a period when London became a legal battleground for big business disputes emerging from Russia and other countries of the former USSR. As these countries’ economies globalised, post-Soviet businessmen preferred to take their fights to foreign courtrooms and arbitral tribunals due to a lack of trust in their native judicial systems. London’s High Court and the International Dispute Resolution Centre (IDRC) have undoubtedly been major beneficiaries of the growth in disputes. The IDRC is the chosen venue for major commercial arbitrations in London and is barely 200m from the building that now houses the Commercial Court (the part of the High Court that deals with high-value disputes).

However, costly foreign proceedings might turn into a useless exercise (and a pyrrhic victory for the winner) if the enforcement of judgments only leads the claimant back to Russia. This article provides a brief overview of the current trends relating to enforcement of foreign judgments in Russia and flags some issues that a party seeking enforcement in Russia needs to take care of, either before or (at the very latest) at the outset of a dispute.

Although a few recent cases have demonstrated something of a positive tendency in the enforcement of foreign court judgments in Russia, arbitration remains the most secure dispute resolution method when seeking enforcement against assets there. The Russian Federation is a signatory to the 1958 New York Convention on the Enforcement of Foreign Arbitral Awards, thus making the process of recognition fairly straightforward. Public policy violations (for foreign arbitration awards, this is enshrined in article VI.2 of the convention, which has been incorporated as part of Russian law in the Commercial Procedure Code) remain the most common ground on which Russian courts will refuse to recognise or enforce a foreign arbitral award. In February 2013, the High Commercial Court of Russia published clarifications directing the courts to interpret and apply this ground narrowly when considering enforcement and recognition of both foreign court judgments and arbitral awards, which is likely to result in a higher ratio of successful enforcements in Russia of foreign court judgments and arbitral awards…

Click on the link below to read the rest of the Stephenson Harwood briefing.