Recognition of Foreign Court Judgments in Russia in Absence of a Treaty on Mutual Legal Assistance in CIS

Varvara Knutova
Senior Associate
Pepeliaev Group

Until recently, recognition and enforcement of foreign court decisions and rulings in Russia depended exclusively on whether Russia had concluded a special treaty on mutual legal assistancewith the relevant foreign country.

Under general rules, a motion should be filed with a relevant court of arbitration for the recognition and enforcement of a foreign court decision and ruling in Russia. Then the court of arbitration issues a ruling on the recognition and enforcement of the foreign court judgment and a writ of execution serving as the basis for the enforcement of the foreign court judgment in Russia. However, Russia did not conclude such international treaties on mutual legal assistance with all the countries. In particular, no relevant treaties have been concluded between Russia and many Western and Central European countries, the USA and Canada. This is the reason why foreign court judgments on disputes involving Russian companies could not be duly enforced. This impeded the favorable development of business between Russian and foreign companies, as foreign partners did not always have guarantees in respect to the legal protection of their interests.

The situation changed in 2009 when a Dutch company requested legal assistance from Pepeliaev, Goltsblat & Partners. The Dutch company was seeking recognition and enforcement in Russia of a judgment passed by a Dutch court. However, there was no treaty on mutual legal assistance between Russia and the Kingdom of the Netherlands. Consequently, based on the general rule, the judgment could not have been recognized and enforced in Russia.

Despite this fact, attorneys at Pepeliaev Group managed to win in court.

Arguments that convinced the court

Roman Serb-Serbin
Associate
Pepeliaev Group

Generally recognized principles and rules of international law and international treaties of the Russian Federation constitute an integral part of its legal system (Clause 4, Article 15 of the Russian Constitution).

One of the generally recognized principles of international law is the principle of international comity (Latin: comitas gentium), which prescribes that statestreat foreign legal order with comity.

There are other generally recognized principles of international law, among which we may highlight the principle of reciprocity originating from the principle of international comity. In the context of substantive law, the principle of reciprocity should be understood as the rule stipulating that foreign law is subject to mutual application for the purpose of developing cooperation between the countries. However, if one country refuses to apply the law of the other country in respective cases, the other country will also refuse to apply the law of the former country in its territory. This statement often applies to the recognition and/or enforcement of foreign court judgments and rulings.

The Russian Federation is a party to numerous international treaties and conventions stipulating a person’s right to a fair and public hearing before an independent and impartial court.

For example, by virtue of Clause 1, Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms dated Nov. 4, 1950, the enforcement of a judgment passed by any court of a contracting state should betreated by a Russian court as due observance of the person’s right to a fair trial.

On June 24, 1994, the Russian Federation concluded the “Partnership and Cooperation Agreement Establishing a Partnership between the Russian Federation, of the One Part, and the European Communities and Their Member States, of the Other Part” with a number of European countries (including the Kingdom of the Netherlands). Under this agreement, each contracting state assumed an obligation to ensure the non-discriminatory access of the individuals and legal entities of the other contracting states to the competent courts (Clause 1, Article 98 of the agreement).

In addition, it should be noted that the Russian Arbitration Procedure Code does not make the ability to recognize and enforce foreign court judgments conditional on the international treaty and/or federal law.

Consequently, irrespective of international treaties and federal laws, a foreign court judgment may be recognized and enforced in Russia on the basis of generally recognized principles of international law, such as the principles of reciprocity and international comity.

A formal refusal to recognize and/or enforce in Russia a foreign court judgment with the reference to the absence of the grounds specified in Clause 1, Article 241 of the Russian Arbitration Procedure Code shall constitute a direct violation of Part 4, Article 15 and Part 1, Article 46 of the Russian Constitution, and of a number of international conventions and agreements to which Russia is a contracting state.

Moreover, it should be noted that previously Russian courts had already confirmed the theoretical possibility of recognizing and enforcing foreign court judgments on the basis of such generally recognized principles of international law as the principles of reciprocity and comity.

Final court decisions

In June 2009, the Moscow Region Arbitration Court passed a ruling whereby the Dutch court judgment was recognized and enforced in Russia on the basis of the above international law principles.

Attorneys at Pepeliaev Group managed to convince the court that evidence of the recognition and enforcement of Russian court decisions in the Kingdom of the Netherlands is sufficient for recognizing and enforcing the judgment of a Dutch court in Russia on the basis of generally recognized principles of reciprocity and international comity.

The conclusions of the Moscow Region Arbitration Court on this case were upheld by the Federal Arbitration Court for the Moscow Circuit and subsequently by the Russian Supreme Arbitration Court.

Ruling No.VAS-13688/09 of the Russian Supreme Arbitration Court datedDec. 7, 2009, states: “… as follows from the content of the contested court decisions, the courts have correctly identified the procedural and substantive grounds for the recognition of the foreign court judgment: Article 241 of the Russian Arbitration Procedure Code, Clause4, Article 15 of the Russian Constitution; the generally recognized principle of international comity prescribing that countries should treat foreign legal order with comity; the principle ofreciprocity implying mutual respect bycourts in different states of their respective judgments; international treaties of the Russian Federation (Partnership and Cooperation Agreement Russia-European Union, Article 6 of the Convention for Protection of Human Rights and Fundamental Freedoms (1950)).

Moreover, the court’s conclusions do not run counter to the established practice of both arbitration courts and courts of general jurisdiction attesting to the enforcement of court decisions in the absence of a bilateral international treaty, which per se does not constitute an obstacle for recognizing and enforcing the judgment of a foreign state court in Russia. The courts have also identified examples of the mutual enforcement of judgments passed by Russian state courts in the Kingdom of the Netherlands.”

The victory of the attorneys at Pepeliaev Group offers new opportunities for the recognition and enforcement of foreign court judgments in Russia, while the absence of a special international treaty between Russia and a foreign country no longer constitutes unconditional grounds for refusal to recognize and enforce the foreign court judgment in Russia.