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Recognition And Enforcement Of Foreign Arbitral Awards In Russia – Remarkable Cases Of 2019-2020

Despite a large number of disputes involving Russian entities that are complicated by the presence of a foreign party, the practice of recognizing and enforcing international commercial arbitration decisions in Russia is not always consistent. This is especially true for cases where the other party (against whom a decision is rendered) alleges that the enforcement of the decision is in contradiction to public policy. This argument is the most common defence strategy, although the least predictable in terms of the court’s findings.

Readers are offered an overview of a number of interesting court cases for 2019–2020, which contain conclusions that are significant for practice formation.

Currency controls: the new rules for dealing with banks

In November 2017, two regulatory acts were published that made significant adjustments to the mechanisms for banks to control hard currency. The first one is Guideline Manual No. 181-И, issued by the Bank of Russia (the Central Bank), that must be followed starting January 1st, 2018 to record and furnish reporting on operations with hard currency (hereinafter Manual No. 181-И). The Manual is supposed to loosen currency controls by decreasing the burden borne by residents. The second act has the opposite effect, and is geared toward tightening currency controls. This is Federal Law No. 325-FZ, which, when it enters into force on May 14th, 2018, will make it easier for banks to respond to any violations of currency law, and draws distinctions between the types of administrative liability in this area.

The powers of the court of cassation: assessment of the law, lack of evidence

Can a court of cassation facilitate the implementation of procedural law (for example, the right to present evidence, objections to the opponent’s arguments, etc.) by means of sending a case for a new trial in the lower court? An answer to this question was obtained after reviewing the decision of the Supreme Court of the Russian Federation on case No. A76-2453/2015.

Overturning the enforcement of a judgment: is it possible to collect interest?

According to Part 1 of Article 325 of the Arbitration Procedure Code, if the enforcement of an act is repealed, in whole or in part, and a new judicial act adopted, on a full or partial denial of the claim, or the claim is left without consideration, or the proceedings were terminated, the defendant is returned all that was recovered from him in favour of the plaintiff on the repealed, or modified in the relevant part, judicial act. In the application of the rule of law, courts have said there were issues related to the accrual of interest for the use of funds in the case when these funds were transferred to the claimant, after the entry into force of the judicial act, but later the judicial act was abolished through a cassation appeal. Answers to these questions were given by the court when resolving a particular dispute.

The Supreme Court is against illegal tax control over price levels

On 11 April 2016, the Judicial Chamber on Economic Disputes of the Supreme Court issued a ruling on Case No. A63-11506/14, and with that, sided with the taxpayer in a dispute with the tax authorities. The Supreme Court of the Russian Federation stated that the territorial tax authorities, within cameral and field tax audits, are not allowed to control the market price levels in transactions between related parties.

Review of practice: Decisions of the Supreme Court of the Russian Federation on the Protection of Competition in 2015

We are nearing the end of 2015. Over the past year, the Supreme Court ruled on over 400 judicial acts related to violations of antitrust laws, and bringing companies to administrative responsibility for such violations. Some of the acts, the Supreme Court of the Russian Federation supported and confirmed by already existing legal positions, while for others, it formulated new approaches to certain issues of antitrust legislation. This research report consists of a description of the most significant and interesting, in our opinion, decisions made by the Supreme Court in 2015.

Abuse of rights in making calculations between the network organizations – innovation of the Supreme Court

Decision of the RF Supreme Court dated 08.04.2015 No. 307-ES14-4622 on Case No. A26-6783/2013, concerning a dispute between the Prionezhsky Grid Company OJSC and Petrozavodsk Utilities JSC. (This legal update is available only in Russian)

Provisions of the new Administrative Procedures Code of the Russian Federation

As part of judicial reform in the Russian Federation, on 08 March 2015, the Administrative Procedures Code was adopted. The provisions of the adopted Code will apply in the consideration of cases arising from administrative and other state relations, starting already on 15 September 2015. Moreover, the sphere regulated by this Code will include cases on which proceedings were commenced before the said date. (This legal update is available only in Russian)

Price changes involving technological connection contracts

The Supreme Court upheld the authority of local regulators to issue regulations on price changes involving technological connection agreements. (This legal update is available only in Russian)

The Supreme Court specified the explanation provided by the presidium of the high arbitration court with respect to the payment for the works completed with no public contract

The amount of the disputes resolved in court and related to the scope, quality, cost and terms of contracting works is permanently large. Most of them arise out of the relations associated with the works performed for public or municipal needs. In the current economic context, the amount of such disputes will only be increasing. It is not uncommon that the mater in dispute is related to the payment for works performed by the contractor for public or municipal needs with no contract made in accordance with the established practice.