Concise coverage of the recognition and enforcement procedures in Russia, seasoned with recent case law and our firm's experience in the area

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Russia
Andrey Zelenin, Artem Antonov and Evgeny Lidzhiev
Lidings
1 Treaties
Is your country party to any bilateral or multilateral treaties
for the reciprocal recognition and enforcement of foreign
judgments? What is the country’s approach to entering into
these treaties and what if any amendments or reservations has
your country made to such treaties?
The Russian Federation itself, and as a successor to the USSR, is party to
several international treaties on the legal assistance in civil and commercial
matters, including the mutual recognition and enforcement of court judg-ments,
with such countries as Albania, Algeria, Belarus, Bulgaria, China,
Cuba, Cyprus, the Czech Republic, Egypt, Georgia, Greece, Hungary,
India, Iran, Iraq, Italy, Latvia, Lithuania, Moldova, Mongolia, North Korea,
Poland, Romania, Slovakia, Spain, Tunisia, Turkey, Vietnam, Yemen, and
the Republic of former Yugoslavia. In addition, Russia has ratified some
multilateral treaties that enshrine the recognition and enforcement of for-eign
judgments, inter alia, the Minsk Convention and the Kiev Agreement
between the CIS members. In these treaties the recognition and enforce-ments
proceedings are described in very broad terms and in most cases are
similar to the provisions of the national legislation.
In its turn, Russian legislation in section 1, article 409 of the Code of
Civil Procedure of the Russian Federation (CCP) provides that the enforce-ment
of a foreign judgment is possible only if such enforcement is provided
by an international treaty of the Russian Federation. A similar rule for com-mercial
disputes is stipulated in the section 1, article 241 of the Code of
Arbitrazh Procedure of the Russian Federation (CAP).
However, since there are no international treaties between Russia and
most of the European and American countries, case law tends to expand
the possibilities of the enforcement of foreign judgments in the Russian
Federation based on such principles of international law as comity and
reciprocity and a broader interpretation of other international treaties. For
example, recently, the Presidium of the Supreme Arbitrazh Court held in
the ruling of 8 October 2013 on case No. A40-56571/12, that recognition
and enforcement of the court order of Great Britain and Northern Ireland
could be granted based on the general provisions of the EU-Russia coop-eration
treaty.
In the ruling of the Supreme Arbitrazh Court of 7 December 2009 on
case No. A41-9613/09, the court found grounds for enforcement, substan-tiating
it on the principles of comity and reciprocity. Moreover, the court
underlined that the lack of a bilateral treaty itself is not an obstacle for rec-ognition
and enforcement.
2 Intra-state variations
Is there uniformity in the law on the enforcement of foreign
judgments among different jurisdictions within the country?
There are no any variations in the regulation of the enforcement procedure
within Russia since these matters lie with the competence of the federal
government.
3 Sources of law
What are the sources of law regarding the enforcement of
foreign judgments?
Generally, recognition and enforcement is subject to federal laws (the
CCP, the CAP and the Federal Law on Insolvency (bankruptcy)) and
international treaties of the Russian Federation. If an international treaty
provides an enforcement procedure that deviates from the one described
by federal law, the rules of international treaties prevail over the federal law
due to section 4, article 15 of the Constitution of the Russian Federation.
In addition to the above-mentioned legislative acts the Supreme
Arbirtrazh Court has interpreted matters of application of the public policy
defence in its Information Letter of 26 February 2013,No. 156, ‘Review
of arbitrazh practice on disputes on implementation of public policy as
a ground for refusal of the recognition and enforcement of foreign court
judgments and arbitral awards’. This Information Letter is used by the
lower courts as a guide (though not being obligatory) when resolving rec-ognition
and enforcement matters.
4 Hague Convention requirements
To the extent the enforcing country is a signatory of the Hague
Convention on Recognition and Enforcement of Foreign
Judgments in Civil and Commercial Matters, will the court
require strict compliance with its provisions before recognising
a foreign judgment?
The Russian Federation is not a signatory of the Hague Convention
on Recognition and Enforcement of Foreign Judgments in Civil and
Commercial Matters, thus, Russian courts are not bound by requirements
of that Convention.
5 Limitation periods
What is the limitation period for enforcement of a foreign
judgment? When does it commence to run? In what
circumstances would the enforcing court consider the statute
of limitations of the foreign jurisdiction?
According to section 3, article 409 CCP, a request for enforcement of a for-eign
judgment has to be brought within three years from the moment of
its entering in force. The same limitation period is stipulated in section 4,
article 246 CAP.
The moment of the commencement of the limitation period has to
be determined by the procedural law of the place of the rendering of the
judgment.
Generally, an enforcing court is not entitled to consider the statutes of
limitations of foreign jurisdiction, unless it can be considered as a matter
of public policy.
6 Types of enforceable order
Which remedies ordered by a foreign court are enforceable in
your jurisdiction?
According to the CCP and the CAP Russian courts may recognise and
enforce only final foreign judgments that have entered into force.
Money judgments are probably the most wide-spread category of for-eign
judgments enforced in Russia. There are no restrictions under the
Russian law with regard to money judgments. Orders for specific perfor-mance
also may be enforced in the territory of Russian Federation as a
legal remedy for the creditors’ rights under article 12 of the Civil Code of
Russian Federation.

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Interim injunctions cannot be enforced since they are not considered
as a final judgment. Nevertheless, a party to the foreign proceeding has the
right to request an interim injunction in support of the case directly in the
Russian courts.
7 Competent courts
Must cases seeking enforcement of foreign judgments be
brought in a particular court?
If the dispute arises from non-commercial matters, the competent enforc-ing
courts will be of the second instance at the place of the debtor’s
registration. If the dispute is between companies or entrepreneurs the
enforcement will be initiated in the court of the first instance – in the arbi-trazh
court at the place of the defendant.
8 Separation of recognition and enforcement
To what extent is the process for obtaining judicial recognition
of a foreign judgment separate from the process for
enforcement?
The terms ‘recognition’ and ‘enforcement’ in Russia are often used insepa-rably
to describe the court procedure of granting exequatur for a foreign
court judgment. However, for those judgments that do not require mone-tary
or specific performance from the debtor, a simplified recognition-only
procedure might take place.
According to article 415 CCP, courts of general jurisdiction may rec-ognise
without any further enforcement proceedings a foreign decision
on recognition of an individual as a civilian in some family matters and in
other cases stipulated in federal law. This simple procedure of recognition
is possible if the opponent has no objections regarding the case.
The CAP rules provide that the claimant could ask the enforcement
of award only together with its juridical recognition and consider these
processes as parallel. At the same time certain judgments in commercial
disputes (eg, to invalidate a transaction) could be recognised without the
enforcement under the Decree of the Supreme Soviet of the USSR of 21
June 1988, No. 9131-XI ‘On the recognition and enforcement in USSR
judgments of foreign courts and arbitration courts’. Subsection 2, section
1 of that Decree provides that foreign judgments that are not subject to
enforcement could be recognised if so provided by international treaty
or legislation. This Decree is implemented in court practice, for instance,
in the Ruling of the Federal Arbitrazh Court of Moscow district of 14 June
2012 on case No. A40-130760/2011.
9 Defences
Can a defendant raise merits-based defences to liability or to
the scope of the award entered in the foreign jurisdiction, or is
the defendant limited to more narrow grounds for challenging
a foreign judgment?
According to the CCP and the CAP, the court is not entitled to revise
the foreign judgment on its merits. A defendant can only submit objec-tions
on the limited grounds stated in the procedural law, such as public
policy issues. For instance, the Supreme Arbitrazh Court stipulated in its
Information Letter of 26 February 2013, No. 156 that recovery of liquidated
damages that are twice more than the inflicted harm contradicts with
Russian public policy, in particular with the principle of the adequacy of
liability of the parties.
10 Injunctive relief
May a party obtain injunctive relief to prevent foreign
judgment enforcement proceedings in your jurisdiction?
Russian procedural law does not contain such an institute as injunctive
relief, and it is not allowed to limit the right to apply to the court since it
would be in contradiction with the constitutional principle of access to jus-tice.
Instead, the defendant may suspend the process of recognition and
enforcement by submitting an appropriate statement.
For example, under article 143 CAP, a Russian arbitrazh court must
suspend any proceedings (including the foreign judgment enforcement
proceedings) in the case of impossibility of consideration of current
proceedings before resolution of another case in state courts of the Russian
Federation. Under article 144 CAP, the Russian Arbitrazh court may sus-pend
any proceedings (including the foreign judgment’ enforcement pro-ceedings)
for the period of a trial in an international court or foreign court
whose decision might be important for the current proceedings.
11 Basic requirements for recognition
What are the basic mandatory requirements for recognition of
a foreign judgment?
Russian procedure rules do not directly provide for any basic mandatory
requirements for recognition and enforcement of a foreign judgment, such
as compatibility with the Russian law or proper, personal, subject matter
jurisdiction. However, these issues might arise when the foreign judgment
is tested against the grounds for a refusal provided in article 412 CCP and
article 244 CAP.
For instance, under article 244 CAP an arbitrazh court will refuse rec-ognition
and enforcement of foreign judgment completely or partly if:
• the judgment has not entered into force according to the law of the
state where it was rendered;
• the defendant had no possibility of taking part in foreign proceedings
because of improper notification about the place and time of court
hearings or could not provide the foreign court with statements due to
another reason;
• trial of these category of disputes is subject to exclusive competence of
Russian state courts;
• there is a court judgment of the Russian Federation between the same
parties on the same grounds and on the same subject matter that has
entered into force;
• there are proceedings pending in Russia on the dispute between the
same parties on the same grounds and on the same subject matter,
which were commenced before the ones in foreign court;
• the limitation period for the enforcement of foreign judgments in
Russia has expired; and
• enforcement of a foreign judgment would contradict with Russian
public policy.
In addition, the applicant must comply with the requirements for the appli-cation
on the recognition and enforcement specified in article 411 CCP and
article 242 CAP, among which include, inter alia:
• a notarised copy of the foreign judgment;
• an official document certifying the entering into force of the judgment
if that does not follow from the text of the judgment itself;
• a document certifying the due notice of the defendant about the place
and time of foreign proceedings.
Foreign documents shall be presented with a notarised translation and
apostille stamp or consular legalisation, where appropriate.
12 Other factors
May other non-mandatory factors for recognition of a foreign
judgment be considered and if so what factors?
Only the Insolvency Law mentions reciprocity as a ground for recognition
and enforcement of foreign judgments in bankruptcy matters. However,
it should be noted that if an applicant is seeking the enforcement of an
ordinary foreign judgment under the principle of reciprocity, state courts
will likely examine if the respective foreign courts enforce Russian court
judgments.
13 Procedural equivalence
Is there a requirement that the judicial proceedings where
the judgment was entered correspond to due process in your
jurisdiction, and if so, how is that requirement evaluated?
There are no any special requirements for due process in foreign proceed-ings
under Russian procedural law. However, this might fall under the
broad interpretation of public policy objection commonly undertaken by
Russian courts.

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14 Personal jurisdiction
Will the enforcing court examine whether the court where
the judgment was entered had personal jurisdiction over the
defendant, and if so, how is that requirement met?
A Russian court will not check foreign jurisdiction rules, however, it will
decline enforcement if the dispute in question falls under the exclusive
competence of Russian courts (article 403 CCP and chapter 4 CAP),
namely:
• disputes arising from a contract for carriage if the carrier is based in
the territory of Russian Federation;
• disputes arising from public (administrative) relationships;
• bankruptcy disputes;
• corporate disputes according to article 225.1 CAP;
• disputes arising from state registration;
• disputes arising from the activities of a depository; or
• disputes arising from the activities of state corporations state
companies.
15 Subject-matter jurisdiction
Will the enforcing court examine whether the court where the
judgment was entered had subject-matter jurisdiction over the
controversy, and if so, how is that requirement met?
See question 14.
16 Service
Must the defendant have been technically or formally served
with notice of the original action in the foreign jurisdiction,
or is actual notice sufficient? How much notice is usually
considered sufficient?
Under the CCP and the CAP, non-compliance with requirements of noti-fication
is the ground for the refusal of recognition and enforcement of a
foreign judgment in Russia. Notice of parties is subject to international
treaties, for example, the Minsk Convention and the Hague Convention
on the Service Abroad of Juridical and Extrajuridical Documents in Civil
and Commercial Matters of 15 November 1965. Case law of the Supreme
Arbitrazh Court and lower courts mostly recognises that efficient notice
is not sufficient, since Russia has made a reservation on inadmissibility of
alternative methods of notice under article 10 of the Hague Convention.
Thus, the notice is a crucial point in enforcement procedure against
Russian parties.
A court of general jurisdiction and an arbitrazh court consider the
question of proper notice very carefully. However, if there is no evidence
of due service but the defendant took part in the proceedings by submit-ting
relevant motions or appointing a representative in oral hearings, it is
likely that the Russian court would enforce a foreign court judgment in
these cases.
17 Fairness of foreign jurisdiction
Will the court consider the relative inconvenience of the
foreign jurisdiction to the defendant as a basis for declining to
enforce a foreign judgment?
As mentioned above, Russian law does not provide any special
requirement for foreign proceedings. In this respect, Russian courts may
revoke enforcing a foreign judgment only in the case of substantial viola-tion
of fundamental principles of law and contradiction with Russian pub-lic
policy.
For instance, the Supreme Arbitrazh Court has pointed out that an
imposition of a duty to pay court bail as a requirement for appeal on the
party to foreign proceedings does not discriminate against parties and does
not contradict Russian public policy.
18 Vitiation by fraud
Will the court examine the foreign judgment for allegations of
fraud upon the defendant or the court?
Under Russian procedural law, a crime and criminal prosecution are not
recognised as a separate ground for a refusal of the enforcement.
Nevertheless, material harm and violation of the law in a foreign
judgment might be considered as a violation of Russian public policy. For
example, the Supreme Arbitrazh Court confirmed the rulings of lower
instances that refused to enforce a foreign judgment that was based on
falsified evidence.
19 Public policy
Will the court examine the foreign judgment for consistency
with the enforcing jurisdiction’s public policy and substantive
laws?
A Russian court may refuse to recognise and enforce a foreign judgment
under the ground of non-compliance with Russian public policy accord-ing
to subsection 5, section 1, article 412 CCP and subsection 7, section 1,
article 244 CAP. The Russian Civil Code provides that public policy means
fundamental principles and rules of Russian legislation and basics of
public order and morality. Winning parties should take into account that
along with improper notification, inconsistency with public policy is the
most common ground for refusal of enforcing foreign court judgments
in Russia (in over 80 per cent of the respective cases, according to recent
court statistics).
In its Information Letter of 26 February 2013, No. 156, the Supreme
Arbitrazh Court summarised major aspects and trends in the application
of public policy by Russian courts. In particular, it has been stated that the
court may examine the judgment on compliance with public policy with-out
a particular request from the parties. However, if a party raises a public
policy argument, it would need to substantiate the non-compliance with
Russian public policy by reference to a particular legislative provision or
principle that has been breached.
Notably, it was mentioned in the Information Letter that lack of any
specific foreign law rules in Russian law or non-approval of major deals or
a misprint in a judgment are not considered as a contradiction with public
policy.
20 Conflicting decisions
What will the court do if the foreign judgment sought to
be enforced is in conflict with another final and conclusive
judgment involving the same parties or parties in privity?
According to the CCP and the CAP, a competent court refuses to enforce
the foreign court judgment if there is a ruling of a Russian court on the
same subject matter with the same grounds and between the same parties.
Even if the dispute on the same matter, grounds and between the same
parties in a Russian court has not yet been resolved but the commence-ment
of these proceedings has begun earlier than in a foreign court, the
enforcement of a foreign judgment might be declined.
Existence of conflicting decisions in foreign jurisdiction per se would
not be considered by a Russian court as an obstacle for the enforcement.
21 Enforcement against third parties
Will a court apply the principles of agency or alter ego to
enforce a judgment against a party other than the named
judgment debtor?
Russian law does not recognise such concepts as alter ago or agency in
enforcing foreign court judgments. Only the parties mentioned in the deci-sion
can be involved in the enforcements proceedings.
22 Alternative dispute resolution
What will the court do if the parties had an enforceable
agreement to use alternative dispute resolution, and the
defendant argues that this requirement was not followed by the
party seeking to enforce?
Existence of a valid agreement to arbitrate or mediate the dispute is not
mentioned as a ground for refusal of enforcement in the CCP or the CAP.
There has not yet been any case law on this issue, however, there is some
potential for this in that unless the parties have explicitly or implicitly
waived their right to refer the dispute to arbitration, such a judgment might
be considered as contradictory to public policy.

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108 Getting the Deal Through – Enforcement of Foreign Judgments 2015
23 Favourably treated jurisdictions
Are judgments from some foreign jurisdictions given greater
deference than judgments from others? If so, why?
Judgments of Belarus commercial courts are enforceable in Russia under
the national treatment regime, without any recognition procedure and
examination.
According to article 1 of the Treaty between the Russian Federation
and the Republic of Belarus 2001 on mutual enforcement of judgments
of arbitrazh courts of the Russian Federation and commercial courts of
the Republic of Belarus, court judgments of Russian arbitrazh courts and
Belarus commercial courts do not require a specific recognition procedure
and are enforceable in the same manner as domestic judgments. Belarus
is the one and the only jurisdiction in which judgments are enforceable in
Russia without the exequatur.
It should be noted that the Treaty has effect only on the judgments of
commercial courts of Belarus. The judgments of courts of general jurisdic-tion
of Belarus are subject to the general enforcement procedure.
24 Alteration of awards
Will a court ever recognise only part of a judgment, or alter or
limit the damage award?
Article 244 CAP clearly provides that an arbitrazh court may refuse to
enforce the judgments fully or partly. This means that if the court finds
some grounds for refusal with regard to, for example, a punitive damage
award that still allows the enforcement of another part of the judgment (eg,
enforcement only on the decision on the merits and not the award on fees),
the court will have a power to recognise a part of the judgment.
However, the court, during enforcement procedure, cannot revise
the merits of the case and satisfy or decline the claims based on material
grounds. Hence, the court has no authority to increase or reduce the size of
the satisfied claims.
25 Currency, interest, costs
In recognising a foreign judgment, does the court convert the
damage award to local currency and take into account such
factors as interest and court costs and exchange controls?
If interest claims are allowed, which law governs the rate of
interest?
A Russian court is not obliged under the CCP and the CAP to award a sum
of money only in roubles, the national currency of Russian Federation.
Thus, there is no special need to convert the award of a foreign court into
roubles for enforcement. However, when performing the actual collection
of money or other debtor’s assets the bailiff will convert and enforce the
foreign judgment in roubles if the debtor does not have accounts in foreign
currency or they lack sufficient funds.
Court costs incurred in Russian proceedings can be recovered under a
separate ruling from the court following a respective application from the
winning party. The applicant will have to prove the reasonableness of the
amounts sought. The court costs in a foreign jurisdiction are recoverable as
long as they are indicated in the enforced judgment.
Unless otherwise provided in the foreign judgment itself, Russian
statutory interest can be claimed from the debtor until the amount of debt
is paid in full. The interest rate is determined as a median rate in the place
of the creditor’s residence.
26 Security
Is there a right to appeal from a judgment recognising or
enforcing a foreign judgment? If so, what procedures, if any, are
available to ensure the judgment will be enforceable against
the defendant if and when it is affirmed?
The ruling of the first instance court in recognition and enforcement cases
can be reviewed in several upper courts’ tiers both under the CAP and the
CCP. The CCP uses the term, appeal, while the CAP refers to the revision
procedure as cassation.
However the ruling of the court of first instance recognising and
enforcing the foreign judgment enters into force at the day of rendering.
The party that seeks to enforce a foreign judgment is able to commence
enforcement proceedings immediately via the Federal Bailiff Service.
Execution of the foreign judgment or award is subject to the same laws
and procedures that are routinely applied to execution of domestic judg-ments.
The federal bailiff service is able to apply a wide variety of measures
to ensure the enforceability of the judgment, including, but not limited to,
freezing of bank accounts, restricting the debtor’s ability to conduct trans-actions
with its assets and so on.
Update and trends
One of the most topical issues in dispute resolution in Russia is the
constitutional reform of the courts of high instance. Under the Law
of the Russian Federation on the Amendment to the Constitution
of the Russian Federation dated 5 February 2014, No. 2-FKZ (on the
Supreme Court of the Russian Federation and Prosecution Office
of the Russian Federation), the Supreme Arbitrazh Court has been
merged with the Supreme Court to create a new Supreme Court,
which will consider both commercial and ordinary cases. The
procedure in lower arbitrazh courts is also subject to a major change.
A new stage of appeal, the second cassation, before the Court
Division on Economic Disputes of the Supreme Court of the Russian
Federation, has been introduced. The decision of the Court Division
might then be also referred to the Presidium of the Supreme Court
for a final ‘supervisory’ review.
The changes took effect on 6 August 2014. It is yet to be seen
how these changes will affect court practice in the recognition and
enforcement cases. However, it should be noted that during the
transition period, all legal positions of the Supreme Arbitrazh Court
remain in force and can be used as a reference in court decisions
until new ones are developed by the new Supreme Court.
Andrey Zelenin azelenin@lidings.com
Artem Antonov aantonov@lidings.com
Evgeny Lidzhiev elidzhiev@lidings.com
Naberezhnaya Tower Block C
10 Presnenskaya nab
Moscow 123317
Russia
Tel: +7 495 989 44 10
Fax: + 7 495 989 44 20
www.lidings.com

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27 Enforcement process
Once a foreign judgment is recognised, what is the process for
enforcing it in your jurisdiction?
After recognising and enforcing a foreign judgment in a competent state
court, the applicant will receive there a writ of execution, and then apply
for the enforcement proceedings in the competent bailiff service at the
place of debtor’s residence, registration or property location. The bailiff
then undertakes measures to execute the foreign court judgment.
28 Pitfalls
What are the most common pitfalls in seeking recognition or
enforcement of a foreign judgment in your jurisdiction?
There are two most problematic issues in enforcement procedure: applica-tion
of the public policy and proper notice.
Russian arbitrazh courts and courts of general jurisdiction tend to
interpret the scope of public policy very broadly. As mentioned above, the
Supreme Arbitrazh Court systemised the court practice of the application
of public policy in its Information Letter on 26 February 2013, No. 156 and
illustrated when and how the public policy defence should or should not be
accepted. This has had a positive influence on the lower courts’ practice,
however, public policy still remains one of the most common grounds to
refuse recognition and enforcement of foreign judgments, and the respec-tive
objection is raised by Russian debtors in almost every enforcement
case in Russia.
Proper notice is also a very important question that should be kept
in mind by applicants in the early stages of a foreign proceeding against
parties from Russia. It is extremely important that the relevant notice is
made under the Hague Convention 1965 (when applicable), because, as
explained above, alternative notice mechanisms to Russian parties are not
recognised by Russian courts.