Challenging and Enforcing Arbitration Awards: Russia

1. Must an award take any particular form?

Russia

Under Article 31 of the Law on International Commercial Arbitration (the ICA Law) the arbitral award shall be made in writing and signed by a sole arbitrator or by either all members of an arbitral tribunal or its majority subject to an indication of the reason for the absence of any signatures. The award shall state the reasons on which the award is based, the conclusion on the grant or dismissal of a claim, and the amounts of the arbitral fees and costs and their allocation between the parties. The award shall contain the date on which the award was made and indicate the place of arbitration. Copies of the award shall be produced and served to each party.

A copy of an arbitral award shall be duly certified by a notary public in the case of ad hoc arbitration or by the permanent arbitral institution that administered the case (ICA Law, Article 35(2); Commercial Procedure Code, Article 237(4)(1); Civil Procedure Code, Article 419(4)(1)). Certification is obligatory if a party applies for the enforcement or setting aside of an award on Russian territory.

2. Are there provisions governing modification, clarification or correction of an award? Are there provisions governing retractation or revision of an award? Under what circumstances may an award be retracted or revised (for fraud or other reasons)? What are the time limits?

Russia

Under Article 33 of the ICA Law, within 30 days of receipt of the award or within another term agreed by the parties, a party, with notice to the other parties, may request the arbitral tribunal:

• to correct in the award any error in computation, any clerical error or any error of a similar nature; or
• subject to the parties’ agreement, to give an interpretation of a specific point or part of the award.

If the arbitral tribunal considers that the request for correction or interpretation is justified, it shall make the correction or give the interpretation within 30 days of receipt of the request. The interpretation by the arbitral tribunal forms part of the award.

The arbitral tribunal may, within 30 days of the date on which the award was made, make corrections of any error in computation, any clerical error or any error of a similar nature on its own initiative.

Unless the parties have agreed otherwise, within 30 days of receipt of the award, a party, with notice to the other parties, may request the arbitral tribunal to make an additional award regarding claims presented in the arbitral proceedings but not decided by the arbitral tribunal. If the arbitral tribunal considers the request for an additional award to be justified, it shall render an additional award within 60 days of receipt of the request.

Russian law does not provide for the revision of arbitral awards on the merits by either permanent arbitration institutions or state courts.

3. May an award be appealed to or set aside by the courts? What are the differences between appeals and applications to set aside awards?

Russia

An arbitral award cannot be appealed before the Russian courts. Russian law provides for the setting aside of an arbitral award in a limited number of circumstances (Commercial Procedure Code, Article 233; Civil Procedure Code, Article 421).

An arbitration agreement may provide that the arbitral award is final for its parties and that they cannot seek to set the arbitral award aside, if the case is administered by the permanent arbitral institution (ICA Law, Article 34(1)). The agreement on the finality of the arbitral award applies only to the parties to the arbitration. Other persons, whose rights and obligations are affected by the arbitral award, retain their right to seek the setting aside of the arbitral award (Resolution of the Plenum of the Supreme Court No. 53 of 10 December 2019, Paragraph 43(3)).

4. Is there a time limit for applying for the setting aside of an arbitral award?

Russia

A request to set aside an arbitral award must be filed no later than three months after the date of receipt of the award by the applying party, unless set out otherwise by an international treaty or a Russian law (Commercial Procedure Code, Article 230(4); Civil Procedure Code, Article 418(2)).

A person who is not a party to the arbitration but whose rights and obligations are affected by the arbitral award, as well as the state prosecutor in certain cases established by the Commercial Procedure Code, may file a request to set aside the arbitral award within three months of the date when they learned, or should have learned, about the arbitral award (Commercial Procedure Code, Article 230(5)).

This term might be extended where it has been missed for a good cause. The Supreme Court maintained this rule on the missed term in its Ruling of 6 March 2019 No. 5307-ES18-22835 in Case No. A56-26527/2017, taking into consideration that the person, who was not a party to the arbitration and missed the statutory term to file a request to set aside the arbitral award, took an active approach in defending his rights affected by the contested arbitral award outside the arbitration proceedings.

5. What kind of arbitral decision can be set aside in your jurisdiction? What are the criteria to distinguish between arbitral awards and procedural orders in your jurisdiction? Can courts set aside partial or interim awards?

Russia

Under Russian law and practice, Russian courts usually set aside final awards on the merits of the dispute but not partial or interim awards; however, an interim award on the jurisdiction of an arbitral tribunal may be set aside in accordance with a party’s request filed within one month of receipt of the interim award (Commercial Procedure Code, Article 235; Civil Procedure Code, Article 422.1). At the same time, parties to a dispute administered by the arbitral institution are entitled to exclude that option by their explicit agreement (ICA Law, Article 16(3)).

6. Which court has jurisdiction over an application for the setting aside of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

Russia

The Russian state court having jurisdiction over the place where the arbitral award was rendered (e.g., the State Commercial Court of Moscow for Moscow) is entitled to consider a request for setting aside an arbitral award (Commercial Procedure Code, Article 230(4); Civil Procedure Code, Article 418(2)).

Parties to the arbitration may agree that a request to set aside the arbitral award is to be brought to a district court of general jurisdiction, or to a commercial court of a constituent entity of Russia, on whose administrative territory one of the parties has their domicile or residence (Commercial Procedure Code, Articles 38(8.1) and 230(4); Civil Procedure Code, Article 418(2)).

7. What documentation is required when applying for the setting aside of an arbitral award?

Russia

The request for setting aside an arbitral award must contain the following (Commercial Procedure Code, Article 231; Civil Procedure Code, Article 419):

• a written application signed by the party or its representative;
• a copy of the arbitral award signed by the arbitrators and served to a party in accordance with the Russian law;
• the original arbitration agreement or its duly certified copy;
• any documents supporting the party’s request to set aside an arbitral award;
• a document confirming payment of the state fee in the manner and amount set out by Russian law;
• evidence of service, or another document confirming that a copy of a request to set aside an arbitral award has been sent to the other party; and
• power of attorney or any other document confirming the powers of the person who has signed the application (the original or a duly certified copy).

It is usually sufficient to provide the court with one copy of each of the documents. The documents may be filed with the court in digital form.

A person who is not a party to the arbitration but whose rights and obligations are affected by the arbitral award may attach to the request for setting aside an arbitral award any documents confirming that the contested arbitral award has been rendered (Commercial Procedure Code, Article 231(5)).

8. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with the application for the setting aside of an arbitral award? If yes, in what form must the translation be?

Russia

Russian law requires court proceedings to be conducted in Russian (Law on the State Language of Russia, Article 1; Commercial Procedure Code, Article 12; Civil Procedure Code, Article 9). Any documentation in a language other than Russian presented to the Russian court requires translation into Russian and certification by a notary public. In practice, the notary public sometimes certifies the signature of the translator rather than the accuracy of translation.

9. What are the other practical requirements relating to the setting aside of an arbitral award? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

Russia

A request for setting aside an arbitral award requires payment of the state court fee of 3,000 roubles. Other likely costs include legal fees and fees for translation and certification by a notary public. The request and all the supporting documents must be in Russian. Any documentation available in a language other than Russian requires translation into Russian and certification by a notary public. There is no limitation on the length of the submissions or of the documentation filed by the parties.

10. What are the different steps of the proceedings?

Russia

A request for setting aside an arbitral award shall be considered by a sole judge within one month of receipt of the request by the court. In practice, the one-month term is not always kept by the court. The steps of the proceedings include case preparation, preliminary hearings and hearings on the merits.

At the stage of case preparation, a judge may, at the request of the parties, require the arbitration case file to be provided. In practice, the arbitration case file is regularly requested by the judge, notwithstanding any request of the parties.

It is recommended that the parties attend the preliminary hearings and the hearings on the merits since the case may otherwise be heard by the judge in their absence. The proceedings include review by the judge of the evidence presented by the parties, the parties’ statements based on the evidence and exchange of parties’ responses to the statements.

If the request for setting aside the arbitral award was filed on any of the following grounds, the court is entitled to suspend the setting-aside proceedings of the arbitral award at the request of a party to the dispute for a period not exceeding three months so that the arbitral tribunal resumes the arbitration proceedings and removes the grounds for setting aside the arbitral award (Commercial Procedure Code, Article 232(5)):

• the party was not duly notified on the arbitration or on appointment of the arbitrator;
• the party could not provide their explanations during the arbitration;
• the arbitral award was rendered beyond the scope of the arbitration clause;
• the arbitral award does not otherwise fall within the ambit of the arbitration clause; or
• the composition of the arbitral tribunal or the arbitration procedure was inconsistent with the arbitration clause or Russian law.

11. May an arbitral award be recognised or enforced pending the setting-aside proceedings in your jurisdiction? Do setting-aside proceedings have suspensive effect? If not, which court has jurisdiction over an application to stay the enforcement of the award pending the setting-aside proceedings, what are the different steps of the proceedings, and what are the criteria to be met?

Russia

An arbitral award may be recognised or enforced only after resolution of a request for setting aside the arbitral award. The Russian court may suspend the proceedings on recognition and enforcement pending the setting-aside proceedings if the court finds it to be justified. In practice, Russian courts suspend recognition or enforcement proceedings of arbitral awards until the setting-aside request is resolved, to avoid contradictory court rulings.

12. What are the grounds on which an arbitral award may be set aside?

Russia

In accordance with the application of the party against which the arbitral award was rendered, an arbitral award may be set aside based on:

• incapacity of one of the parties to the arbitral agreement; and
• invalidity of an arbitration agreement under the law chosen by the parties or, in the absence of a choice of law, under Russian law.

There is a trend in recent years of Russian courts moving towards validity presumptions of arbitration clauses. Evidence of the trend is, for instance, the decision of the State Commercial Court of Moscow in Case No. A40-150562/2020 of 5 February 2021, according to which a potentially unclear reference to an arbitration centre might be easily rectified in favour of the enforceability of the arbitration agreement.

The pro-arbitration approach is also reflected in Paragraphs 20 to 23 of the Resolution of the Plenum of the Supreme Court No. 53 of 10 December 2019. In particular, according to the provisions of the Plenum:

• the validity of an arbitration clause is considered as independent from that of the contract to which the clause relates;
• the arbitration agreement applies, as a general rule, to any contracts and agreements aimed at execution, modification or termination of the contract specified in the arbitration agreement, as well as to any disputes relating to the conclusion, coming into force, amendment, termination and validity of the contract and all claims arising from non-contractual harm or unjust enrichment relating to the contract; and
• a party to the arbitration agreement who challenges its validity and enforceability must prove that there is no way to interpret the arbitration agreement such that it can be considered as valid and enforceable.

An arbitral award may be set aside if:

• it is made in respect of disputes falling outside an arbitration agreement. Russian law permits the setting aside of only parts of an arbitral award containing conclusions on claims not covered by an arbitration agreement and to keep in effect parts of an arbitral award containing conclusions on claims covered by an arbitration agreement if those parts may be separated from those that are set aside;
• an arbitral tribunal or an arbitration procedure was not in accordance with the parties’ agreement or mandatory rules of the applicable lex arbitri;
• the party against which an arbitral award was rendered was not properly notified about the appointment of an arbitral tribunal or an arbitrator, or about the time and place of hearings, or by other justified reasons was unable to present its position before an arbitral tribunal; or
• at the discretion of a Russian court, the subject matter of the dispute could not be resolved by arbitration under Russian law (non-arbitrability).

In practice, non-arbitrable disputes are those that:

• arise from administrative and other public legal relations (Commercial Procedure Code, Article 225.1(2)(2)(1); Civil Procedure Code, Articles 1(4), 22(1)(8) and 22(11)));
• arise from relations regulated by Federal Law No. 44-FZ on Contracts for Public Procurement of Goods, Works and Services (Resolution of the Plenum of the Supreme Court No. 53 of 10 December 2019, Paragraph 17(5));
• concern fact-finding cases considered in a special proceeding (Commercial Procedure Code, Chapter 27; Civil Procedure Code, Articles 22(2)(1) and 262); and
• involve the participation of sanctioned persons or entities (Commercial Procedure Code, Article 248.1).

Despite these limitations, there is a gradually developing pro-arbitration trend reflected in the practice of the Supreme Court. The Judicial Collegium for Economic Disputes of the Supreme Court indicated in Ruling No. 305-ES17-7240 of 11 July 2018 that the mere connection between the dispute and social needs is not enough to conclude that the dispute is not arbitrable.

The only recent reservation from the overall pro-arbitration picture was made by the Supreme Court in Ruling No. 309-ЭС21-6955 (1-3) of 9 December 2021, according to which imposition of sanctions against a Russian person by the Supreme Court indicates that full judicial protection is impossible for that person in a foreign state. This approach stretches the scope of Article 248.1 of the Commercial Procedure Code.

An arbitral award may be set aside if is contrary to Russian public policy. Simultaneously, any part of an award not contrary to Russian public policy will be kept in effect if the part that violates public policy can be separated from the arbitral award.

To set aside an arbitral award or to prevent enforcement of an arbitral award on the ground of violation of public policy, the court must establish that, first, the arbitral award is contrary to the fundamental principles of the economic, political or legal system of Russia and that, second, violation of the above principles may damage the sovereignty or security of Russia, affect the interests of large social groups or the constitutional rights and freedoms of individuals or legal entities. 

Arbitral awards against sanctioned entities and individuals

There might be challenges in enforcing arbitral awards against sanctioned entities and individuals. The Federal Law of 8 June 2020 No. 171-FZ introduced into the Commercial Procedure Code two new means of judicial protection for persons subject to ‘restrictive measures’ (i.e., sanctions):

• exclusive jurisdiction of the Russian arbitrazh (state commercial) courts for disputes involving those persons; and
• the right to request prohibition to initiate or continue proceedings in a foreign court or international commercial arbitration located outside Russia. 

The application of these provisions was clarified by the Supreme Court in Case No. A60-36897/2020 (i.e., the Ruling of the Collegium on Economic Disputes of the Supreme Court of 9 December 2021, and as confirmed by the refusal of the Supreme Court’s Presidium to reconsider the case by virtue of the Ruling of 26 April 2022).

The Supreme Court stated that the above-mentioned measures require a very low threshold in terms of compliance with the burden of proof: to obtain an injunction against continuation of pending international arbitration proceedings, there is no need to prove that the applicant has actual difficulties in exercising the right to judicial protection, at least in the foreign state that applies the sanctions. In other words, there is a presumption that the right to judicial protection is not appropriately provided for with respect to a sanctioned entity or individual, if an arbitration takes place in the country that introduced the sanctions.

While this does not directly relate to the enforcement of arbitral awards, the interpreted provisions of law establish that the norms do not prevent the recognition and enforcement of a foreign court decision or a foreign arbitral award adopted in respect of a sanctioned person, or if the sanctioned person:

did not object to the consideration of the dispute with their participation by a foreign court, international commercial arbitration, located outside the territory of Russia, including not applying for a ban on initiating or continuing proceedings in a foreign court, international commercial arbitration, located outside the territory of Russia.

This provision can be read as allowing for a situation in which the objection by a sanctioned person or entity to consideration of a dispute by an international tribunal, including by way of applying for an injunction described above, constitutes an obstacle to the recognition and enforcement of an arbitral award against that sanctioned person or entity; however, relevant court practice is yet to be developed.

13. When assessing the grounds for setting aside, may the judge conduct a full review and reconsider factual or legal findings from the arbitral tribunal in the award? Is the judge bound by the tribunal’s findings? If not, what degree of deference will the judge give to the tribunal’s findings?

Russia

No. On assessing the grounds for setting aside an arbitral award, Russian state courts are not entitled to review the award on the merits (i.e., reconsider the factual or legal findings) as it lies outside the scope of the state courts’ competence. This position is supported by Paragraph 12 of the Information Letter of the Presidium of the Higher Arbitrazh (State Commercial) Court of Russia of 22 December 2005 No. 96, which states that when considering an application for setting aside an arbitral award, the court is not entitled to review the decision on the merits.

When examining the case, the court is limited to establishing the presence or absence of grounds for setting aside the decision of the arbitration tribunal, provided for in Article 233 of the Commercial Procedure Code, and examining the totality of the evidence presented in support of the claims, without reassessing the essence of the specific circumstances of the case.

This position is widely upheld by the courts (e.g., Ruling of the Supreme Court of 21 October 2020 No. 305-EC20-15104 in Case No. A40-216997/2019; Ruling of the Supreme Court of 12 May 2020 No. 305-EC20-6815 in Case No. A40-193690/2019; Ruling of the Supreme Court of 9 December 2019 No. 305-EC19-22039 in Case No. A40-68377/2019). Russian state courts are not bound by a tribunal’s findings. The court may take the findings into account, but given the lack of a corresponding duty to do so, it is difficult to predict what weight the court will ascribe to the findings.

14. Is it possible for an applicant in setting-aside proceedings to be considered to have waived its right to invoke a particular ground for setting aside? Under what conditions?

Russia

Yes, this is possible with respect to the ground of the lack of competence of the tribunal. The possibility to use the defence in setting aside the proceedings is not determined strictly as the court will assess situations on a case-by-case basis.

However, overall, if a party that requests the setting aside of the award based on lack of competence of the tribunal was aware of the lack of competence and did not use the right to file relevant arguments within the framework of the arbitration proceedings, that omission may be treated as bad faith procedural behaviour and entail the loss of the right to object in court (estoppel).

This position is explicitly recognised in the overview of the practice of consideration by the courts of cases concerning the performance of the functions of assistance and control in relation to arbitral tribunals and international commercial arbitration courts, as approved by the Presidium of the Supreme Court on 26 December 2018.

15. What is the effect of the decision on the setting-aside application in your jurisdiction? What challenges or appeals are available?

Russia

The court ruling on the setting aside of an arbitral award takes effect on the day the ruling is rendered and is immediately enforceable.

The court ruling on the setting aside of an arbitral award may be appealed before a competent cassation court within one month of the date on which the ruling was rendered. Subsequently, the cassation court ruling may be challenged before the Supreme Court, subject to a preliminary review of admissibility of the challenge owing to the principle of selective cassation revision by the Supreme Court.

16. Will courts take into consideration decisions rendered in relation to the same arbitral award in other jurisdictions or give effect to them?

Russia

Russian courts generally prefer to preserve their adjudicative sovereignty and usually do not take into account foreign judgments before the foreign judgments are recognised by the court system. At the same time, the parties may provide the texts of foreign judgments duly translated into Russian and certified by a notary public to a Russian court as written evidence, and the judge may review and potentially take into account approaches applied in the proceedings outside Russia if this does not contradict Russian law and practice.

17. What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

Russia

The applicable procedural law for recognition and enforcement of an arbitral award in Russia varies depending on whether the arbitral award is rendered under domestic or foreign (international) arbitration.

The applicable procedural law for domestic arbitral awards (i.e., arbitral awards rendered on Russian territory) includes Articles 236 to 240 of the Commercial Procedure Code, Articles 423 to 427 of the Civil Procedure Code and the Law on Arbitration in Russia.

The applicable procedural law for foreign arbitral awards (i.e., arbitral awards rendered outside Russian territory) includes Articles 241 to 246 of the Commercial Procedure Code, Articles 416 and 417 of the Civil Procedure Code and the ICA Law. Article 245.1 of the Commercial Procedure Code also mentions arbitral awards that do not require recognition and enforcement (e.g., fact-finding rulings).

Russia is a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and the 1961 European Convention on International Commercial Arbitration. Russia is a party to the 1972 Moscow Convention on the Settlement by Arbitration of Civil Disputes Arising from Relations of Economic, Scientific and Technical Cooperation. Russia is also a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) of 16 June 1992, although this Convention has not yet been ratified.

18. Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?

Russia

Russia is a party to the 1958 New York Convention. The Convention took effect for the Soviet Union on 24 August 1960, and Russia, as a predecessor, made a reservation for the application of reciprocity to non-parties to the Convention.

19. Is there a time limit for applying for the recognition and enforcement of an arbitral award?

Russia

An application for the recognition and enforcement of an arbitral award can be made within three years of the date on which an arbitral award took effect (Commercial Procedure Code, Article 246(2); Civil Procedure Code, Article 409(3)). The three-year term can be extended if it has been missed for a good cause.

20. Which court has jurisdiction over an application for recognition and enforcement of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

Russia

The court at the location of a debtor, or, if the location of the debtor is unknown, at the location of a debtor’s property, has jurisdiction over an application for the recognition and enforcement of an arbitral award (Commercial Procedure Code, Articles 236 and 242; Civil Procedure Code, Articles 410 and 423).

In domestic arbitration, the court of the region in which the arbitral award was rendered, or the court of the domicile of the winning party, may be agreed by the parties as having jurisdiction over an application for the recognition and enforcement of a domestic arbitral award.

21. What are the requirements for the court to have jurisdiction over an application for recognition and enforcement and for the application to be admissible? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

Russia

The parties must comply with the territorial jurisdiction of the court.

Application for recognition and enforcement of a foreign arbitral award is to be brought to the higher general jurisdiction court of a constituent entity of Russia or to a commercial court of a constituent entity of Russia, on whose administrative territory the debtor has its domicile or, if the place of the debtor’s domicile is unknown, to the higher general jurisdictional court of a constituent entity of Russia or a commercial court of a constituent entity of Russia at the location of the debtor’s property (Commercial Procedure Code, Articles 38(9) and 242(1); Civil Procedure Code, Articles 1(4), 26(1)(9) and 410).

If an application for recognition and enforcement of an arbitral award is filed with the court at the location of a debtor’s property, the applicant must identify the debtor’s property that may be subject to enforcement. Russian law does not require an applicant to list any of the debtor’s assets in the territory of the court’s jurisdiction, although the absence of identification may hinder the proceedings because it will be more difficult for the court to recognise its jurisdiction over the application.

22. Are the recognition proceedings in your jurisdiction adversarial or ex parte? What are the different steps of the proceedings?

Russia

Recognition proceedings are adversarial in Russia. It is recommended that the parties attend the proceedings since the case may otherwise be heard by the judge in their absence.

An application for recognition and enforcement of an arbitral award is considered by a sole judge within one month of receipt of an application by the court. In practice, the one-month term is not always kept by the court. The proceedings include a review by the judge of the evidence presented by the parties, the parties’ statements based on the evidence and exchange of the parties’ responses to the statements.

23. What documentation is required to obtain recognition?

Russia

An application for recognition and enforcement of an arbitral award must contain the following (Commercial Procedure Code, Articles 237 and 242; Civil Procedure Code, Article 424):

• a written application signed by the party or its representative;
• the certified original of the arbitral award or its duly certified copy;
• the original arbitral agreement or its duly certified copy;
• a document confirming payment of the state fee in the manner and amount set out by Russian law;
• power of attorney or any other document confirming the powers of the person who has signed the application (the original or a duly certified copy); and
• duly certified translations of the award, arbitral agreement and any other documents in a foreign language.

It is usually sufficient to provide the court with one copy of each of the documents. The documents may be filed with the court in digital form.

24. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition? If yes, in what form must the translation be?

Russia

Russian law requires court proceedings to be conducted in Russian (Law on the State Language of Russia, Article 1; Commercial Procedure Code, Article 12; Civil Procedure Code, Article 9). Any documentation in a language other than Russian presented to the Russian court requires translation into Russian and certification by a notary public. In practice, the notary public sometimes certifies the signature of the translator rather than the accuracy of translation.

25. What are the other practical requirements relating to recognition and enforcement? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

Russia

An application for recognition and enforcement of an arbitral award is filed by the winning party. The application requires payment of the state court fee of 3,000 roubles. Other likely costs include legal fees and fees for translation and certification by a notary public.

The request and all the supporting documents must be in Russian. Any documentation available in a language other than Russian requires translation into Russian and certification by a notary public.

There is no limitation regarding the length of the submissions or of the documentation filed by the parties.

26. Do courts recognise and enforce partial or interim awards?

Russia

Under Russian law and practice, Russian courts usually recognise and enforce final awards on the merits of the dispute but not partial or interim awards, including interim awards on procedural matters or awards on preliminary measures.

27. What are the grounds on which an arbitral award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the New York Convention?

Russia

The grounds on which an arbitral award may be refused recognition or enforcement coincide with those set out in Article V of the 1958 New York Convention.

The applicable grounds on which a domestic arbitral award (i.e., an arbitral award rendered on Russian territory) may be refused recognition or enforcement are set out in Article 239 of the Commercial Procedure Code, Article 426 of the Civil Procedure Code and Article 42 of the Law on Arbitration in Russia.

The applicable grounds on which a foreign arbitral award (i.e., an arbitral award rendered outside Russian territory) may be refused recognition or enforcement are set out in Articles 244(3) of the Commercial Procedure Code, Articles 412(1)(5), 416(1) and 417(1)(3) of the Civil Procedure Code and Article 36 of the ICA Law.

Russian courts may refuse recognition and enforcement of an arbitral award ex officio based on such grounds as non-arbitrability of the dispute and the arbitral award being contrary to public policy.

28. When assessing the grounds for refusing recognition, may the recognition judge conduct a full review and reconsider factual or legal findings from the arbitral tribunal in the award? Is the judge bound by the tribunal’s findings? If not, what degree of deference will the judge give to the tribunal’s findings?

Russia

Given that most of the grounds on which an award can be refused enforcement relate to procedural issues, the only ground that might entail review of the case on the merits is public policy. According to the position set out in the Information Letter of the Presidium of the Higher Arbitrazh (State Commercial) Court of Russia of 26 February 2013 No. 156, an assessment by a court of the consequences of the enforcement of a foreign judicial decision or an arbitral award with regard to a violation of Russian public policy should not lead to its revision on the merits. 

29. Is it possible for a party to be considered to have waived its right to invoke a particular ground for refusing recognition of an arbitral award?

Russia

If the party was in possession of information confirming a lack of competence of an arbitral tribunal but did not raise relevant arguments during the arbitration proceedings, the omission might be treated as bad faith procedural behaviour and entail the loss of the right to object against that lack of competence in the state court.

30. What is the effect of a decision recognising an arbitral award in your jurisdiction?

Russia

The court ruling on the recognition and enforcement of an arbitral award takes effect on the day when the ruling is rendered and is immediately enforceable. The ruling may be appealed before a competent cassation court within one month of the date on which it was rendered. Subsequently, the cassation court ruling may be challenged before the Supreme Court, subject to a preliminary review of the admissibility of the challenge owing to the principle of selective cassation revision by the Supreme Court.

The challenge against a court ruling on the recognition and enforcement of an arbitral award does not suspend enforcement; however, a party may file a motion on the suspension of the enforcement of an arbitral award together with its appeal, based on which the court may grant the suspension of the enforcement of the arbitral award.

31. What challenges are available against a decision refusing recognition in your jurisdiction?

Russia

The court ruling on recognition and enforcement of an arbitral award may be appealed before a competent cassation court within one month of the date on which the ruling was rendered. Subsequently, the cassation court ruling may be challenged before the Supreme Court, subject to a preliminary review of admissibility of the challenge owing to the principle of selective cassation revision by the Supreme Court.

32. What are the effects of annulment proceedings at the seat of the arbitration on recognition or enforcement proceedings in your jurisdiction?

Russia

Russian courts may suspend the recognition or enforcement of an arbitral award at the request of one of the parties if an application to set aside or suspend the enforcement of a foreign arbitral award is pending before a foreign court (New York Convention, Article VI; Commercial Procedure Code, Article 243(5); Civil Procedure Code, Article 417(2)). The requesting party must prove the existence of pending proceedings at the seat of the arbitration that may affect the legal effect or finality of the enforced arbitral award. There is not yet an established practice of application of the above Russian law provisions by Russian courts as they were added as a part of the arbitration reform in 2016.

33. If the courts adjourn the recognition or enforcement proceedings pending annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security?

Russia

In the case of a suspension of recognition and enforcement of an arbitral award, the Russian court may require the party seeking suspension to provide security at the request of the enforcing party (1958 New York Convention, Article VI; Commercial Procedure Code, Article 243(6)). The court may grant the security if the requesting party proves that a failure to grant the security may hinder the enforcement or make it impossible, or the requesting party may suffer significant damage in the absence of the security. The practice of application of these provisions by Russian courts is extremely limited to date.

There is one example from the Commercial Court of the Ural District where, in response to the respondent’s request for the suspension of the recognition and enforcement of an arbitral award, the claimant sought from the defendant security in the amount equivalent to the amount of the arbitral award (i.e., US$16,691,176.95); however, the court dismissed the motion on security (Ruling of the Commercial Court of the Ural District No. F09-8673/18 in Case No. A76-26938/2018 of 10 December 2018). This court ruling was upheld by a court of appeal.

34. Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an arbitral award is set aside after the decision recognising the award has been issued, what challenges are available?

Russia

Annulment of a foreign arbitral award excludes enforcement of the award on Russian territory (New York Convention, Article V(1)(e); ICA Law, Article 36(1)(6)).

There is no procedure to challenge a court ruling on recognition or enforcement after an arbitral award is annulled. Article 311(3) of the Commercial Procedure Code provides for a ’revision under new circumstances’ procedure that can be used before the court that rendered a ruling on the recognition or enforcement of an arbitral award that was subsequently annulled; however, since the list of new circumstances is closed and does not contain annulment of an arbitral award as a ground for revision, it is questionable whether Article 311(3)(1) of the Commercial Procedure Code can be used to annul an arbitral award.

The respective Russian court practice is scarce: in one case, the first instance court enforced an arbitral award that had been annulled at the seat of the arbitration (Case No. A27-781/2011), but the superior courts reversed this decision.

Since Russia is among the countries that literally implemented Article V(1)(e) of the New York Convention, an award that has been set aside may be recognised and enforced in exceptional cases if there are grounds for non-recognition of the judicial act setting it aside (Decision of the Amsterdam Court of Appeal of 28 April 2009 in Case No. 200.005.269/01). Moreover, since Article V(1)(e) of the New York Convention does not imply a mandatory prohibition to refuse recognition of arbitral awards that have been set aside at the seat of arbitration, the Russian court where a request for recognition or enforcement of a set-aside award is filed might enforce the arbitral award based on Article V(1)(e).

As to domestic arbitral awards, once the Russian court annuls a domestic arbitral award in full or in part, such award may not be enforced in full or in the respective part. From a practical perspective, given the level of scrutiny of domestic arbitral awards at the enforcement stage, the Russian court would be unlikely to annul a domestic arbitral award for which enforcement was already granted.

35. What is the procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction? If the extrajudicial and judicial documents are drafted in a language other than the official language of your jurisdiction, is it necessary to serve these documents together with a translation? When is a document considered to be served to the opposite party?

Russia

The procedure for service of judicial documents is set out in Articles 121 to 124 of the Commercial Procedure Code and Articles 113 to 120 of the Civil Procedure Code.

Parties may indicate to the court the address at which they are ready to receive judicial documents. By default, judicial documents are served at the address of registration of the legal entity. If that place is unknown, documents are sent to the last known place of residence. The due service to a legal entity is also recognised when the documentation is served to the representative authorised to receive the documentation.

Due service to individuals presumes that documents shall be handed personally to the individuals or to an adult living with that person.

The parties bear all risks of non-receipt of judicial documents when the documents have been sent to the proper address.

Russian law does not specifically regulate the service of extrajudicial documents.

Notification of the time and place of the hearing in arbitration proceedings is considered as due only if it is sent in such a way that each of the parties has a reasonable time to prepare for the hearing and to arrive at the place where the hearing is held.

36. What is the procedure for service of extrajudicial and judicial documents to a defendant outside your jurisdiction? Is it necessary to serve these documents together with a translation in the language of this jurisdiction? Is your jurisdiction a party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Hague Service Convention)? Is your jurisdiction a party to other treaties on the same subject matter? When is a document considered to be served to the opposite party?

Russia

Russian courts regularly serve judicial documents by a letter rogatory via the Ministry of Justice and the Ministry of Foreign Affairs if no other route is set out by an international treaty.

The Ruling of the Plenary Session of the Supreme Court No. 23 of 27 June 2017 provides for the following types of service of judicial documents:

• direct service to the party;
• direct service to the competent court of the relevant state;
• direct service to the central authority of the relevant state;
• service via the Ministry of Justice and the Ministry of Foreign Affairs to the competent body of the relevant state; and
• service via the central, territorial and other bodies of justice to the competent court or body of the relevant state.

All documents must be served with a translation into the official language of the relevant state.

37. Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction? Are there any databases or publicly available registers providing information on award debtors’ interests in other companies?

Russia

The tracing of debtors’ assets falls within the powers of the bailiffs in charge of arbitral award enforcement proceedings. The enforcing party may assist the bailiffs in this.

The following Russian registers may be helpful for the identification of a debtor’s assets on Russian territory:

• the Uniform State Register of Real Estate (e.g., real estate and rights on immovable property (leases and mortgages));
• the registers of the Federal Institute for Industrial Property (e.g., trademarks, patents and licences);
• the Uniform State Register of Legal Entities (e.g., group companies and subsidiaries); and
• the notary register of notifications on pledges of movable property.

There is no publicly available register providing information on award debtors’ interests in other companies.

38. Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

Russia

Russian law does not provide for a procedure for the disclosure of information about an award debtor’s assets.

39. What kinds of assets can be attached within your jurisdiction?

Russia

With some exceptions, all assets can be attached as a part of enforcement proceedings in Russia. Regarding individuals, Article 446 of the Civil Procedure Code sets out the property that is immune from attachment, including:

• the sole dwelling fit for the permanent residence of an individual and his or her dependants and the land plot where the dwelling is located, except when the objects are mortgaged;
• customary household goods, furniture and utensils;
• items for personal use (clothes and footwear), except jewellery and luxury items;
• items necessary for the professional activity of the debtor, except items with a value higher than 10,000 roubles;
• livestock and related household buildings not used for entrepreneurial activity;
• seeds for the next planting season;
• foodstuffs;
• money up to a total sum of not less than the fixed living wage of the insolvent individual and his or her dependants;
• fuel for household purposes;
• vehicles and other items required in connection with the debtor’s disability; and
• a debtor’s trophies, prizes and state awards.

Some kinds of assets (e.g., secret inventions and funds for professional associations) are fully exempted from attachment or may be attached only under certain conditions (e.g., pre-emption rights).

40. Are interim measures against assets available in your jurisdiction? Is it possible to apply for interim measures under an arbitral award before requesting recognition? Under what conditions?

Russia

Interim measures against assets are available in Russia (Civil Procedure Code, Article 139; Commercial Procedure Code, Article 90).

Interim measures are available at any stage of the proceedings by request of the creditor, who must prove that a failure to grant the interim measures may hinder the enforcement or make it impossible or that he or she will suffer significant damage in the absence of the interim measures.

There is a non-exhaustive list of interim measures (Civil Procedure Code, Article 140; Commercial Procedure Code, Article 91), which includes the following:

• imposition of an arrest on cash or other property owned by a respondent and held by the respondent or other persons;
• prohibition of a respondent and other persons from performing certain actions concerning the subject of the dispute;
• the imposition on a respondent of the obligation to perform certain actions to prevent damage to or deterioration of the condition of the disputed property;
• transfer of the property for storage to a claimant or another person;
• suspension of the enforcement under the executive or other document disputed by the claimant, the enforcement of which is carried out in an indisputable (without acceptance) procedure; and
• suspension of the sale of property in the event that a claim for the release of property from arrest has been filed.

The creditor may seek several interim measures or measures not included in the above list provided that the interim measures are proportionate to the amount of debt. In accordance with the request of the claimant or the respondent, one interim measure may be substituted by another.

41. What is the procedure to apply interim measures against assets in your jurisdiction?

Russia

The claimant files a motion for interim measures to the competent Russian court. The motion must contain:

• the name of the court with which the motion is filed;
• the names of the claimant and the respondent, their location or place of residence;
• the subject of the dispute;
• the amount of the property claims;
• justification of the reason for filing a motion for interim measures;
• the interim measure requested by the claimant; and
• the list of attached documents.

The Russian court considers the motion for interim measures within one day of the date on which the motion was submitted to the court ex parte. In practice, the one-day term is not always kept by the court.

The court issues a ruling regarding the grant or refusal of the interim measures that are subject to immediate enforcement. The ruling may be appealed. In practice, interim measures are rarely granted by the Russian courts.

42. What is the procedure for interim measures against immovable property within your jurisdiction?

Russia

Interim measures against immovable property in Russia are available under the general procedure for interim measures.

43. What is the procedure for interim measures against movable property within your jurisdiction?

Russia

Interim measures against movable property in Russia are available under the general procedure for interim measures.

44. What is the procedure for interim measures against intangible property within your jurisdiction?

Russia

Interim measures against intangible property in Russia are available under the general procedure for interim measures. In practice, the interim measures result in restrictions for assignment of registered intangible property addressed to the Patent and Trademark Office or for domain name assignments addressed to the relevant domain name registrar.

45. What is the procedure to attach assets in your jurisdiction? Who are the stakeholders in the process?

Russia

The procedure to attach assets is set out by the Law on Enforcement Proceedings No. 229-FZ of 2 October 2007 and the relevant provisions of the Civil Procedure Code and the Commercial Procedure Code.

Once the court ruling takes effect, the claimant files the motion on issuance of the writ of execution, except in circumstances when the court ruling may be enforced without the writ.

Based on the results of the respondent’s assets tracing, the claimant may file the writ as follows:

• with the Russian federal bailiffs’ service, which is the state authority in charge of attachments of assets of any kind in accordance with the procedure set out by the Law on Enforcement Proceedings;
• with the banks where the respondent has an account – the bank must transfer money from the respondent’s account within five days of the date of the claimant’s request. The claimant may file an enquiry with the Federal Tax Service to obtain information about the respondent’s accounts; or
• with the issuer of securities or professional participants of the securities market accounting rights on securities (if the respondent owns relevant securities).

Since it is impossible to file a writ of execution with several bodies simultaneously, the claimant selects the most efficient way to attach assets: for example, filing the writ of execution with the bank or with the professional participant of the securities market usually represents a more direct way to the funds.

The Federal Bailiffs Service allows all assets of a respondent to be secured and attached, which is more useful when the opponent owns various types of assets. The bailiffs are entitled to file requests with foreign authorities for attachment of a respondent’s assets located in a foreign state, provided that Russia has a relevant treaty signed with the state. The Federal Bailiffs Service has a very high workload, which may affect the speed of attachment proceedings.

46. What is the procedure for enforcement measures against immovable property within your jurisdiction?

Russia

Attachment against immovable property in Russia is available under the general procedure for attachment.

47. What is the procedure for enforcement measures against movable property within your jurisdiction?

Russia

Attachment against movable property in Russia is available under the general procedure for attachment.

48. What is the procedure for enforcement measures against intangible property within your jurisdiction?

Russia

Attachment against intangible property in Russia is available under the general procedure for attachment. Attachment of registered intangible assets such as patents or trademarks requires entry of the relevant record in the state registers.

49. Are there specific rules applicable to the attachment of assets held by banks? Is it possible to attach in your jurisdiction sums deposited in bank accounts opened in a branch or subsidiary of a foreign bank located in your jurisdiction or abroad? Is it possible to attach in your jurisdiction the bank accounts opened in a branch or subsidiary of a domestic bank located abroad?

Russia

Attachments against sums deposited in bank accounts or other assets held by banks in Russia are available when the relevant bank has a branch or subsidiary located in Russia. Regarding foreign banks that do not have branches or subsidiaries in Russia, Russian courts regularly refuse to attach assets that are located abroad, including sums deposited in bank accounts abroad.

50. May a creditor of an award rendered against a private debtor attach assets held by another person on the grounds of piercing the corporate veil or alter ego? What are the criteria, and how may a party demonstrate that they are met?

Russia

Russian law does not explicitly provide such an opportunity. Overall, the doctrine of piercing the corporate veil has not been fully developed in Russian law and mostly applies in insolvency proceedings.

51. Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

Russia

The recognition and enforcement of arbitral awards against foreign states is regulated by Law No. 297-FZ of 3 November 2015 on Jurisdictional Immunities of Foreign States and the Property of Foreign States in Russia (the Law on Immunities), which is largely based on the 2004 UN Convention on the Jurisdictional Immunities of States and Their Property. To date, Russia has not ratified this Convention.

The procedure for the recognition and enforcement of arbitral awards against foreign states is regulated by Chapter 33.1 of the Commercial Procedure Code and Chapter 45.1 of the Civil Procedure Code. The procedure of attachment of foreign states’ assets is regulated by Chapter 12.1 of the Law on Enforcement Proceedings.

52. What is the procedure for service of extrajudicial and judicial documents to a foreign state? Should they be served through diplomatic channels? Is it necessary to serve extrajudicial and judicial documents together with a translation in the language of the foreign state? When is a document considered to be served to a foreign state?

Russia

The procedure for service of judicial documents is set out by Article 256.6 of the Commercial Procedure Code and Article 417.6 of the Civil Procedure Code.

Service of judicial documents is executed in accordance with the relevant international treaty to which Russia is a party. In the absence of a treaty, service of judicial documents is carried out by the Russian Ministry of Justice, which must use diplomatic channels with the assistance of the Russian Ministry of Foreign Affairs.

Any notification of scheduling of a preliminary hearing or a main hearing must be served no later than six months before the date of the hearing.

A procedural order of the Russian Ministry of Justice requires that documentation be served with a translation in the language of the relevant state. All documents must be served with a translation into the official language of the relevant state.

Russian law does not specifically regulate the service of extrajudicial documents.

53. May a foreign state invoke sovereign immunity (immunity from jurisdiction) to object to the recognition or enforcement of arbitral awards?

Russia

Under Article 14 of the Law on Immunities, provided that a foreign sovereign state expressly agreed to the application of interim measures or otherwise indicated the property subject to the application of interim measures and further possible attachment, the relevant arbitral award creditors may apply for interim measures against assets owned by the foreign sovereign state.

54. May award creditors apply interim measures against assets owned by a sovereign state?

Russia

Under Article 16 of the Law on Immunities, certain types of assets of a foreign sovereign state are immune from enforcement. Under Article 15 of the Law on Immunities, immunity from enforcement may be lifted under the following circumstances:

• a foreign sovereign state directly agreed to attachment of assets by way of conclusion of an international treaty, other written agreement or a statement during proceedings in a Russian court;
• a foreign sovereign state reserved or otherwise indicated the property subject to attachment during enforcement; and
• assets are not connected with the exercise of sovereign powers of a foreign state.

The foreign state’s immunity from enforcement may be limited on the basis of the reciprocity principle.

55. Are assets belonging to a foreign state immune from enforcement in your jurisdiction? Which classes of assets belonging to states are immune from enforcement as a matter of principle? Are there exceptions to immunity? How can it be proven whether an asset is immune from enforcement? Provide practical examples of assets belonging to states that were successfully attached in your jurisdiction.

Russia

Article 6(2) of the Law on Immunities expressly reserves waiver of immunity from the jurisdiction of Russian courts and specifically provides that this does not include a waiver from interim awards or enforcement.

56. Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? What are the requirements of waiver?

Russia

The waiver of immunity from the jurisdiction of Russian courts is reserved in Article 6(2) of the Law on Immunities. The provision specifies that this does not include a waiver from interim awards or enforcement. Russian law does not provide for requirements to such a waiver.

57. Is it possible for a creditor of an award rendered against a foreign state to attach the assets held by an alter ego of the foreign state within your jurisdiction? What are the criteria, and how may a party demonstrate that they are met? Provide practical examples of assets held by alter egos that were successfully attached by a state’s creditor in your jurisdictions.

Russia

Russian law and court practice do not provide precise guidance on whether it is possible for a creditor of an arbitral award rendered against a foreign state to attach the assets held by an alter ego of the foreign state in Russia. Nevertheless, some legal scholars support the position that the alter ego doctrine may be applied in Russia.

With a certain degree of conditionality, the alter ego doctrine may be considered as being applied for the protection of assets owned by Russia. The Commercial Court of the Moscow District in its Ruling No. F05-366/2019 in Case No. A40-117326/2018 of 29 August 2019 annulled a court ruling on the recognition and enforcement of an arbitral award, having found that the foreclosed property belonged to a person whose ultimate beneficiary was Russia, and that enforcement of the arbitral award would therefore harm the budget of Russia.

58. May property belonging to persons subject to national or international sanctions be attached? Under what conditions? Is there a specific procedure?

Russia

There are no restrictions on attachment of property belonging to persons subject to national or international sanctions; regular procedure applies. However, according to Article 248.1 of the Commercial Procedure Code, sanctioned persons may apply for an injunction on initiating or continuing proceedings in a foreign court or international commercial arbitration tribunal located outside Russian territory, which might prevent the obtention of a relevant award.