International arbitration awards

⚖ The Arbitration Court of the Sverdlovsk Region denied the application for recognition and enforcement of a foreign arbitral award rendered under the SCC Rules, submitted by PESA Bydgoszcz against Uralmash.
JSC "Rail Transport Vehicles PESA Bydgoszcz" (the applicant) and JSC "Ural Transport Engineering Plant" (the interested party) concluded a supply contract (the Contract). The Contract included an arbitration clause providing for dispute resolution under the SCC Rules.
Under the Contract, the applicant delivered tram cars to the interested party but did not receive payment for them.
Consequently, the applicant filed a claim with international arbitration under the SCC Rules. The arbitral tribunal upheld the applicant's claims and awarded monetary compensation from the interested party.
The applicant then filed a motion with the Arbitration Court of the Sverdlovsk Region to recognize and enforce the foreign arbitral award in Russia.
The applicant stated that the interested party had fully participated in the arbitration and had access to qualified legal assistance.
However, the court found no grounds for granting the application and stated the following:
🔹 The interested party is subject to sanctions, which, according to the court, raises doubts about the fairness of "judicial proceedings" in a foreign jurisdiction and the "impartiality of the court." The interested party had also previously expressed disagreement with foreign arbitration in a Russian court;
🔸 The interested party is a significant Russian company classified as a strategic enterprise. According to the position of the Supreme Court of the Russian Federation, courts must consider the public importance of a Russian company and the risk of financial instability. Enforcement of an SCC arbitral award may harm a major Russian industrial enterprise, thereby violating Russia’s public interest;
🔹 The court held that the interested party’s failure to fulfill its contractual obligations was due to sanctions imposed by foreign states on Russia and was not within the interested party's control;
🔸 The interested party had reasonable doubts about the impartiality of two appointed foreign arbitrators, and even filed a challenge against one of them. However, the challenge was allegedly dismissed in an improper procedural manner.
Thus, the Arbitration Court of the Sverdlovsk Region refused to recognize and enforce the foreign arbitral award submitted by the foreign company.

⚖ The Arbitration Court of the City of Moscow terminated proceedings in a case seeking to set aside an arbitral award due to its finality.
LLC "TEK Energetika" (the applicant) and JSC "SCC" (the interested party) concluded a contract for the performance of work (the Contract). The Contract included an arbitration clause providing for dispute resolution in a tribunal administered by the RAC at RISA.
The interested party filed a claim with the arbitral tribunal seeking penalties from the applicant for delays in performance. The arbitral tribunal upheld the claim in full.
The applicant argued that the arbitral tribunal violated Russia’s public policy, failed to consider the factual circumstances of the case, and misapplied civil law. On this basis, the applicant filed a motion with the Arbitration Court of the City of Moscow to set aside the arbitral award.
The court analyzed the case materials and stated that where an arbitration clause includes a provision on the finality of the arbitral award, a state court must terminate proceedings aimed at setting aside such an award.
In this case, the arbitration clause expressly stated that the award would be final. As the state court noted, this bars any attempts to challenge the award.
The court also concluded that the applicant’s reference to a violation of public policy essentially reflected its disagreement with the tribunal’s conclusions, which is not a valid reason to set aside an arbitral award.
Accordingly, the Arbitration Court of the City of Moscow terminated the proceedings to set aside the arbitral award.

⚖ The Arbitration Court of the Irkutsk Region annulled the decision of the ICAC arbitrator at the RF CCI due to improper notification of the interested party about the arbitration proceedings.
OGAU “CSN” (the applicant) and LLC NPRF “Tradition” (the interested party) entered into a contract for the correction of project documentation (Contract). The Contract included an arbitration clause for disputes to be resolved by a sole arbitrator at the ICAC at the RF CCI.
The applicant filed a claim with the arbitral tribunal for penalties and damages, citing the interested party's improper performance.
The arbitrator ruled in favor of the applicant.
The applicant then applied to the Arbitration Court of the Irkutsk Region for a writ of enforcement of the arbitral award.
The interested party filed a request to annul the award, arguing they were not properly informed about the time and place of arbitration, violating their right to defense and the principle of adversarial proceedings.
The applicant countered, stating they had repeatedly sent notifications by registered mail and that the interested party had not objected to the claims on the merits.
The court noted the following:
🔹 The interested party was absent from the arbitral hearing. All mail was undelivered. No attempts were made to deliver the notifications personally.
🔸 According to the post office, the mail carrier responsible for the address was on maternity leave.
🔹 The court stated the applicant could have ensured proper notification, especially since the interested party participated in meetings about work acceptance.
Thus, the Arbitration Court of the Irkutsk Region ruled the interested party was not properly notified and annulled the ICAC arbitrator’s decision.

The CPR developed and released Guidelines on Arbitrator Disclosure.
Arbitrators must uphold high standards of independence and impartiality, disclosing any potential conflicts of interest. However, no unified rules for disclosure existed for a long time.
In response, CPR created a task force to develop these Guidelines to help arbitrators apply disclosure requirements in practice.
The Guidelines recommend:
🔹 Before appointment, arbitrators should be informed of key arbitration details, including party names, a dispute summary, governing law, and arbitration seat. They should also be informed of legal representatives and any potentially interested parties (e.g., witnesses or funders).
🔸 Arbitrators should maintain a record of information necessary for conflict checks. This database should cover the last five years of arbitrations in which they participated.
🔹 The duty to disclose continues throughout the arbitration.
🔸 Arbitrators from law firms should consider potential conflicts involving colleagues.
The Guidelines are not binding rules but are designed to assist arbitrators in meeting existing standards of independence and impartiality.

UAE and Abu Dhabi courts addressed the impact of the dissolution of DIFC-LCIA on arbitration clauses and their enforceability.
Decree No. 34 of 2021 dissolved the joint venture between the Dubai International Financial Centre and the London Court of International Arbitration (DIFC-LCIA), affecting arbitration practice in the UAE. Recent Abu Dhabi rulings (Cases No. 1046/2023 and No. 449/2024) confirmed that arbitration agreements referring to DIFC-LCIA remain valid.
Following DIFC-LCIA's closure, its functions were transferred to the Dubai International Arbitration Centre (DIAC). This created uncertainty regarding agreements mentioning DIFC-LCIA. Courts in the US and Singapore had previously declined to enforce such agreements, citing the closure of the original institution.
The UAE courts held that the closure of an arbitral institution does not invalidate arbitration agreements, provided the parties still intended to arbitrate. They cited the Paris Court of Appeal's recognition of institutional succession in similar cases.
Abu Dhabi courts confirmed the validity of DIFC-LCIA arbitration clauses but did not require arbitration under DIAC rules, which creates uncertainty in enforceability.

Results of the IBA Annual Conference in Mexico
The IBA (International Bar Association) Annual Conference concluded on September 20 in Mexico. As always, it was a major event attended by over 5,000 delegates, including partners of major law firms, top judges, and key policymakers.
A contributor to the “International Arbitration” Telegram channel attended the conference and shared impressions.
The conference focused on the legal community’s challenges and how to address them. Many panels featured speakers with opposing views on critical issues.
Debates included:
🔹 The role of artificial intelligence in legal practice and dispute resolution;
🔸 How to ensure access to justice and the rule of law in underserved regions;
🔹 The impact of climate change and other social and economic disruptions on dispute resolution;
🔸 The effect of sanctions on the legal profession and the global future of law amid today’s conflicts;
🔹 And many more topics.
Legal tech companies such as Lexis Nexis, Wolters Kluwer, Harvey, and Jus Mundi showcased solutions to simplify legal work.
The event was also significant for the Latin American legal market, which rarely hosts such global events.
The festive atmosphere in Mexico City added to the success, with the conference coinciding with Independence Day celebrations.
The next IBA Conference will take place in Toronto from November 2–7, 2025. Law firms can already apply to become partners for this prestigious event.

⚖ The Berlin Higher Regional Court (Kammergericht) notified a Russian party about proceedings via online publication and recognized arbitration as an acceptable forum.
A dispute arose between Siemens AG and Russian Railways (RZD) after Siemens unilaterally terminated a train service contract due to sanctions. The contract, governed by German law, included an arbitration clause referring disputes to the Vienna International Arbitral Centre (VIAC), seat in Vienna.
On May 12, 2022, RZD filed in the Moscow Arbitration Court to prohibit Siemens from initiating arbitration based on Article 248.2 of the Russian APC. As a sanctioned entity, RZD argued that Russian courts had exclusive jurisdiction under Article 248.1. The Moscow court granted the anti-suit injunction on August 24, 2022.
On June 3, 2022, Siemens filed with the Munich Higher Regional Court to confirm the admissibility of arbitration. The case was transferred to the Berlin court. On October 18, 2022, the Berlin court sent a judicial request to the Russian Ministry of Justice under the 1965 Hague Convention on Service Abroad.
The request was passed to the Moscow court, which refused service on February 2, 2023, citing a threat to Russian public order.
Since personal service failed, the Berlin court issued a public notice via its online system. Under Section 188 of the German Code of Civil Procedure, the documents were deemed served one month later.
On June 1, 2023, the Berlin Higher Regional Court issued its final ruling:
🔹 Section 1032(2) of the German CPC grants jurisdiction over the admissibility of foreign arbitration;
🔸 The impact of Russian proceedings on Siemens' financial status in Germany established jurisdiction;
🔹 Since personal service failed, online publication under Section 185(3) was valid;
🔸 The arbitration clause was not shown to be unenforceable; questions of Russian exclusive jurisdiction should be resolved in arbitration;
🔹 Sanctions should not prevent access to arbitration.
Thus, the Berlin court upheld arbitration as a valid forum, barring enforcement of Russian court decisions on this dispute in Germany.

⚖ The Moscow Arbitration Court granted an application for recognition and enforcement of an award rendered with the seat of arbitration in Stockholm.
The Russian company from the Republic of Tatarstan, LLC "GELON" (the applicant), filed an application with the Moscow Arbitration Court for recognition and enforcement in Russia of a foreign arbitral award dated September 16, 2020, against the national carrier of Tajikistan, OJSC "Tajik Air" (the interested party). The seat of arbitration was Stockholm, Sweden. The arbitral tribunal awarded the applicant an advance payment of USD 286,000, a penalty of USD 181,038, arbitration costs of EUR 36,365.64, and RUB 597,630.29 as legal fees.
Notably, at the time of the application to the Moscow Arbitration Court, the foreign arbitral award had already been recognized and enforced in Tajikistan: on February 3, 2021, the Economic Court of Dushanbe granted GELON’s application, and on April 2, 2021, a writ of execution was issued for enforcement.
Nevertheless, the applicant also filed for recognition and enforcement with the Moscow Arbitration Court, citing Article 242 of the Russian Commercial Procedure Code, which allows such applications based on the location of the debtor's property, and presented the following grounds:
🔸 the interested party owns property in Moscow;
🔹 other enforcement proceedings are already ongoing in Russia against the interested party;
🔸 the respondent is registered with the Russian tax authorities, as confirmed by an extract from the Unified State Register of Taxpayers.
The Moscow Arbitration Court confirmed that the application complied with Russian legislation and international treaties. The court referred to the 1958 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and, possibly as a precaution, to the 1993 Minsk Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters.
Thus, the court issued a ruling recognizing and enforcing the foreign arbitral award in favor of the Russian company.

On October 10–11, 2024, the annual Balkan Arbitration Conference (BAC) took place. This year, it was held at the Hilton Hotel in Podgorica, the capital of Montenegro.
This was the fourth edition of the conference. Every year, leading international arbitration experts from around the world participate. Previous speakers have included Gary Born and Stavros Brekoulakis. The conference focuses on key practical issues in international commercial and investment arbitration, third-party funding, and panels with a particular emphasis on arbitration in the Balkan region.
This year, one of the editors of the "International Arbitration" channel participated in the panel on third-party arbitration funding. Here are their impressions:
The conference was dynamic and diverse, both in terms of topics and attendees. Participants included scholars, arbitration centers, consultants, in-house counsel, asset tracing firms, funding platforms, and arbitrators from across Europe, the Balkans in particular, the UK, and the US.
Key topics discussed included:
🔸 corruption and arbitration — particularly whether arbitrators should address corruption issues in arbitration, and a recent investment arbitration case against Nigeria, where the award was set aside due to procedural violations and forged evidence;
🔹 third-party funding — including regulatory issues, application of funding in sanctions contexts, and practical considerations for investors and businesses in seeking funding;
🔸 trends in investment arbitration in the Balkans, and disputes in the energy sector arising from environmental and climate-related changes.

⚖ The Nizhny Novgorod Region Arbitration Court executed a request from the Court of Appeal of Tehran Province.
On September 9, 2024, the Nizhny Novgorod Region Arbitration Court received a request from Division No. 30 of the Court of Appeal of Tehran Province (Iran) to carry out procedural actions – specifically, to verify the authenticity of documents in the presence of a representative of JSC “Volga.”
The request concerned the authenticity of documents such as an invoice, reconciliation act, invoice-factura, and a contract. By a ruling dated September 12, 2024, the court notified JSC “Volga” of the need to appear at a court session.
The representative of JSC “Volga” appeared in court and confirmed the authenticity of all documents except the invoice, which was signed and stamped by the company.
Based on Articles 74 and 256 of the Russian Commercial Procedure Code and the Treaty between Russia and Iran on Legal Assistance and Legal Relations in Civil and Criminal Matters dated March 5, 1996, the court executed the request and closed the proceedings. All necessary documents and protocols were sent to the Tehran Court of Appeal.

The Moscow District Arbitration Court ruled that, under Belarusian law, the term “arbitration court” in the contract clearly indicated the parties’ intent to refer disputes to arbitration.
Joint LLC “Gravitekh” (applicant) and LLC “Twinset” (interested party) signed a supply contract on June 18, 2021. According to the arbitration clause, if disputes could not be resolved through negotiations, they were to be referred to the “arbitration court at the claimant’s location.” The contract also permitted the application of Russian and Belarusian law for matters not covered by the agreement.
A dispute arose due to the improper performance of contractual obligations. The applicant sent a notice to the interested party and warned of their intent to refer the case to the International Arbitration Court at the Belarusian Chamber of Commerce and Industry (IAC at BCCI) in case of no response. The interested party ignored the notice, and the applicant proceeded to arbitration.
The IAC tribunal rendered an award on May 30, 2024, ordering the interested party to pay RUB 490,253.11 in debt, RUB 886,468.12 in penalties, and EUR 1,390.87 in arbitration fees.
The award was not voluntarily complied with.
The applicant applied to the Moscow Arbitration Court for recognition and enforcement of the award. The court denied the application on the following grounds:
🔷 The parties' relationship was governed by Russian and Belarusian law. The interested party was registered in Russia. In Russia, the term “arbitration court” typically refers to state courts;
🔷 The arbitration clause did not clearly identify the seat or the arbitral institution, making the clause vague and unenforceable.
The applicant appealed to the Moscow District Arbitration Court. The cassation court disagreed with the lower court and ruled as follows:
🔷 In Belarus, the term “arbitration court” refers solely to private arbitral tribunals, including the IAC at BCCI;
🔷 The Moscow court failed to consider that during the arbitration proceedings, the interested party did not raise objections to the tribunal’s jurisdiction;
🔷 The applicant made a genuine effort to resolve the dispute by sending a notice that was ignored;
🔷 Both Russia and Belarus are parties to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Under Article III, Russia is obliged to recognize and enforce foreign arbitral awards under national procedural rules without imposing substantially more burdensome conditions than for domestic awards.
As a result, the Moscow District Arbitration Court overturned the lower court’s decision of July 5, 2024, and remanded the case for reconsideration.

⚖ The Arbitration Court of St. Petersburg and Leningrad Region granted an application for recognition and enforcement of a Stuttgart Regional Court decision regarding debt collection and interest from a Russian entity, guided by principles of international law
On May 27, 2021, the Stuttgart Regional Court satisfied the claims of Viavi Solution Deutschland GmbH (Germany) (applicant) against LLC "Vilkom SPB" (Russia) (interested party) for debt collection and interest in foreign currency.
More than 3 years later, the applicant applied to the Arbitration Court of St. Petersburg and Leningrad Region with an application to the interested party for recognition and enforcement of the Stuttgart Regional Court decision.
The interested party objected to granting the application, citing the following arguments:
🔸 the applicant did not send notification to the interested party in advance;
🔹 Germany introduced restrictive measures based on political motives.
According to the interested party, this indicated that the Stuttgart Regional Court decision contradicted the public policy of Russia.
The court hearing was held in the absence of the parties. The Arbitration Court of St. Petersburg and Leningrad Region established that the applicant had the right to file this application based on Articles 241, 242 of the Arbitration Procedure Code of the Russian Federation. Notably, when considering the case, the court was guided by the principle of international comity. The court noted that this principle prescribes treating the foreign legal order "politely and courteously." In addition, the court mentioned the principle of reciprocity, the essence of which, according to the court, is the application of foreign law for the purpose of developing cooperation between states. The court referred to Part 4 of Article 15 of the Russian Constitution, according to which generally recognized principles of international law are an integral part of the Russian legal system.
Rejecting the arguments of the interested party, the court indicated the following:
🔸 the case materials contained confirmation of advance notification;
🔹 public policy was not violated.
Thus, the Russian court granted the application for recognition and enforcement of the foreign court decision.

The Federal Supreme Court of Switzerland indicated that when assessing the impartiality of an arbitrator, statements made after the issuance of an arbitral award are not taken into account
Crescent Petroleum Co. International Ltd. (Crescent) and the National Iranian Oil Company (NIOC) entered into a long-term gas supply contract in 2001. In the late 2000s, a dispute arose regarding NIOC's alleged non-fulfillment of its obligations. In 2009, Crescent initiated arbitration under the International Chamber of Commerce (ICC) rules. In 2018, the company initiated a second arbitration under the same rules for the amount of 18.6 billion US dollars.
In the second arbitration, a panel of arbitrators chaired by Laurent Lévy and including arbitrators Charles Poncet and Klaus M. Sachs issued an interim award in favor of Crescent in May 2020. Subsequently, beginning in late 2022, NIOC filed a series of applications, including challenges to Laurent Lévy (March 2023) and Charles Poncet (November 2023) at the ICC, citing alleged conflicts of interest, incomplete disclosure, and bias. One of the discussed grounds for challenge was Charles Poncet's provocative comments made on Swiss television, where he spoke about men of Islamic faith who support women wearing burkinis for swimming in public places in Switzerland. However, he made this statement more than three years after the interim award was issued.
The ICC upheld both challenges in 2023, after which NIOC applied to the Federal Supreme Court of Switzerland (court) for a review of the interim award. On June 11, 2024, the court issued two decisions No. 4A_288/2023 and No. 4A_572/2023 on the dispute between Crescent and NIOC, rejecting NIOC's applications for review based on, among other things, the following conclusions:
🔹 Grounds for challenging an arbitrator must exist at the time the arbitral award is rendered. This conclusion follows from the rule that a party filing a challenge should have exercised due diligence, both during the formation of the arbitral tribunal and throughout the arbitration proceedings. Due diligence implies that the party should have taken all necessary measures to identify grounds for challenge within the arbitration proceedings in accordance with the 90-day period from the discovery of grounds for review established by Art. 190a (2) of the Swiss Federal Act on International Private Law. Consequently, for an application for review of an arbitral award on the basis of challenging an arbitrator to be satisfied, the relevant grounds must have existed at the time the decision was made, not after it;
🔸 Comments made by an arbitrator after the award was rendered do not automatically indicate that they were biased earlier. Referring to the International Bar Association Guidelines on Conflicts of Interest in International Arbitration, the court concluded that an arbitrator's duty to maintain independence and impartiality ceases after the arbitral award is rendered. After this, the arbitral tribunal acquires the status of functus officio (i.e., has fulfilled its function and no longer has authority) and, consequently, subsequent actions or statements by an arbitrator are not automatic confirmation of bias during the consideration of the case.
Thus, the court concluded that proving an arbitrator's bias based on statements made after the issuance of an arbitral award is extremely difficult. For a successful review of an arbitral award based on such statements, it is necessary that the grounds for challenge existed at the time the award was rendered.

⚖ The Arbitration Court of the Orenburg Region refused the Supreme Court of Uzbekistan's request to enforce an Uzbek court decision in the Russian Federation due to improper notification of the Russian party
On January 22, 2024, the decision of the Economic Court of the Khorezm Region of the Republic of Uzbekistan dated December 20, 2023, in case No. 4-22-2304/34, on the claim of the Khorezm Regional Department of the Chamber of Commerce and Industry of Uzbekistan in the interests of the limited liability company "Murod Maqsad" against individual entrepreneur Vakhidbek Azimbaevich Yakubov (interested party) came into force. According to this decision, the court awarded in favor of the company the principal debt in the amount of 1,645,655 rubles and penalties in the amount of 822,827 rubles, as well as court fees.
Under the CIS Agreement of March 20, 1992, "On the Procedure for Resolving Disputes Related to Economic Activities" (Kyiv Agreement), on March 5, 2024, the Supreme Court of the Republic of Uzbekistan applied to the Arbitration Court of the Orenburg Region with an application for recognition and enforcement of the Khorezm Regional Court's decision in the Russian Federation.
The Arbitration Court of the Orenburg Region made a request to the Ministry of Internal Affairs of Russia for the Orenburg Region and established that the interested party (debtor) is a resident of the Russian Federation.
During the court proceedings, the Arbitration Court of the Orenburg Region established that the interested party was not timely and properly notified of the court process in Uzbekistan. Meanwhile, the applicant provided a screenshot from a website with information about the ID for tracking postal items and a screenshot from the Telegram messenger as proof of notification to the interested party.
The Arbitration Court of the Orenburg Region noted that "notices of court proceedings sent in violation of the norms of an international treaty of the Russian Federation, which provide state guarantees for the protection of persons under its jurisdiction on its territory, cannot be considered proper."
The Russian court indicated that improper notification restricts the right of the interested party to a fair trial, which contradicts the principles of adversarial proceedings and equality of parties enshrined in Russian law. According to the Russian court, recognition and enforcement in the Russian Federation of the Khorezm Regional Court's decision "contradicts both the public policy of the Russian Federation and the norms of international law and the legislation of the Russian Federation."
Thus, the Arbitration Court of the Orenburg Region refused to satisfy the application for recognition and enforcement of the Khorezm Regional Court's decision in the Russian Federation.

⚖ The Arbitration Court of the Kursk Region left without consideration the lawsuit of a Polish company that tried to bypass the arbitration clause by referring to sanctions
In 2020, the company "RIELA Polska Sp. z o. o." (Poland) (plaintiff) and LLC "Kurskagroterminаl" (Russia) (defendant) concluded two contracts for the supply of equipment for its implementation in Russia. The execution of the contracts involves several stages: design, manufacturing (production), delivery, and supervision of installation.
Clause 17 of each contract contains an arbitration clause referring disputes to the London Court of International Arbitration (LCIA) with the application of English law, the place of arbitration in London, and the requirement for the case to be considered by three arbitrators.
Based on the plaintiff's statement, as of April 18, 2024, the defendant owed 1,365,743.84 US dollars and 95,688.28 US dollars in interest under the first contract, and 800,749.17 euros and 37,405.74 euros in interest under the second contract. Referring to these debts, the plaintiff applied to the Arbitration Court of the Kursk Region.
The defendant filed a petition with the court to leave the lawsuit without consideration, demanding that the claim be rejected based on the following circumstances:
🔹 according to clause 17 of each supply contract, the dispute should be considered by the LCIA;
🔸 the design and production of equipment was carried out in the EU territory, and only the supervision of installation was to be performed in Russia;
🔹 in accordance with the terms of the contract, the equipment must comply with EU quality standards and be designed by the plaintiff in the EU territory;
🔸 the parties did not sign an additional agreement to amend clause 17 of the contracts, nor did they conclude any other separate agreement to change the jurisdiction and applicable law (prorogation agreement);
🔹 the defendant doubts that the plaintiff properly fulfilled its obligations for the design and manufacture of equipment, as these obligations are not related to the territory of the Russian Federation.
Objecting to the lawsuit being left without consideration, the plaintiff presented the following arguments:
🔹 the fulfillment of obligations under the contracts took place exclusively in the Russian Federation. In particular, quality control of the delivered equipment, as well as the supervision of installation, took place in Russia;
🔸 sanctions imposed by the United Kingdom against Russian persons limit the defendant's access to justice in LCIA arbitration. Consideration of the stated claim in the Russian Federation to a greater extent ensures the procedural rights of the defendant and ensures the implementation of its fundamental right of access to justice.
After considering the arguments of the parties, the court supported the defendant's position and made the following conclusions:
🔹 the execution of the contracts took place predominantly not in the Russian Federation. Design and manufacturing (production) were carried out in the EU territory, delivery of equipment was along the route "EU - Russian Federation," and only the supervision of installation of the equipment was carried out in the Russian Federation;
🔸 there are no obstacles regarding the possibility of Russian companies' access to justice. On October 17, 2022, the Office of Financial Sanctions Implementation (OFSI) of the UK Treasury issued a license to the LCIA, which allows it to accept payments from persons from Russia and Belarus.
🔹 the execution of the contracts took place "before the introduction of a significant number of restrictive measures." The contracts were concluded in 2020. According to the court, at that time, restrictive measures against residents of the Russian Federation had already been in effect, introduced since 2014.
Thus, the court decided to leave the plaintiff's lawsuit without consideration.

The English court supported arbitration and recognized the possibility of continuing arbitration proceedings in a case where the plaintiff had not fully complied with the pre-trial dispute resolution procedure established by the contract.
We remind you that in Russia, in some cases, courts have refused to enforce arbitral awards if the pre-trial procedure was not followed. Therefore, it is still worth complying with such a pre-trial procedure.

The Supreme Court upheld the annulment of the ICAC at the Chamber of Commerce and Industry decision issued in favor of the Finnish wagon manufacturer Skoda Transtech in a "sanctions" dispute with an RZD subsidiary
The dispute arose from a 2012 contract, under which the Finnish company was obligated to supply JSC "Railtransavto" with 898 wagons for transporting automobiles for 70 million euros. At the same time, "Railtransavto" was supposed to transfer 898 car kits to the manufacturer for installation on the wagons.
The Russian company did not fulfill its obligations, in connection with which the International Commercial Arbitration Court at the Chamber of Commerce and Industry of Russia awarded Skoda Transtech >3.7 million euros in damages.
The RZD subsidiary applied to the state court to annul the arbitral award. Arbitration courts of two instances supported it, establishing that the breach of obligations occurred due to EU sanctions imposed against "Railtransavto." The import of car kits from Russia and their return were restricted due to their dual use, as car kits can also be used for military purposes.
The Supreme Court has now also rejected Skoda Transtech's cassation appeal. Skoda Transtech is the only manufacturer of trams and wagons in the Scandinavian countries and Finland, owned by the Czech company Škoda Transportation.
JSC "Railtransavto" (51% owned by RZD, 49% by "TransGroup AS") is the largest owner of car-carrier wagons in Russia.

⚡ The Arbitration Court of Smolensk Region recognized and enforced the decision of a sole arbitrator of the ICAC under the Ukrainian CCI, which obligated LLC "Techno Plus" to supply four half-wagons to Private Joint Stock Company "Ivano-Frankivskcement" for a total amount of 1,948,000 rubles.
The court indicated that the arbitration decision does not affect the rights of third parties, as it does not specify specific property with wagon identification, but only provides for the obligation to supply half-wagons for a total cost of 1,948,000 rubles. The court also noted that no information about the questionable nature of the transaction with a foreign entity was presented.
Case number A62-7645/2020

⚖ The Arbitration Court of the Central District refused to recognize and enforce foreign judicial acts, considering that enforcement is impossible in Russia and has already occurred abroad
A corporate dispute arose between the participants of LLC "Simferopol Motor Transport Enterprise No. 14329" (the company) related to challenging the decision of general meetings and a share transfer agreement in the company's authorized capital. The Economic Court of Kyiv on 25.03.2019 and the resolution of the Northern Commercial Court of Ukraine on 16.09.2020 declared these agreement and decision invalid.
V.E. Kuntsov (applicant) applied to the Arbitration Court of the Republic of Crimea to recognize and enforce these judicial acts. The court of first instance refused to satisfy the application in full. Subsequently, the applicant appealed the ruling to the Arbitration Court of the Central District.
The cassation court, agreeing with the first instance court's position, pointed out the following circumstances:
🔸 At the time of signing the share transfer agreement, the applicant was a citizen of Ukraine, as were other participants of the company;
🔹 According to the company's charter and the Ukrainian Unified State Register of Legal Entities, Individuals, Entrepreneurs and Public Formations, the company is registered in Ukraine, with Kyiv specified as the company's location;
🔸 After the inclusion of the Republic of Crimea and Sevastopol in Russia, the company did not bring its constituent documents in line with Russian legislation as per Article 19 of the Federal Law No. 52 "On the Introduction of the First Part of the Civil Code of the Russian Federation" by March 1, 2015. There are no details about the company in the Russian Unified State Register of Legal Entities. Moreover, the company does not conduct economic activity in Russia as a foreign enterprise branch;
🔹 The applicant did not provide evidence of the possibility of recognizing and enforcing foreign judicial acts in Russia;
🔸 The applicant did not substantiate why the judicial acts cannot be executed in Ukraine. Moreover, according to the circumstances of another case considered by a Russian court, the company participants' rights in the corporate dispute were already restored by an order of the Ministry of Justice of Ukraine to cancel registration actions;
🔹 Current Russian legislation does not provide a judicial procedure for recognizing decisions of foreign courts and foreign arbitration decisions that do not require enforcement.
Thus, the cassation court supported the first instance court's position, refusing to recognize and enforce foreign court acts.

📖 Published third edition of the textbook "International Commercial Arbitration" under the scientific editorship of O.Yu. Skvortsov, M.Yu. Savranski, and G.V. Sevastyanov
Recently, a new third edition of the leading Russian textbook in the field of international arbitration, dedicated to Professor V.A. Musin, became available for order (published by ANO "Editorial Board of the 'Arbitration Court' Journal").
Traditionally, the massive publication (over a thousand pages 📚) was authored by well-known Russian and foreign researchers and practicing specialists in international arbitration: A.V. Asoskov, Yu.A. Babichev, A.V. Grebelsky, A.G. Dudko, G.K. Zhukova, A.V. Zamazy, A.D. Zelenin, R.O. Zykov, A.S. Komarov, M.A. Kulkov, A.S. Maltsev, I.V. Nikiforov, A.A. Panov, E.S. Rashchevsky, V.V. Khvaley, V.V. Yarkov and other equally famous specialists.
The textbook is widely used in Russian higher education institutions and has been highly recommended among Russian lawyers practicing in international arbitration. The textbook covers both basic theoretical topics in arbitration and deeper practical aspects of international arbitration, such as issues of res judicata and prejudice in international arbitration, third-party arbitration financing, application of information technologies during arbitration proceedings, and many others.

⚖ The Moscow Arbitration Court satisfied the application for permission to enforce the decision of the Economic Court of the Gomel Region of the Republic of Belarus regarding a citizen of the Republic of Belarus permanently residing in Russia
According to the decision of the Economic Court of the Gomel Region of the Republic of Belarus from 01.10.2013, 714 denominated Belarusian rubles were recovered from Viktor Semenovich Bolonnikov in favor of the Inspection of the Ministry of Taxes and Fees of the Republic of Belarus for the Central District of Gomel. This amount was recovered from the person in the order of subsidiary liability for the obligations of the additional liability company "Belresurspartner". When considering the case, the Belarusian court proceeded from the fact that both parties to the dispute have a location and place of residence in the Republic of Belarus.
Based on the decision of the Belarusian court, a judicial order (analog of an execution sheet in Russia) was issued. However, the Enforcement Department of the Railway District of Gomel, Republic of Belarus, returned the order to the claimant, since it was discovered during the process of its execution that V.S. Bolonnikov resides in Russia. This follows from the department's reference dated 04.07.2024.
Given that the court decision cannot be actually executed in the Republic of Belarus, the Inspection of the Ministry of Taxes and Fees of the Republic of Belarus applied to the Moscow Arbitration Court with a request to permit the enforcement of the specified foreign judicial decision in the territory of Russia under the Agreement on the Procedure for Resolving Disputes Related to Economic Activities of 1992 (Kyiv Agreement).
The court established that the claimant's application for recognition and enforcement of a foreign court decision, including permission for enforcement of a court decision of a CIS member state, can be filed in a Russian arbitration court competent to consider such an application, subject to one of the following conditions confirming the connection of the debtor (individual or legal entity) with the place of executing the foreign court decision located in Russia:
🔹 The debtor has a permanent place of residence or location in the Russian Federation;
🔸 The debtor or its branch (representative) conducts trade, entrepreneurial, and other economic activities in the territory of Russia;
🔹 The debtor has property, bank accounts in the territory of Russia.
The court sent requests to competent authorities (Federal Tax Service of Russia, Rosreestr, Ministry of Internal Affairs of Russia) about the existence of the debtor's temporary or permanent residence in Russia, bank accounts in Russian banks, property in the territory of Russia, including real estate or vehicles. The Federal Tax Service of Russia informed the court that the debtor permanently resides in Moscow, Russia.
Taking into account the information received from the Federal Tax Service, the Moscow Arbitration Court recognized itself as competent to consider the application of the Inspection of the Ministry of Taxes and Fees of the Republic of Belarus. Based on the results of the application review, the court considered that the application should be satisfied, as there are no grounds for refusal.

⚖️ The High Court of England and Wales rejected the application to declare a Saudi Arabian prince bankrupt due to lack of jurisdiction
In 2010, the Kuwaiti telecommunications company Mobile Telecommunications Company (creditor) and Prince Hussam ibn Saud Al Saud (debtor) entered into a loan agreement. A number of disputes arose from this contract. As a result of arbitration proceedings conducted in 2015 and 2018 in accordance with the 1998 London International Arbitration Court Regulations, arbitrators recovered more than 700 million pounds sterling from the debtor in favor of the creditor. From 11.09.2017, a commission of more than 90 thousand pounds sterling was added daily to this amount.
On 01.06.2022, the creditor applied to the High Court of England and Wales with an application to declare the debtor bankrupt under English law. The debtor asked the court to reject the application, referring to the lack of jurisdiction.
The High Court of England and Wales indicated, in particular, the following:
🔶 According to Article 265 of the UK Insolvency Act 1986, the court may consider an application to declare a person bankrupt, in particular, if at some point during the last three years ending on the day of filing the application, the person had resident status or permanently resided in the territory of England and Wales;
🔷 The debtor has not been a resident of England and Wales since 1990;
🔶 The mansion was purchased by the debtor's family when the debtor was a minor, and he did not have keys or control over this mansion;
🔷 There are no personal belongings of the debtor on the territory of the mansion, accordingly, the debtor does not reside there;
🔶 During his visits to England and Wales, the debtor did not conduct entrepreneurial activities in this territory.
Thus, the High Court of England and Wales recognized the absence of its jurisdiction and rejected the creditor's application to declare the debtor bankrupt.

LCIA published a new arbitration expenses report for a record-breaking period of time among all arbitration institutions
The London International Court of Arbitration (LCIA) presented its third report analyzing arbitration costs and proceedings duration, covering the period from January 1, 2017, to May 12, 2024 (2024 Report). The 2024 Report is based on a comparison of statistical data with previous reports from 2015 and 2017.
In the new report, among other things, the following key points are indicated:
🔸 The median duration of arbitration proceedings is 20 months, which is four months longer compared to the previous 2017 report;
🔹 There is an increase in proceedings duration with an increase in claim amount, primarily caused by process complexity and delays in document submission by parties;
🔸 The median cost in LCIA arbitration is $117,653, which is higher than in the previous report ($97,000), however, it is noted that considering inflation, the actual cost increase is minimal;
🔹 LCIA maintains a trend of low arbitration costs compared to other arbitration institutions, especially in large disputes, as LCIA uses an hourly payment system (while other institutions mainly calculate costs based on the dispute amount);
🔸 The COVID-19 pandemic temporarily increased proceedings duration, as many cases were postponed, but thanks to the introduction of online sessions, the pandemic's impact on dispute consideration duration was reduced;
🔹 The number of proceedings in LCIA for the reporting period (2017-2024) reached a record level of 1,625 cases, whereas the previous report (2013-2016) recorded 1,025 cases.
Thus, LCIA continues to maintain its position as an efficient and accessible arbitration institution. The 2024 Report demonstrated the stability of arbitration costs and case consideration duration in LCIA.

⚖️ The North Caucasus Arbitration Court considered that the ICAC decision in favor of a foreign company is subject to enforcement, disagreeing with the lower court's position that such enforcement contradicts Russia's public order
Certhon Projects B.V. (Certhon Projects) applied to the Krasnodar Krai Arbitration Court with a request to issue an execution sheet for the enforcement of an arbitral tribunal decision made in arbitration under the ICAC regulations of the Russian Chamber of Commerce and Industry. According to the specified arbitration decision, the arbitrators partially satisfied Certhon Projects' claims against LLC Firm "Gesheft" (Firm Gesheft) and obliged Firm Gesheft to pay Certhon Projects 1,066,663.23 euros as debt for the supplied goods, 106,666.32 euros in penalties, 70,000 euros for representative services, and 2,065,683 rubles 90 kopecks for registration and arbitration fees.
The Krasnodar Krai Arbitration Court refused to issue an execution sheet, citing the disproportionality of the penalty and that the arbitration decision is unenforceable due to Russia's countermeasures against persons from "unfriendly" states, particularly restrictions on fulfilling obligations to such counterparties.
Certhon Projects disagreed with the first instance court's conclusions and appealed to the North Caucasus Arbitration Court with a cassation complaint, indicating the following arguments:
🔹 Certhon Projects is not included in the list of legal entities subject to Russia's special economic measures, including not being a company operating in the defense or weapons industry (Decree of the President of the Russian Federation No. 252 of 03.05.2022 and Government Resolution No. 851 of 11.05.2022);
🔸 The first instance court's conclusion that enforcement of the arbitration decision contradicts Russia's public order is not substantiated, as the Presidential Decrees on temporary economic measures and the procedure for fulfilling obligations between certain foreign creditors (No. 81 of 03.01.2022 and No. 95 of 05.03.2022) apply exclusively to financial relations (credits, loans, financial instruments, etc.). Thus, these measures do not restrict the possibility of enforcing the arbitration decision in favor of Certhon Projects;
🔹 In violation of Part 4 of Article 238 of the Arbitration Procedure Code of the Russian Federation, the first instance court reviewed the arbitration decision on the merits, considering the standard contractual penalty with a rate of 0.1%/day excessive. In reality, such a penalty is commonly used in business turnover and corresponds to the requirements of reasonableness and fairness.
The North Caucasus Arbitration Court agreed with the foreign company's arguments and revoked the Krasnodar Krai Arbitration Court's ruling, sending the case for a new review to the Krasnodar Krai Arbitration Court.

⚖️ The Moscow Arbitration Court refused to recognize and enforce the ICC decision in Russia, because... everything was bad, but most importantly - the "court composition" was "unfriendly"
In 2014, two companies from the Swiss SITA group from the United Kingdom and the USA (SITA companies) and LLC "Airflot Technics Trading House" (Russia) (interested party) signed a service and equipment supply contract (Contract). The parties stipulated that disputes from the Contract would be considered in arbitration according to ICC rules.
The SITA companies fulfilled the Contract, but the interested party did not make payment until 2021. The parties signed several additional agreements, fixing the debt and its repayment schedule. The interested party still did not repay the debt, so the SITA companies initiated ICC arbitration.
A sole arbitrator examined the dispute and made a decision, satisfying the SITA companies' claims. According to the arbitration decision, the interested party was to pay the companies USD 575,000, interest, as well as arbitration expenses and costs.
Later, the SITA companies assigned the claim rights under the Contract to LLC "SITA IT Services" (referred to as the applicant in the Russian court case).
The applicant applied to the Moscow Arbitration Court with a request to recognize and enforce the arbitration decision in the territory of Russia. The SITA companies were involved as third parties and supported the application.
The applicant indicated that the interested party was properly notified about the start of arbitration (referring to the ICC secretariat's letter) and did not challenge the possibility of considering the case in arbitration.
The interested party objected to the recognition and enforcement of the foreign arbitration decision. In particular, it put forward the following arguments:
🔸 There is no evidence in the case materials of notifying the interested party about the start of arbitration, it did not participate in the arbitration hearing and could not ensure representation of its interests during the arbitration;
🔹 The Contract contains two conflicting provisions on dispute resolution procedures – one on considering disputes in arbitration, and the other on considering disputes in state courts, with the parties not defining priority between the two dispute resolution procedures. Consequently, the parties did not conclude a valid and enforceable arbitration agreement, and the arbitrator had no competence to consider the dispute;
🔸 The assignment agreement to the applicant is invalid. The interested party previously did not declare its invalidity, as there are no evidence of its conclusion and confirmation of the authority to sign the contract;
🔹 The SITA company [presumably referring to the group of companies] had a system-forming character for international civil aviation in general and for civil aviation in Russia in particular and for the safety of civil air transportation in Russia. At the same time, SITA refused to service Russian users, "despite the absence of obstacles to carrying out such activities". In this connection, recognizing and enforcing the arbitration decision would violate Russia's public order.
The Moscow Arbitration Court accepted the interested party's arguments without further analysis and also indicated that by virtue of regulatory legal acts of the President and Government of Russia, a list of unfriendly states is established. In the court's opinion, in this case, "the lack of impartiality and objectivity... with such a court composition is presumed until there is data indicating otherwise".
Thus, the court refused to satisfy the application.
As it turned out, the arbitrator did not understand either the substance or the process in the dispute over the acknowledged debt. So much so that they did not take into account their own bias or the fact that payment for the services performed was not subject to satisfaction, since the company had left the Russian market. How good that lawyers with the participation of the prosecutor's office were able to explain this to the court.

⚖️ The North Caucasus Arbitration Court disagreed with the refusal to recognize and enforce a Dubai court decision in Russia
In 2019, JSC "Vuz-bank" (Bank) and Hakan Holdings Limited (UAE) (HHL) signed a guarantee agreement to secure the fulfillment of LLC "Rus-AgroExport" obligations to the Bank under a credit agreement.
Later, the Bank applied to the Dubai court with a claim to recover debt from HHL under the guarantee agreement. In January 2021, the court issued a decision in favor of the Bank and obliged HHL to pay about 20 million dirhams, with interest at a rate of 9% until the debt is repaid. Subsequently, the same court issued an additional decision, correcting the currency to US dollars. The Appeals Court upheld the decision and confirmed the competence of the first instance court.
The Bank applied to the Rostov Region Arbitration Court with a request to recognize and enforce the Dubai court decision in the territory of Russia. The Bank noted that HHL has a share in the authorized capital of a Russian company - this is property against which recovery can be levied in Russia.
HHL objected in the first instance court, referring to the fact that there is no agreement between Russia and the UAE on mutual recognition of court decisions, and there is no law in Russia that would provide for the possibility of satisfying such an application. HHL also indicated that it was not involved in the court proceedings when the case was considered by the Dubai court. In addition, HHL referred to the fact that the parties had concluded a prorogation agreement in favor of the Sverdlovsk Region Arbitration Court.
In response, the Bank pointed out that only an arbitration agreement could be an obstacle to the case's jurisdiction by the Dubai court, and in other cases, only UAE courts are competent to consider disputes against persons from the UAE.
The first instance court refused to recognize and enforce the foreign judicial decision, citing that by virtue of the parties' agreement, the dispute is under the jurisdiction of a Russian court, and its consideration by a UAE court violates Russia's sovereignty.
The Bank appealed the first instance court's ruling in cassation and referred to the following circumstances:
🔹 The court unreasonably ignored the UAE Appeals Court act, which confirmed the UAE court's competence in the dispute, and did not examine foreign law norms;
🔸 The grounds for refusing to recognize and enforce a foreign decision in Russia are exhaustive and do not allow extensive interpretation;
🔹 The first instance court did not take into account the composition of dispute participants. First, considering the dispute in Dubai met the interests of the debtor, a company from the UAE, where he had "more opportunities to exercise his procedural rights" and his interests could not be violated during the process. Meanwhile, the Bank responded that its parent company is an SDN entity on the sanctions lists of the United Kingdom and Canada. Second, by avoiding enforcement of the decision in Russia, the debtor is abusing the right.
HHL in the cassation court insisted on the arguments presented in the first instance court. It also added that the reference to sanctions is groundless, since the Bank itself is not under sanctions. In addition, HHL emphasized that it did not participate in the process in Dubai, which is an unconditional basis for refusing to recognize and enforce the court decision.
The Cassation Court agreed with the Bank's arguments. It did not find grounds for refusing to recognize and enforce the foreign judicial decision provided for in Part 1 of Article 244 of the Arbitration Procedure Code of the Russian Federation [the court also referred to the 1958 New York Convention, clearly inapplicable in this case].
The Cassation Court revoked the lower court's act and sent the case for a new review.

⚡️ HKIAC published a report on its activities in 2024
Key indicators of the HKIAC report for 2024:
🔹 Total of 503 new cases: including 352 arbitrations from 510 contracts; 8 mediations and 143 domain disputes.
🔸 Total claim amount in all arbitrations was 106 billion Hong Kong dollars (about $13.6 billion). The average claim amount in HKIAC-administered arbitration was 375 million Hong Kong dollars (about $48.1 million).
🔹 76.4% of all arbitrations in 2024 were international in nature, meaning at least one party in such disputes was not from Hong Kong. In 41.5% of all arbitrations, no party was from Hong Kong, and in 14.5% of cases, no parties were from the Asian region.
🔸 In total, parties from 53 jurisdictions participated in HKIAC arbitrations. Besides Hong Kong and Mainland China, the most participants were from the British Virgin Islands, Cayman Islands, Singapore, USA, UAE, South Korea, Marshall Islands, and Philippines.
🔹 In 2024, the most common were commercial disputes (14.5%), goods sales disputes (13.9%), corporate disputes (13.6%), maritime disputes (12.2%), construction disputes (9.7%), and other sectors. Overall, HKIAC statistics confirm that the center administers a wide range of disputes.
🔸 In 97.1% of cases, the arbitration venue was Hong Kong, with occasional arbitrations in Dubai and London.
🔹 Substantive law applied included Hong Kong law, English law, Mainland China law, New York law, British Virgin Islands law, Singapore law, Cayman Islands law, Delaware law, German law, Indonesian law, New Jersey law, Ohio law, Russian law, and Swiss law. The statistics also indicated the application of the Vienna Convention on Contracts for the International Sale of Goods and INCOTERMS.
🔸 79.3% of proceedings were conducted in English, with arbitrations also held in Chinese and in both languages simultaneously.
🔹 Among arbitrators appointed by HKIAC, 30.9% were from Hong Kong, 21.2% from the United Kingdom, 11.5% from Australia, 7.1% from Mainland China, 5.7% from Singapore. Two arbitrators from Russia were also appointed.
🔸 Parties most often proposed arbitrator candidates from Hong Kong (35.3%), United Kingdom (24.1%), Singapore (8.7%), Mainland China (7.9%), and Canada (4%). Five arbitrator nominations from Russia were put forward.
🔹 Women arbitrators constituted 34.7% of all arbitrators appointed by HKIAC, while parties proposed women arbitrators in 19.1% of cases.
🔸 In 2024, information about third-party arbitration financing was disclosed in one case.
It is also noted that in 2024, the number of arbitration decisions recognized and enforced / compulsorily executed in Hong Kong significantly increased.

The Max Planck Institute published Hamburg Guidelines for Determining and Applying Foreign Law in Court, which were translated into Russian
The Institute of Comparative and International Private Law of the Max Planck Society (MPI-PRIV) presented new Guidelines for Determining and Applying Foreign Law in Judicial Proceedings in Germany (Hamburg Guidelines).
The document aims to unify the approaches of courts, experts, and parties when resolving legal issues related to the application of foreign law in judicial proceedings in Germany. The act is not mandatory, but reflects the practice of German courts and the Federal Supreme Court of Germany, which increases its legal value for judges, lawyers, and other practicing professionals.
Among other things, the Hamburg Guidelines highlight the following key approaches:
🔹 The application of foreign law in German legal proceedings is based on the principle of da mihi factum, dabo tibi ius, which means the court's obligation to apply the appropriate law to the established factual circumstances of the case;
🔸 The court is obliged to independently resolve issues of qualification, references to foreign law, and its interpretation. If German private international law norms contain a reference to foreign law, the court may not replace it with German legislation without sufficient grounds;
🔹 If the court cannot establish the content of foreign law with a reasonable degree of certainty, it is obliged to consider the possibility of applying similar norms or principles operating in the legal order of the respective state.
The Hamburg Guidelines also contain basic principles and guidelines for courts, experts, and parties.
Thus, the Hamburg Guidelines form a flexible and transparent system for establishing and applying foreign law in German legal proceedings. They are aimed at ensuring legal predictability, protecting the rights of parties, and the effectiveness of justice.

⚖️ The Economic Disputes Judicial Panel of the Supreme Court of the Russian Federation will consider the admissibility of refusing to issue an enforcement sheet for a arbitration award due to the disproportionality of the recovered penalty
On December 28, 2023, the arbitration panel at the Arbitration Center of the Russian Union of Industrialists and Entrepreneurs obligated LLC "Siblesstroi" (interested party) to pay PAO "Rosseti" (applicant) a penalty for non-compliance with the work completion deadlines under a contract concluded following a procurement process.
Since the interested party did not voluntarily execute the arbitration decision, the applicant applied to the Arbitration Court of Tomsk Region with a request to issue an enforcement sheet for its compulsory execution. The courts of first and cassation instances refused to satisfy the application, pointing to the disproportionality of the penalty specified in the arbitration decision to the consequences of the obligation breach by the interested party. According to the courts, the compulsory enforcement of the arbitration court decision would contradict the public order of the Russian Federation.
The applicant appealed the acts of lower courts, indicating the following circumstances:
🔹 Russian legislation limits the state court's right to review an arbitration decision. The lower courts exceeded their powers and reviewed the arbitration decision on the merits;
🔸 The penalty established in the contract of 0.1% of the contract price for each day of delay is standard, and the interested party agreed to participate in the procurement procedure and was preliminarily familiarized with the corresponding contract conditions concluded based on the procurement results;
🔹 The courts only formally indicated a contradiction to the public order of Russia in the absence of any evidence suggesting the disproportionality of the penalty.
Judge of the Supreme Court of the Russian Federation T.V. Zavyalova considered that the applicant's arguments deserve attention and issued a ruling to transfer the cassation complaint for consideration in a judicial session of the Economic Disputes Judicial Panel of the Supreme Court of the Russian Federation.

⚖️ The Sverdlovsk Region Arbitration Court left the claim for debt recovery without consideration due to the dispute's jurisdiction by English courts
On September 9, 2024, xChange Solutions GmbH (assignor) and LLC "Stimulus" (assignee) signed a claim transfer agreement (contract). Under the contract, the assignor transferred to the assignee all claim rights against LLC "KUB" (debtor) arising from the terms of use of the xChange platform for container movement and several multilateral container exchange agreements. The usage terms, concluded by the debtor's registration on the platform, provided that any disputes should be referred to English courts. One of the agreements between the assignor, debtor, and suppliers stipulated that suppliers could choose the jurisdiction for dispute resolution. Some suppliers indicated in this agreement that disputes were to be transferred to arbitration under the rules of the Hong Kong International Arbitration Center (HKIAC).
The assignee believed that the prorogation and arbitration agreements were unenforceable and applied to the Sverdlovsk Region Arbitration Court with a claim against the debtor to recover 169 million rubles under the contract.
The debtor filed a petition to leave the statement of claim without consideration, referring to the following circumstances:
🔸 One of the usage terms was a prorogation agreement, according to which the consideration and resolution of all arising disputes would be carried out in an English court under English law. The usage terms establish that these conditions have priority over any other agreements concluded later;
🔹 The assignee referred to the absence of PDAU status for London arbitration institutions, but this argument is irrelevant, since the applicable usage terms provided for dispute resolution in the state courts of England, not in arbitration;
🔸 References to the multilateral agreement providing for HKIAC arbitration are groundless. The claim was filed based on the claim transfer agreement to the debtor as a platform user, not as a supplier. According to the agreement, jurisdiction is determined by the supplier;
🔹 This dispute is not related to the territory of the Russian Federation: according to the parties' agreement, the proceedings should take place under English legislation, and most evidence is located in the territory of other states. This would create obstacles to considering this dispute in a Russian arbitration court.
The Sverdlovsk Region Arbitration Court, having examined the case materials and the parties' arguments, left the statement of claim without consideration due to lack of competence.

⚖ The Moscow Arbitration Court found no evidence of public order violation and terminated proceedings to cancel the arbitration award due to the arbitration clause provision on the decision's finality
LLC "RT-ENGINEERING" (applicant) applied to the Moscow Arbitration Court against PAO "ODK-Saturn" (interested party) to cancel the decision of the Arbitration Institution at OOОР "SoyuzMash Russia" from 30.08.2024 in case No. AU-358/2024. According to the specified arbitration award, a sole arbitrator obligated the applicant to pay the interested party interest for using other people's monetary funds under a supply contract, arbitration costs, and arbitration fee expenses.
In substantiation, the applicant indicated that when considering the case, the arbitration court violated the provisions of the Federal Law "On Arbitration (Arbitration Proceedings) in the Russian Federation", as it did not provide the applicant with the opportunity to review the application for recovering arbitration costs. Consequently, in the applicant's opinion, executing the arbitration court decision would violate the public order of the Russian Federation.
Having examined the applicant's arguments, the court established that the arbitration court decision directly indicated the absence of objections from the applicant against recovering arbitration costs. Thus, the court did not accept the applicant's argument about violating the Russian Federation's public order when executing the arbitration court decision due to its lack of proof.
The court also took into account the arbitration clause provision on the finality of the arbitration decision, which prevents the applicant from applying to the court to cancel the arbitration decision.
Thus, considering the presence of an arbitration clause in the contract indicating the finality of the arbitration decision, the Moscow Arbitration Court concluded that the application to cancel the arbitration decision is not subject to court consideration and terminated the proceedings.

⚖ The Arbitration Court of St. Petersburg and Leningrad Region left without consideration the application to recognize and enforce a Chinese court ruling in the territory of the Russian Federation
Recently, we wrote that the Arbitration Court of the North-Western District sent a case on recognizing and enforcing a Chinese court ruling approving a settlement agreement for a new review.
Within the same case, the Arbitration Court of St. Petersburg and Leningrad Region again accepted for proceedings an application to recognize and enforce the ruling of the Supreme People's Court of the Zhejiang Province of the People's Republic of China and to enforce the ruling approving a settlement agreement between Zhejiang Jiahe Construction Co., Ltd. (applicant) and LLC "Hua-Ren International" (interested party), recovering 14.5 million yuan of principal debt and 2.2 million yuan in penalties from the interested party in favor of the applicant, as well as penalties of 0.03% of the principal amount from 26.10.2024 until the actual fulfillment of the obligation.
The court of first instance again analyzed the circumstances of the case and, among other things, pointed out that the provisions of the Treaty between Russia and China on Legal Assistance in Civil and Criminal Cases of 19.06.1992 (Legal Assistance Treaty) contain formal requirements for filing a petition to recognize and enforce the Chinese court decision in the territory of Russia. Similar formal requirements are established in the Arbitration Procedure Code of the Russian Federation.
The applicant did not properly certify the documents, which, among other things, differed in content in their translations [most likely referring to the Chinese court ruling], which the applicant itself acknowledged. Accordingly, the court indicated that the applicant filed the application in violation of the Legal Assistance Treaty norms regarding the proper form of presenting the judicial act for which recognition and enforcement are requested.
As established by the court, the applicant did not provide evidence of the impossibility of complying with the Legal Assistance Treaty norms, and therefore could not apply to the Russian arbitration court with such an application.
Thus, the Arbitration Court of St. Petersburg and Leningrad Region left without consideration the application to recognize and enforce the Chinese court ruling in the territory of the Russian Federation.

⚖ The Moscow Arbitration Court satisfied the application to recognize and enforce in the territory of Russia a decision made in arbitration under the Arbitration Institute of Swiss Chambers of Commerce rules in favor of a Russian company
On December 12, 2019, a sole arbitrator issued a decision approving a settlement agreement in a case administered by the Arbitration Institute of Swiss Chambers of Commerce (currently the Swiss Arbitration Center). According to the settlement agreement, "GROUP DF HOLDINGS LIMITED" (interested party) was obligated to pay JSC "First Channel" (applicant) a debt amount of $59,850,000 and a sixth payment of $25,000,000 under the Securities Transfer, Acquisition, and Sale Agreement according to an agreed schedule. Payments were to begin in November 2019 and end in March 2028.
The applicant applied to the Moscow Arbitration Court with a request to recognize and enforce the sole arbitrator's decision due to the interested party's failure to fully fulfill its obligations under the settlement agreement. According to the applicant's calculation, the total debt of the interested party, taking into account the unpaid debt and penalty, amounted to 9,644,727,304.33 rubles.
After examining the applicant's arguments, the court satisfied the application, indicating the following circumstances:
🔸 Russia is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, therefore the sole arbitrator's decision can be recognized and enforced in the territory of Russia;
🔹 The three-year period for filing an application to recognize and enforce a foreign arbitration decision in the territory of Russia has not expired, as based on the arbitration decision, the date of execution of the first of the unfulfilled payment obligations of the interested party was September 30, 2020;
🔸 The applicant, the chairman of the board of directors, and the general director were included in the sanctions lists of the USA, EU, Canada, and the United Kingdom. Under such circumstances, in the court's opinion, "recognizing and enforcing the foreign arbitration decision in the territory of Russia is practically the only available method for the applicant to protect its violated right";
🔹 There are no other grounds for refusing to recognize and enforce the sole arbitrator's decision in Russia.
The court also referred to Article 248.1 of the Arbitration Procedure Code of the Russian Federation to establish the grounds for filing the application at the applicant's location - in the Moscow Arbitration Court.
Thus, the Moscow Arbitration Court satisfied the application to recognize and enforce in the territory of Russia the arbitration decision of a sole arbitrator, issued under the Arbitration Institute of Swiss Chambers of Commerce rules.

⚖ A dispute between two Russian companies can be transferred to a "foreign" international arbitration: The Arbitration Court of St. Petersburg and Leningrad Region left a claim by a Russian entity against another Russian entity without consideration due to an arbitration clause in favor of the London Maritime Arbitrators Association
Recently, we wrote about the Sverdlovsk Region Arbitration Court leaving without consideration the statement of claim by LLC "Stimulus" against LLC "KUB" due to the jurisdiction of English courts to consider the dispute.
A dispute in the Arbitration Court of St. Petersburg and Leningrad Region also arose based on the claims of LLC "Stimulus" (plaintiff) under the Multilateral Exchange Agreement for the xChange platform based on a standard container exchange agreement (Agreement), the claims under which were transferred to the plaintiff by a claim transfer agreement against LLC "Songer" (defendant).
The Arbitration Court of St. Petersburg and Leningrad Region followed the position in the LLC "KUB" case and, having examined the plaintiff's claims, left the claim without consideration. The court pointed to the following grounds:
🔸 The parties agreed in the Agreement on an alternative arbitration clause for dispute resolution in international commercial arbitration (the parties were offered arbitration options: "arbitration in London in accordance with the London Maritime Arbitrators Association (LMAA) Terms; arbitration in New York in accordance with the Society of Maritime Arbitrators (SMA) rules; arbitration in Singapore in accordance with the Arbitration Rules of the Singapore Maritime Arbitration Chamber (SCMA); arbitration in Hong Kong in accordance with the Hong Kong International Arbitration Center (HKIAC) rules");
🔹 The arbitration clause concluded by the legal predecessor extends to the plaintiff as the legal successor;
🔸 Russian legislation lacks provisions prohibiting the transfer of a dispute between two Russian entities to international commercial arbitration, including a "foreign" one. If, as a result of claim transfer, two Russian parties become the parties to the arbitration clause, such an arbitration clause is still valid and enforceable, and intentionally changing the dispute's jurisdiction through a cessation agreement is inadmissible [section "issues that interest us since the reform"];
🔹 The plaintiff is not under sanctions from foreign states. Consequently, the plaintiff has no grounds to resort to the protective measures provided for in Article 248.1 of the Arbitration Procedure Code of the Russian Federation.
Thus, the Arbitration Court of St. Petersburg and Leningrad Region left the claim without consideration due to the existence of a valid and enforceable arbitration clause.

SCC published 2024 statistics (by number of participating parties from a specific country, Russia is in 2nd place with 23 compared to Sweden in first place with 280)
The published SCC report reflects the following key data:
🔹 In 2024, 204 new cases were registered, 105 of which were international and 99 domestic. This is 31 cases more than were registered in 2023;
🔸 The total amount of claims across all cases was 13.5 billion euros;
🔹 The most common disputes were those concerning retail trade and consumer goods, financial services, real estate, and construction;
🔸 More than 12 cities were chosen as arbitration venues. Stockholm, Gothenburg, London, and Helsinki were most frequently used as arbitration locations;
🔹 In 2024, parties from 40 jurisdictions participated in disputes administered by SCC. The most participants were from Sweden (280 parties), Russia (23 parties), United Kingdom (21 parties), Norway (20 parties), and Finland (14 parties);
🔸 Parties most often chose English and Swedish as the language of arbitration, Russian was used in 3 cases, and French in 1 case;
🔹 In most cases considered under the SCC Arbitration Rules, the final decision was made within 6-12 months after the case was transferred to the arbitration panel. In almost all cases considered under the SCC Expedited Arbitration Procedure Rules, the final decision was made within 0-6 months;
🔸 12 challenges to arbitrators were registered. 4 arbitrators voluntarily recused themselves after the corresponding party statement. In 8 cases, the SCC Board made the recusal decision: 6 applications were rejected, 1 application was satisfied, and 1 was rejected due to receiving such a statement after the final arbitration decision was issued.

⚖️ The Sverdlovsk Region Arbitration Court refused to recognize and enforce in the territory of Russia the decision of the Specialized Interdistrict Economic Court of Astana due to improper notification of the defendant
On 05.09.2024, the Specialized Interdistrict Economic Court of Astana (Kazakhstan) recovered a debt of 324,000 rubles under case No. 7119-24-00-2/7546 in favor of LLP "NAKTY KOLIK" (applicant) from LLC "Resource Organizer Logistics" (interested party) for a contract on providing (sending) wagons for loading.
The Kazakh court's decision entered into legal force but was not executed.
The applicant applied to the Sverdlovsk Region Arbitration Court with a request to recognize and enforce the decision in Russia. The interested party objected to the recognition and enforcement of this decision and challenged the fact of its notification about the case consideration in the Kazakh court.
After examining the case materials, the court came to the following conclusions:
🔸 Notification of the court session arrived in the city of the interested party's location after the court session was held;
🔹 The electronic letter sent from the Kazakh court's email address to the interested party's email address does not confirm the fact of notification, since this email is not used by the interested party and is not specified in the text of the contract concluded between the parties;
🔸 The ruling of the Sverdlovsk Region Arbitration Court on the delivery of documents in the case considered in the Kazakh court No. 7119-24-00-2/7546 cannot serve as evidence of proper notification, as it was issued later than the date of the Kazakh court's decision. Moreover, the interested party did not appear at the court session on document delivery, and envelopes with court correspondence were returned to the court due to the expiration of storage periods at the post office.
Thus, the Sverdlovsk Region Arbitration Court refused to satisfy the application to recognize and enforce in Russia the decision of the Kazakh court due to improper notification of the interested party about the foreign process.

⚖️ The Supreme Court of the Russian Federation cancelled the acts of lower courts, pointing out the lack of evidence of penalty disproportionality and the inadmissibility of reviewing the arbitration award on the merits
Previously, we reported that the first and cassation instance courts refused PAO "Federal Grid Company - Rosseti" (applicant) in issuing an enforcement sheet for compulsory execution of the arbitration panel's decision under the Arbitration Center at the Russian Union of Industrialists and Entrepreneurs regulations. The courts referred to a violation of the Russian Federation's public order in executing the arbitration award, as the arbitrators established an excessive penalty amount in the arbitration decision.
The applicant filed a cassation complaint against the acts of lower courts, which Judge of the Supreme Court of the Russian Federation T.V. Zavyalova transferred for consideration to the Economic Disputes Judicial Panel.
The panel chaired by Judge A.A. Yakimov, after analyzing the cassation complaint arguments, satisfied it for the following reasons:
🔹 The arbitration court panel evaluated and reasonably rejected the arguments of LLC "Siblesstroi" (interested party) about the disproportionality of the penalty to the consequences of the obligation breach. At the same time, the lower courts did not assess which contract terms about the penalty are unfair and contrary to the Russian Federation's public order. The courts also did not evaluate the procedural behavior of the interested party, which did not ensure the appearance of representatives and did not present a legal position on the case. Consequently, in the Economic Disputes Judicial Panel's opinion, the first and cassation instance courts "actually allowed a review of the arbitration court decision on the merits by including unmotivated conclusions in the challenged judicial acts", which is not provided for by Russian legislation;
🔸 The lower instance courts left unassessed the fact that the contract containing penalty provisions was concluded following a procurement process, and the penalty amount was standard for similar legal relations, as confirmed by judicial practice in similar cases. Consequently, the contract penalty performed a stimulating function and was not aimed at obtaining an unjustified benefit by the applicant.
Thus, the Supreme Court of the Russian Federation cancelled the judicial acts of the lower instances and satisfied the application for issuing an enforcement sheet for compulsory execution of the arbitration panel's decision at the Arbitration Center of the Russian Union of Industrialists and Entrepreneurs.

The High Court of England and Wales refused to suspend judicial proceedings despite an arbitration clause in the original agreement of the parties, as the settlement agreement contained a prorogation clause in favor of English courts
In 2012, Destin (plaintiff, Panama) and Saipem (defendant, France) signed three Framework Agreements (Agreements), according to which the parties were bound by the defendant's General Terms and Conditions for Agreement Documents. The General Terms included an arbitration clause for referring all disputes related to the Agreements to arbitration under ICC rules with the arbitration venue in London.
A dispute arose between the parties regarding one of the Agreements about the defendant's non-payment of the full cost of provided services. In 2013, the parties signed a settlement agreement that resolved the dispute, waived claims against each other, and terminated the Agreements. The settlement agreement provided for the exclusive competence of the courts of England and Wales to resolve disputes arising in connection with it (prorogation clause).
The plaintiff applied to the High Court of England and Wales with a claim to terminate the settlement agreement and recover damages, indicating fraud and misrepresentation by the defendant when concluding it. In the plaintiff's opinion, the fraud consisted of the defendant's promises to conclude additional contracts with the plaintiff when signing the settlement agreement.
The defendant disagreed with the plaintiff's arguments and stated that it never made statements about signing additional contracts. Also, in accordance with Section 9(1) of the Arbitration Act 1996, the defendant filed an application to suspend the judicial process in the English court. The defendant justified its application by stating that the plaintiff's claims are related to the Agreement providing for ICC arbitration.
The plaintiff objected to satisfying the application due to monetary claims arising from the defendant's fraud when concluding the settlement agreement. In the plaintiff's opinion, the prorogation clause in the settlement agreement replaced the arbitration clause in the General Terms.
The court agreed with the plaintiff and rejected the defendant's application, referring to the precedent Monde Petroleum v Westernzagros Limited EWHC 67 (Comm) (decision of January 22, 2015) and indicating the following grounds:
🔹 It is presumed that the parties intended to replace the previously existing dispute resolution provision in the contract with the provision on dispute resolution in the settlement agreement. Resolving disputes that arose before the settlement agreement by another court or arbitration panel creates a risk of inconsistent decisions;
🔸 The defendant's argument that recognizing the jurisdiction of English courts loses the "commercial rationale" for the parties' arbitration clause is irrelevant. The parties also had a "commercial rationale" for concluding a prorogation clause, namely "collecting future rights and obligations of the parties in one place" and preventing fragmentation of the dispute resolution process;
🔹 The wording of the prorogation clause is broad and extends to "any disputes". Consequently, disputes arising in connection with the Agreements also fall under its scope;
🔸 The plaintiff's claims are claims for damages for fraud that led to the conclusion of the settlement agreement, despite being related to recovering monetary funds due to the plaintiff under the Agreement if the settlement agreement was not concluded (damages on the negative contractual interest model). Consequently, the plaintiff's claims do not fall under the arbitration clause.
Thus, the High Court of England and Wales rejected the defendant's application to suspend the judicial process due to the presence of a prorogation clause in the settlement agreement on the exclusive jurisdiction of the courts of England and Wales.