Enforcement of Arbitration awards in Russia
Ramasubramanian Ammamuthu
Construction Arbitration / Counsel | Expert Witness | Advocate| Arbitrator | Mediator | Member #IBA | ODR Neutral.
Applicable legislation as to the form of awards
1? ? ?Must an award take any particular form?
Article 31 of the Law of the Russian Federation on International Commercial Arbitration (the Law on ICA) requires an arbitral award to be 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 reasons for omission of signatures. Furthermore, an award shall state the date and seat of arbitration, reasons for the decisions made, a conclusion on the fulfilment or rejection of a claim, the amounts of arbitral fees and arbitral costs and their distribution between participants. Copies of the award shall be produced according to the number of the parties and delivered to each of them.
A copy of an arbitral award shall be certified by a notary (in an ad hoc arbitration) or by the permanent arbitral institution that administered the arbitration (Law on ICA, Article 35(2); Commercial Procedure Code of the Russian Federation, Article 237(4)(1); Civil Procedure Code of the Russian Federation, Article 419(4)(1)). Certification is obligatory if a party applies for the enforcement or setting aside of an award on the territory of the Russian Federation.
Applicable procedural law for recourse against an award
Applicable legislation governing recourse against an award
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)?
Article 33 of the Russian Federation on International Commercial Arbitration (the Law on ICA) grants all parties the right to apply for modification of an award, namely correcting mistakes in calculations, omissions or typographical errors subject to notification of other parties. Subject to the mutual agreement of the parties, they may request an arbitral tribunal to clarify a specific point or part of an award. A request for correction or clarification may be filed within 30 days of receipt of an award. The arbitral tribunal shall make the appropriate correction or provide clarification within 30 days of receipt of the request if it finds it to be justified.
An arbitral tribunal is entitled to correct any mistakes or omissions by its own initiative within 30 days of the date of rendering an award.
Any corrections or clarifications made by an arbitral tribunal shall become the part of an arbitral award.
Furthermore, any party subject to notification of another party may request an arbitral tribunal to render an additional award regarding the claims submitted in proceedings but not included in an award within 30 days of receipt of an award. An arbitral tribunal shall render an additional award within 60 days of receipt of the request if it finds it to be justified.
Russian legislation does not provide for the revision of arbitral awards on their merits either by permanent arbitral institutions or by state courts.
Appeals from an award
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?
Russian courts are not entitled to hear appeals of arbitral awards. Russian legislation provides only for the setting aside of an arbitral award in a limited number of circumstances (Commercial Procedure Code of the Russian Federation, Article 233; Civil Procedure Code of the Russian Federation, Article 421).
Applicable procedural law for setting aside of arbitral awards
Time limit
4? ? ?Is there a time limit for applying for the setting aside of an arbitral award?
An application to set aside an arbitral tribunal must be filed no later than three months after the date of receipt of an award by the applying party, unless stipulated otherwise by an international treaty or a federal law (Commercial Procedure Code of the Russian Federation, Article 230(4); Civil Procedure Code of the Russian Federation, Article 418(2)).
Award
5? ? ?What kind of arbitral decision can be set aside in your jurisdiction? Can courts set aside partial or interim awards?
Courts can set aside awards only on the merits of the dispute, (i.e., ‘final’ awards). Generally, courts refuse to set aside partial or interim awards, or awards on preliminary measures with reference to the absence of relevant rules in the Russian procedural legislation.
As an exception, an interim award on the jurisdiction of an arbitral tribunal may be set aside based on a party’s application, which must be filed within one month of receipt of the interim award (Commercial Procedure Code of the Russian Federation, Article 235; Civil Procedure Code of the Russian Federation, Article 422.1). However, parties to a dispute resolved by institutional arbitration are entitled to exclude that option by their explicit agreement (Law on ICA, Article 16(3)).
Competent court
6? ? ?Which court has jurisdiction over an application for the setting aside of an arbitral award?
The court on whose administrative territory (i.e., regions for commercial courts and districts for courts of general jurisdiction) an award was rendered is competent to consider an application for the setting aside of that award (Commercial Procedure Code of the Russian Federation, Article 230(4); Civil Procedure Code of the Russian Federation, Article 418(2)).
Form of application and required documentation
7? ? ?What documentation is required when applying for the setting aside of an arbitral award?
A party applying for setting aside of an arbitral award must provide the following (Commercial Procedure Code of the Russian Federation, Article 231; Civil Procedure Code of the Russian Federation, Article 419):
It is sufficient to provide the court with one copy of each of these documents. All documentation may be filed in digital form.
Translation of required documentation
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?
Russian procedural legislation requires court proceedings to be conducted in Russian (Commercial Procedure Code of the Russian Federation, Article 12; Civil Procedure Code of the Russian Federation, Article 9). All documents drafted in a foreign language must be translated into Russian and certified by a public notary. The accuracy of a translation may be certified but, in practice, it is sufficient to certify the signature of the translator and not the translation itself. It is also permissible to submit relevant excerpts from presented documents.
Other practical requirements
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?
An application for setting aside may be filed not only by the party against which an arbitral award was rendered but also by non-participants of arbitral proceedings whose rights and obligations are affected by a rendered award.
The state fee is 3000 roubles. Other costs may include charges for legal representation and for certification of documents, which may be recovered from an opposing party in the event that the award is successfully set aside.
There is no limitation on the length of the submissions and supporting documentation. All documents drafted in a foreign language must be translated into Russian and certified by a public notary.
Form of the setting-aside proceedings
10? ? ?What are the different steps of the proceedings?
An application shall be considered by a sole judge within one month of receipt of an application by the court, although, in practice, this term may be prolonged. The proceedings include preparation of the case, preliminary hearings and the main hearings on the merits of an application.
During preparation of the case, a judge may, at the request of the parties, demand the case file of the arbitral proceedings. However, in practice, judges almost always demand the case file without any request from the parties.
The parties may attend the hearings but if they do not, a judge is entitled to consider an application in the absence of the parties. First, the court considers evidence presented by parties. Then the parties are entitled to make their statements based on evidence considered by the court. After that, the court allows the parties to respond to each other’s statement.
Suspensive effect
11? ? ?Do setting-aside proceedings have suspensive effect? May an arbitral award be recognised or enforced pending the setting-aside proceedings in your jurisdiction?
Russian legal order, based on legal principles, does not permit the existence of two contradictory judgments. Therefore, an arbitral award may be recognised or enforced only after resolution of an application for setting aside of an award.
Moreover, courts are entitled to suspend the proceedings on recognition and enforcement pending the setting-aside proceedings if they find it to be justified. In practice, courts often suspend recognition or enforcement proceedings until the setting-aside application is resolved, to avoid any possible contradictions.
Grounds for setting aside an arbitral award
12? ? ?What are the grounds on which an arbitral award may be set aside?
By an application of the party against which the arbitral awards was rendered, an arbitral award may be set aside based on the following grounds:
At the initiative of a Russian court (ex officio), an arbitral award may be set aside if:
Decision on the setting-aside application
13? ? ?What is the effect of the decision on the setting-aside application in your jurisdiction? What challenges are available?
The decision on the setting-aside of an award enters into force on the day it is rendered and, thus, is immediately enforceable.
The decision may be challenged at several instances. First, a decision on a setting-aside application may be appealed to a competent cassation court within one month of the date on which the decision was rendered. Next, the judgments of a cassation court may be appealed to the Supreme Court. However, appeals to the Supreme Court are subject to a preliminary review of their admissibility, as the Supreme Court acts on the principle of selective cassation revision.
Effects of decisions rendered in other jurisdictions
14? ? ?Will courts take into consideration decisions rendered in the same matter in other jurisdictions or give effect to them?
There is no unambiguous answer to this question. On the one hand, Russian courts prefer to preserve their adjudicative sovereignty and usually do not take into account foreign judgments without their preliminary recognition by Russian court judgment. On the other hand, a foreign judgment may serve as written evidence.
It is debatable whether a Russian court may give effect to a foreign judgment on a setting-aside application. De lege ferenda, it should depend on the grounds for setting aside of an award in a foreign jurisdiction in comparison with the provisions of international treaties to which the Russian Federation is a party, and its own procedural legislation.
Applicable procedural law for recognition and enforcement of arbitral awards
Applicable legislation for recognition and enforcement
15? ? ?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?
Different sets of legal rules are applied to the recognition and enforcement of arbitral awards depending on whether the award is rendered under domestic or foreign arbitration.
Domestic awards are those rendered on the territory of the Russian Federation. The applicable legislation is Articles 236 to 240 of the Commercial Procedure Code of the Russian Federation, Articles 423 to 427 of the Civil Procedure Code of the Russian Federation and the Federal Law on Arbitration (Arbitration Proceedings) in the Russian Federation.
Foreign awards are those rendered outside the territory of the Russian Federation. The national legislation are applicable to foreign awards is Articles 241 to 246 of the Commercial Procedure Code of the Russian Federation, Articles 416 and 417 of the Civil Procedure Code of the Russian Federation and the Law on ICA.
The Russian Federation is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) and the European Convention on International Commercial Arbitration of 1961. Moreover, the Russian Federation remains a party to the Moscow Convention on the Settlement by Arbitration of Civil Disputes Arising from Relations of Economic, Scientific and Technical Cooperation of 1972, which was concluded under the aegis of the Council for Mutual Economic Assistance. Furthermore, Russia is a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) as of 16 June 1992, but this treaty still is not ratified. Taking into account present discussions and proposals on reformation of the investor-state dispute settlement system, it is highly unlikely that Russia will ratify this treaty.
The New York Convention
16? ? ?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 is a party to the New York Convention. The Convention entered into force on 24 August 1960 for the USSR, Russia’s predecessor, which made a reservation for application of reciprocity to non-parties to the Convention.
Recognition proceedings
Time limit
17? ? ?Is there a time limit for applying for the recognition and enforcement of an arbitral award?
An application for the recognition and enforcement of an arbitral award can be filed within three years of the date on which an award becomes effective (Commercial Procedure Code of the Russian Federation, Article 246(2); Civil Procedure Code of the Russian Federation, Article 409(3)).
Competent court
18? ? ?Which court has jurisdiction over an application for recognition and enforcement of an arbitral award?
The court at the location of a debtor or, if the location of a debtor is unknown, at the location of a debtor’s property, is competent to consider an application for the recognition and enforcement of an award (Commercial Procedure Code of the Russian Federation, Articles 236, 242; Civil Procedure Code of the Russian Federation, Articles 410, 423).
As regards domestic awards, parties can agree to redirect competence to the court of the region in which the arbitral award was rendered, or to the court of the location of the party in whose favour the arbitral award has been rendered.
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Jurisdictional and admissibility issues
19? ? ?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?
The main requirement is to comply with territorial jurisdiction of the court. If an application is filed with the court at the location of a debtor’s property, an applicant shall identify the debtor’s property that can be subject to enforcement. Procedural legislation does not directly require an applicant to identify any assets within the jurisdiction of the court but the absence of any such identification may hinder the proceedings because it will be more difficult for the court to constitute its jurisdiction over the application.
Form of the recognition proceedings
20? ? ?Are the recognition proceedings in your jurisdiction adversarial or ex parte? What are the different steps of the proceedings?
Recognition proceedings are adversarial but if the parties do not attend the hearings, a judge is entitled to consider an application in their absence.
An application shall be considered by a sole judge within one month of receipt of an application by the court; however, in practice, this term may be prolonged. First, the court considers the evidence presented by the parties. Then, the parties are entitled to make their statements based on the evidence considered by the court. After that, the court allows the parties to respond to each other’s statement.
Form of application and required documentation
21? ? ?What documentation is required to obtain recognition?
A party applying for the setting aside of an arbitral award shall provide the following (Commercial Procedure Code of the Russian Federation, Articles 237, 242; Civil Procedure Code of the Russian Federation, Article 424):
It is sufficient to provide the court with one copy of each of these documents. All documentation may be filed in digital form.
Translation of required documentation
22? ? ?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?
Russian procedural legislation requires court proceedings to be conducted in Russian (Commercial Procedure Code of the Russian Federation, Article 12; Civil Procedure Code of the Russian Federation, Article 9). All documents drafted in a foreign language must be translated into Russian and certified by a public notary. The accuracy of a translation may also be certified but, in practice, it is sufficient to certify the signature of the translator and not the translation itself. It is also permissible to submit relevant excerpts of the presented documents.
Other practical requirements
23? ? ?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?
An application for recognition and enforcement may be filed by the party in whose favour an arbitral award was rendered.
The state fee is 3,000 roubles. Other costs may include charges for legal representation and for certification of documents, which may be recovered from an opposing party in the event that the award is set aside successfully.
There is no limitation on length of the submissions and supporting documentation.
Recognition of interim or partial awards
24? ? ?Do courts recognise and enforce partial or interim awards?
As a general rule, Russian courts recognise and enforce arbitral awards that finally resolve a dispute. Thus, Russian courts refuse to recognise and enforce any award that does not deal with the merits of the dispute, including interim awards on procedural matters or awards on preliminary measures.
Grounds for refusing recognition of an arbitral award
25? ? ?What are the grounds on which an arbitral award may be refused recognition? Are the grounds applied by the courts different from those provided under Article V of the New York Convention?
Grounds for refusal in recognition or enforcement of arbitral awards are the same as those contained in Article V of the New York Convention.
In respect of domestic awards, the grounds are set out in Article 239 of the Commercial Procedure Code of the Russian Federation and Article 426 of the Civil Procedure Code of the Russian Federation.
In respect of foreign awards, the grounds are set out in Article 36 of the Law on ICA (which is referenced in Article 244(3) of the Commercial Procedure Code of the Russian Federation) and in Article 417 of the Civil Procedure Code of the Russian Federation.
Effect of a decision recognising an arbitral award
26? ? ?What is the effect of a decision recognising an arbitral award in your jurisdiction?
A decision on the recognition and enforcement of an award enters into force on the day it is rendered and, thus, is immediately enforceable.
The decision may be challenged at several instances. First, the decision may be appealed to a competent cassation court within one month of the date on which the decision was rendered. Next, the judgments of a cassation court may be appealed to the Supreme Court. However, appeals to the Supreme Court are subject to a preliminary review of their admissibility, as the Supreme Court acts on the principle of selective cassation revision.
The challenge of a judgment does not have suspensive effect. However, a party can file a motion for suspension of the enforcement with its appeal, based on which the court can issue a ruling suspending the enforcement.
Decisions refusing to recognise an arbitral award
27? ? ?What challenges are available against a decision refusing recognition in your jurisdiction?
The decision refusing recognition and enforcement of an arbitral award can be challenged at several instances. First, the decision may be appealed to a competent cassation court within one month of the date on which the decision was rendered. Next, the judgments of a cassation court may be appealed to the Supreme Court. However, appeals to the Supreme Court are subject to a preliminary review of their admissibility, as the Supreme Court acts on the principle of selective cassation revision.
Recognition or enforcement proceedings pending annulment proceedings
28? ? ?What are the effects of annulment proceedings at the seat of the arbitration on recognition or enforcement proceedings in your jurisdiction?
Russian courts may suspend recognition or enforcement proceedings 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 in a foreign court (New York Convention, Article VI; Commercial Procedure Code of the Russian Federation Article 243(5); Civil Procedure Code of the Russian Federation, Article 417(2)). For the requesting party, it is sufficient to prove the existence of pending proceedings at the seat of the arbitration because those proceedings may affect the legal effect or finality of the enforced arbitral award.
Security
29? ? ?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?
In the event of a suspension of recognition or enforcement proceedings, the defendant to these proceedings may be ordered to provide security at the request of the enforcing party (New York Convention, Article VI; Commercial Procedure Code of the Russian Federation, Article 243(6)).
The court may grant the security if the requesting party proves that a failure to grant the security may hinder the execution of the decision or make it impossible. Furthermore, the requesting party suffers significant damage in the absence of the security.
Recognition or enforcement of an award set aside at the seat
30? ? ?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?
Generally, the fact of annulment of a foreign arbitral award excludes enforcement of the award on the territory of the Russian Federation (Law on ICA, Article 36(1)(6)).
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.
Russian procedural legislation does not provide any options for challenging a decision on enforcement after an arbitral award is set aside. One may try to apply for ‘a revision under new circumstances’ in the court that enforced the annulled arbitral award (Commercial Procedure Code of the Russian Federation, Article 311(3)). At the same time, the list of new circumstances is a closed one and does not contain an annulment of an arbitral award. Furthermore, it is disputable whether the annulment of a judgment being a ‘new circumstance’ (Commercial Procedure Code of the Russian Federation, Article 311(3)(1)) may be expansively construed to include annulment of an arbitral award.
The same is applicable to domestic arbitral awards: once the state court has fully or partially annulled a domestic award, it may not be enforced in the respected part. Moreover, taking into account the high level of scrutiny of domestic arbitral awards at the enforcement stage, it is highly unlikely that the state court would set aside a domestic arbitral award for which enforcement was already granted. This situation would mean the existence of two contradicting judgments, which in turn will violate the principle of obligatory force of judgments of commercial courts (Federal Constitutional Law On Commercial Courts in the Russian Federation, Article 7). State courts are usually very careful on this matter and take all steps to prevent such a situation arising.
Service
Service in your jurisdiction
31? ? ?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 with a translation?
Service of judicial documents is governed by Articles 121 to 124 of the Commercial Procedure Code of the Russian Federation and Articles 113 to 120 of the Civil Procedure Code of the Russian Federation.
Parties are entitled to indicate to the court the address at which they are ready to receive judicial documents. By default, judicial documents are served to the address of the place of registration. If that place is unknown, documents are sent to the last known place of residence.
Due notification of the natural person presupposes that documents shall be handed personally to him or her or to an adult living with that person. A legal entity is considered to have been notified if the documents are served to the representative authorised to receive the documentation.
Parties bear all risks of non-receipt of judicial documents when the documents have been sent to the proper address.
Russian law does not contain any specific provisions regarding the service of extrajudicial documents.
Service out of your jurisdiction
32? ? ?What is the procedure for service of extrajudicial and judicial documents to a defendant outside your jurisdiction? Is it necessary to serve these documents with a translation in the language of this jurisdiction?
As a general rule, courts serve judicial documents by a letter rogatory through the Ministry of Justice of the Russian Federation and the Ministry of Foreign Affairs of the Russian Federation if no other method is prescribed by an international treaty.
Thus, as the Ruling of the Plenary Session of the Supreme Court of the Russian Federation No. 23 dated 27 June 2017 clarifies, depending on the applicable international treaty, judicial documents may be forwarded:
A Procedural Order of the Ministry of Justice of the Russian Federation requires that all documents be served with a translation in the language of the relevant jurisdiction.
Identification of assets
Asset databases
33? ? ?Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?
A debtor’s assets are subject to identification by competent bailiffs in enforcement proceedings. At the same time, a party in whose favour an award is rendered may assist bailiffs and search for assets itself.
There are registers containing information regarding certain types of debtor’s assets on the territory of the Russian Federation:
Information available through judicial proceedings
34? ? ?Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?
Russian law does not contain procedural mechanisms allowing an award debtor to be ordered to disclose the composition or location of assets.
Enforcement proceedings
Attachable property
35? ? ?What kinds of assets can be attached within your jurisdiction?
Generally, any alienable assets can be attached as part of enforcement proceedings, including objects, other property, property rights, intellectual property, digital rights, among other things. However, there are particular exceptions to the general rule.
For individuals, Article 446 of the Civil Procedure Code sets out the property that is immune from attachment, including:
Particular kinds of assets are also exempt from attachment totally or under certain conditions (e.g., pre-emption rights). For example, Russian legislation prohibits attachment of secret inventions, compensating funds of special professional associations (public notaries, bankruptcy receivers, etc.), the property of third parties possessed by the debtor, among other things.
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