Damages Awarded by Foreign Courts Can Be Paid By Russian Branches
The Federal Arbitration Court of the Moscow District recently issued a decision stating that the rulings of foreign courts against companies holding property in Russia should be enforceable in Russia.
The Moscow Arbitration Court originally held that a plaintiff who requested that the damages awarded to him by Ukrainian Arbitration Court against a company which holds property in both Ukraine and Russia, could not be awarded his damages in Russia on the basis that such cases must be submitted to an arbitration court in the defendant’s legal district. Only if the defendant’s legal district is not known can a claim be made in a district where the defendant holds property. Since the debtor is known to be in Ukraine, the court concluded that it cannot consider the case.
However, the plaintiff appealed the ruling in an appellate court and the Federal Arbitration Court of the Moscow District eventually agreed with the plaintiff that a relationship of mutual recognition and execution of judicial decisions established between Russia and Ukraine by international agreements allow rulings to be enforced in both countries, no matter where the rulings were issued from.
Until recently, applicants in similar cases have been traditionally refused in their claims under the same reasoning as used Moscow Arbitration Court. However, it is now believed that the rulings of foreign courts regarding companies abroad which hold property in Russia will now be executable in Russia.
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