Russian courts justify refusal to enforce arbitral award in favour of “unfriendly” parties by reference to counter-sanctions decrees

Maxim Kulkov (Managing Partner) and Nikita Chernyshenko (Associate), KK&P

This article discusses the decisions of the Russian courts in Case No А32-47144/2022, which refused recognition and enforcement of a LCIA arbitral award, issued in favour of a party from a jurisdiction that had imposed sanctions on Russia. In refusing to recognise the award, the Russian courts invoked counter-sanctions decrees issued by the Russian President, as well as the incorporation of the award creditor in an “unfriendly” jurisdiction. The decisions are a worrisome example of utilising counter-sanction regulations to prevent “unfriendly” parties from enforcing otherwise valid awards in Russia.

Case No A32-47144/2022 (judgments of the Commercial Court of the Krasnodar Region (first instance) dated 18 July 2023 and judgment of the North Caucasus Circuit (Cassation Court) dated 16 October 2023).

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Reproduced from Practical Law Arbitration with the permission of the publishers. For further information visit www.practicallaw.com or call 020 7542 6664.