In one of our recent articles (see here), we discussed a case in which the Russian commercial court refused to recognise an arbitral award because it was requested by a foreign company from a so-called unfriendly country without a domestic bank account. Enforcement would result in a violation of the provisional public order.

Now, the Moscow Regional Commercial Court, as the court of appeal in case No. А40-211260/2024 (see here) has ruled that an arbitral award issued by the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (MKAS) on August 1st, 2024 can be recognised and enforced.

Background of the Case

In arbitration proceedings, a Russian company claimed repayment of an advance payment made under a purchase agreement. The special feature of this claim was that the purchase agreement had originally been concluded between an Estonian company as the seller and the defendant as the buyer. The Estonian company then assigned this claim to the current plaintiff.

The defendant defended itself in the recognition proceedings in the usual manner: enforcement of the arbitral award would violate the public policy (ordre public) and the decrees of the Russian President dated 1 March 2022 No. 81, dated 5 March 2022 No. 95 and 252, and dated 4 May 2022 No. 254. According to these decrees, it is prohibited to enter into legal transactions with foreign companies from so-called unfriendly states, as enforcement would mean performance to the original creditor.

The Court of Appeal rejected these objections. It held that the presidential decrees do not impose a general prohibition on the transfer of claims. Instead, the decrees apply only to specific categories of transactions, such as real estate deals exceeding 10 million roubles. Since this case did not fall within those categories, there was no basis to refuse recognition.

Court’s Reasoning

The court also clarified that the mere fact that the claim originated from a contract with a foreign party from an “unfriendly” state does not, in itself, justify non-recognition of an arbitral award. In doing so, the Court of Appeal confirmed the reasoning of the court of first instance (see here).

Practical Implications

These decisions indirectly confirm the suggestion we made in our earlier post: for successful enforcement of claims in Russia, assignment to a Russian company may be a practical solution. Such an assignment can shield enforcement from challenges based on the foreign creditor’s registered office or alleged violations of presidential decrees.

Of course, Russian case law remains unpredictable. It is entirely possible that another court—or even the same court in a different case—might decide the issue differently. Nevertheless, assignment of claims to a Russian entity could be a viable option to increase the chances of enforcement.

We will continue to monitor how Russian courts address this issue and whether this solution gains broader acceptance in practice