Sverdlovsk court rejects sanctions, sham-transaction and tribunal-composition objections in a dispute over an assigned supply receivable and allows the enforcement of an assigned claim.
Introduction
In a decision dated 24 July 2026, the Arbitrazh Court of the Sverdlovsk Region in case number A60-26002/2026 rendered a judgment on the enforcement of an ICC award concerning payment for goods under a supply contract after the seller had assigned the receivable to a Russian legal agency.
The court granted Baltalex Legal Agency LLC an enforcement writ for the ICC award of 11 March 2026 in ICC Case No. 29523/ICA7. It rejected BRIMIUM LLC’s arguments that the assignment was a sham designed to circumvent Russian sanctions-related payment rules, that the assignee lacked title to the claim, and that the arbitral procedure had denied the debtor a proper opportunity to present its case.
Facts of the Case
The supply contract and unpaid invoices
On 7 January 2022, Dema Baarn B.V. (also identified in the decision as DBA UPG Benelux and Phomi Benelux), as seller, entered into Supply Contract Incoterms No. 1 with Flexible Ceramics Fomi LLC, later renamed BRIMIUM LLC, as buyer. The contract concerned Phomi flexible ceramics on EXW China terms. The buyer was to pay in euros within three months after the cargo left the terminal. Russian law governed the contract. Clause 8.3 referred unresolved disputes to arbitration under the ICC Rules, with Moscow as the seat and Russian as the language. The contract stated that the tribunal would comprise three arbitrators.
According to the decision, the seller delivered and the buyer accepted goods between 21 November 2021 and 14 July 2022 with a total value of EUR 351,491.11. The buyer paid EUR 15,705. The decision records that the receivable identified in the assignment was EUR 335,786.11. The ICC award later fixed the principal recoverable at EUR 335,036.12; the enforcement decision does not explain the EUR 749.99 difference between those figures.
The assignment to Baltalex
On 14 June 2024, Dema Baarn B.V., as assignor, and Baltalex Legal Agency LLC, a Russian company based in Kaliningrad, as assignee, signed an assignment agreement. In the court’s account, clause 1.1 provided, in substance, that the assignor transferred and the assignee accepted the rights and obligations belonging to the assignor as creditor under the supply contract for goods delivered from 7 January 2022 to 28 March 2024, as reflected in a reconciliation statement dated 28 March 2024. The transfer included the right to demand payment of EUR 335,786.11 for unpaid goods, together with contractual penalties and interest for late payment. Clause 1.1 also covered rights securing performance and other rights connected with the assigned claim.
| ASSIGNMENT PAYMENT MECHANISM Under paragraph 1 of Appendix No. 1, after receiving money from the debtor toward the assigned right, the assignee was to transfer to the assignor 75% of the amount received, in roubles at the Central Bank of Russia’s euro exchange rate on the payment date, until the assigned right had been paid in full. |
The ruling records that the assignment was concluded by exchanging scanned documents by email, as permitted by clause 8.2. Baltalex maintained that the claim passed when the agreement was signed on 14 June 2024. Dema Baarn B.V. emailed BRIMIUM at 15:54 on 17 June 2024 with the assignment agreement and a signed notice of assignment attached. An original notice was sent again by registered mail with an inventory of enclosures on 8 August 2024 and was received on 5 September 2024.
Dema Baarn B.V.’s director gave evidence confirming the conclusion of the assignment. The decision also records that a certified copy had been supplied during the ICC proceedings and that, after Baltalex displayed a notarised assignment agreement at the oral hearing on 5 December 2025, BRIMIUM stated that it no longer doubted Baltalex’s standing. The ICC tribunal addressed the validity of the assignment in paragraphs 417 to 470 of its award and found that Baltalex could bring the supply-contract claims. Baltalex filed a notarised copy of the assignment in the Russian enforcement proceedings on 22 July 2026.
Proceedings Before the ICC and the Russian Courts
Baltalex first sued in the Arbitrazh Court of the Sverdlovsk Region in 2024. BRIMIUM invoked the ICC clause and asked the court to leave the claim without consideration. The court did so on 25 November 2024, and the Seventeenth Arbitrazh Appellate Court affirmed that order on 6 February 2025, finding the arbitration clause operative.
Baltalex commenced ICC arbitration on 13 May 2025. The ICC Court appointed Anna Grishchenkova as sole arbitrator under the expedited-procedure provisions. An organisational conference took place on 5 September 2025 with representatives of both parties. On 11 March 2026, the tribunal ordered BRIMIUM to pay Baltalex:
- EUR 335,036.12 in principal, payable in roubles at the Central Bank of Russia exchange rate on the payment date;
- EUR 92,934.96 in interest under Article 395 of the Russian Civil Code through 26 September 2025, likewise payable in roubles;
- continuing Article 395 interest from 27 September 2025 until payment of the EUR 335,036.12 principal;
- EUR 45,000 in arbitration costs, payable in roubles, and RUB 500,000.
The tribunal dismissed the remainder of Baltalex’s claims and BRIMIUM’s counterclaims for set-off. After BRIMIUM did not comply voluntarily, Baltalex applied for an enforcement writ on 29 April 2026.
Legal Considerations
Limited review at the enforcement stage
The court relied on Articles 236, 238 and 239 of the Russian Arbitrazh Procedure Code, Articles 41 and 42 of Federal Law No. 382-FZ on Arbitration, and Articles 35 and 36 of the Law on International Commercial Arbitration. It emphasised that the grounds for refusing an enforcement writ are exhaustive and that a state court may not reassess the facts established by the arbitral tribunal or review the award on the merits.
Public policy and the sanctions-circumvention allegation
BRIMIUM argued that Dema Baarn B.V., a Dutch company, had used a Russian assignee to collect the debt outside the special payment regime applicable to creditors from “unfriendly” states. It pointed to Presidential Decrees Nos. 81 of 1 March 2022 and 95 of 5 March 2022, the assignee’s alleged prior role in collecting the same debt, the payment arrangement under the assignment, and Dema Baarn B.V.’s payment of ICC costs. BRIMIUM described the arrangement as a sham and asserted that the Dutch seller remained the economic beneficiary.
The court rejected the public-policy objection. It held that Decree No. 95 applied to obligations under credits, loans and financial instruments, whereas the assigned claim arose from a supply contract. The special type-C account mechanism therefore did not apply. The court also stated that the underlying transaction was not one for which the cited presidential decrees established a special procedure, and that Dema Baarn B.V. did not appear on the list of entities subject to special economic measures under Government Resolution No. 851 of 11 May 2022.
Validity and scope of the assignment
The court found no evidence that the assignment was sham. It relied on the notarised copy, the notice history, the assignor’s director’s evidence, the debtor’s statement during the ICC hearing that it no longer doubted standing, and the tribunal’s examination of the assignment. It refused to stay the enforcement case pending BRIMIUM’s separate action in the Arbitrazh Court of the Kaliningrad Region seeking to invalidate the assignment, because that action did not make it objectively impossible to decide the enforcement application and no judgment invalidating the assignment had entered into force.
Applying Articles 382, 384, 421 and 423 of the Russian Civil Code and Supreme Court guidance, the court held that parties may agree to deferred payment or make payment for an assigned claim dependent on recovery from the debtor. The absence of immediate payment did not by itself make the transaction gratuitous or invalid. Nor did the assignor’s payment of litigation expenses for the assignee, or affiliation between the parties, establish that the assignment was fictitious. Any failure by the assignee to pay the agreed consideration would give the assignor a contractual claim; it would not, by itself, prevent the receivable from passing.
The court also rejected BRIMIUM’s argument that the assignment covered principal only. Under Article 384 of the Civil Code and clause 1.1 of the agreement, related rights, including the right to interest, passed with the claim.
Notice, opportunity to be heard and tribunal composition
BRIMIUM alleged that it had not received proper notice at the outset, had insufficient time to prepare, and had been unable to test the original assignment agreement or fully present its counterclaims. The court found that BRIMIUM had been notified, had participated actively through representatives, had submitted evidence and explanations, and had not been prevented from presenting its case. It treated the remaining complaints as an impermissible attempt to revisit the tribunal’s evidentiary assessment.
Although the supply contract specified three arbitrators, the court upheld the appointment of a sole arbitrator. It referred to Article 30 of the 2021 ICC Rules and Appendix VI, under which the expedited-procedure provisions prevail over inconsistent terms in the arbitration agreement and the ICC Court may appoint a sole arbitrator. The amount in dispute was below USD 3 million and the arbitration agreement dated from 2022. The court also noted that the parties had stated at the organisational conference that they had no objection to the ICC tribunal’s jurisdiction; under Russian Supreme Court guidance, a party that continues without timely objection loses the right to raise the procedural complaint later.
Order
The court refused BRIMIUM’s request to stay the case and granted Baltalex an enforcement writ reproducing the monetary relief in the ICC award. It also ordered BRIMIUM to reimburse RUB 194,355 in state fees and directed that RUB 45 in overpaid fees be returned to Baltalex. The order states that a cassation appeal may be filed with the Arbitrazh Court of the Ural District within one month.
Related Reading on kdb.legal
A closely related kdb.legal post, “Is there a successful path for enforcement of an arbitral award in Russia?”, discusses a 2025 appellate decision involving an assigned claim originally held by an Estonian company. That court likewise rejected the proposition that the presidential decrees impose a general prohibition on assignments. The present decision adds a detailed examination of the assignment evidence and payment mechanism in the context of an ICC award.
We are ready to assist our clients with the enforcement of arbitral awards and court decisions both in Russia and Germany, contact us if you have any questions in this respect.
