A while ago we had reported on a decision of the Arbitrazh Court in St. Petersburg which had recognised a German court decision from Stuttgart on the basis of reciprocity – see here: Is there suddenly reciprocity regarding recognition of commercial judgements between Germany and Russia? – Koch Boës – Rechtsanwälte.

Not unawaited, this decision was overturned on appeal and referred back to the first instance with the clear mandate to consider that Germany is an unfriendly state, however, the question of reciprocity was not really put into doubt.

The full facts of the case are as follows:

Court: Arbitrazh Court of the North-West District, Russia
Date: April 1, 2025
Case No.: А56-49800/2024

General Summary

The Arbitrazh Court of the North-West District annulled a prior ruling of the St. Petersburg Arbitrazh Court which had recognized and granted enforcement to a 2021 judgment by the Stuttgart Regional Court (Germany) in favor of Viavi Solution Deutschland GmbH against the Russian company Wilcom SPb. The case was remanded for a new hearing due to insufficient reasoning on key legal and factual challenges raised by the Russian respondent, especially concerning the public policy exception and international sanctions.

Factual Background and Party Submissions

Viavi Solution Deutschland GmbH, a German company, sought recognition and enforcement in Russia of a Stuttgart court decision (No. 31 O 10/20 KfH of 27.05.2021), which ordered Wilcom SPb to pay approximately €85,515.17 and $68,411.70 plus interest and costs. The original claim arose from a commercial debt.

Wilcom SPb objected on several grounds:

  • The German judgment was allegedly against an individual (A. Lisunov) not proven to be an entrepreneur, hence not subject to commercial jurisdiction.
  • It questioned the principle of reciprocity amid geopolitical tensions and sanctions post-March 2022.
  • It claimed improper service under the 1965 Hague Service Convention.
  • It argued enforcement violated Russian public order, alleging no actual commercial dealings or import/export activities between the parties.

Viavi countered these objections, highlighting that Wilcom had listed Viavi as a partner on its website and was properly notified through authorized channels. As well, Wilcom was the proper defendant in both the German and Russian proceedings, Mr. Lisunov was just named as director of the company and not a party to the proceedings.

Legal Framework and Judicial Reasoning

The court applied:

  • Articles 241–242 of the Russian Arbitrazh Procedural Code (APC)
  • Article 15(4) of the Russian Constitution
  • Hague Service Convention (1965)

The cassation court emphasized:

  • The Stuttgart judgment clearly named Wilcom SPb, not an individual, as the defendant.
  • The argument against reciprocity lacked evidentiary support, as Germany was not a “hostile state” at the time of the German judgment.
  • Service of process via the Russian Ministry of Justice complied with Hague Convention requirements.

However, the court found that the first-instance court had not sufficiently addressed:

  • The claim of no factual business relationship between the parties.
  • The necessity to involve financial monitoring authorities under Russian anti-money laundering law (Federal Law No. 115-FZ), particularly in light of the risk of legalizing proceeds from hypothetical sham transactions.

Outcome

The cassation court annulled the decision recognizing and enforcing the German judgment. It referred back the case for a new hearing in a different composition of the first-instance court, directing it to:

  • Reassess the factual basis for the claimed business relationship.
  • Consider involving Rosfinmonitoring and other competent authorities.
  • Properly evaluate whether enforcement would contravene Russian public policy.

Commentary

The appeal decision does not really come as a surprise, however, a closer look at the reasoning is rather astonishing. The question of reciprocity between Germany and Russia is not reall put into question as the Stuttgart decision dates from 2021, thus, at a time before Germany was declared to be an “unfriendly” state by Russia. The only reason why this decision was sent back to the first instance fofr reconsideration was that it was not properly assesed whether the case might have been fabricated to circumvent foreign exchange/money laundering rules, not because reciprocity is put into doubt.
The next hearing of the first instance court is scheduled for 7 July 2025. The outcome is difficult to predict. Judging from the facts reported in the case file, it rather seems that the defences of the defendant are far fetched and that the court might confirm its earlier decision. However, it might still be that the mere fact that Germany is now considered “unfriendly” by Russia is sufficient to prevent the recognition of the judgement.
We’ll continue to monitor this case.