A DIS (German Arbitration Institute) arbitration award was granted to recover damages from International Recycling Pte. Ltd. (Singapore) and Intervtorresurs Limited Liability Company (Russia). The claimant applied for recognition and enforcement to the court at the location of the Russian respondent.
On the first circuit, the judgment was enforced, but was overturned by the court of cassation citing a breach of public policy. The full details of the decision and the case can be found here: Russian Cassation Court of North-Western Region orders first instance to undertake révision au fond (kdb.legal). The reasoning of the Cassation Court of North-Western Region sounded like an invitation to undertake a révision au fond.
At the second round, the first-instance court refused to enforce the award, made reference to the reasoning of the cassation court and found errors in the application of the law, which, according to the first instance court, amounted to a violation of public policy. The first instance court decision can be found here.
Recently, on the 29.04.2021 the Court of Cassation stated that the first-instance court had in fact revised the arbitral award on the merits, which was inadmissible. The cassation court sent the case for a new examination:
“Since the contested ruling was adopted without taking into account the explanations of the Supreme Arbitration Court of the Russian Federation and the Supreme Court of the Russian Federation on the inadmissibility of a broad interpretation of the concept of public policy, the court’s conclusions amounted to a review of the foreign court’s decision on the merits.
This does not fall within the competence of an arbitration court, so the cassation instance cannot recognize the challenged judicial act as justified and lawful, in connection with which it must be cancelled and the case must be sent for a new examination.”
(A56-131886-2019_20210429_Postanovlenie_kassacionnoj_instancii.pdf (arbitr.ru))
Conclusion
This is indeed a reassuring decision since the previous one of the same court from November 2020 looked more as an invitation for a “revision au fond”. It finally does offer an optimistic outlook on Russian court practice in respect of recognition and enforcement of foreign arbitral awards in Russia. However, it also shows that there is still a lot of uncertainty in respect of the understanding of “public policy” and its interaction with the interdiction of a “révision au fond”.