The Moscow Arbitrazh Court recognised a Dutch court decision based on the principle of reciprocity, although no treaty on recognition and enforcement of state-court judgements is in place between the Netherlands and Russia (Moscow Arbitrazh Court, Judgement of 19.06.2019, A40-68312/2018).
Background to the case
Stichting Administratiekantoor Nems trust foundation (Netherlands) obtained a judgement against a Russian debtor under a share purchase agreement in the District Court of Amsterdam.
As the debtor went into bankruptcy the dutch foundation applied to the Arbitrazh Court of first instance in Russia to include its claims in the Creditor’s Claims Register. The courts of first and appellate instance recognized the decision of the District Court of Amsterdam in respect of the debtor and included the claims in the Register.
Position of the court on the disputed issue
The Dutch decision was not a decision resulting from insolvency proceedings. Despite this fact, the Arbitrazh court made reference to Art. 1 (6) of the Russian law on insolvency proceedings. This provision states that foreign insolvency decision are recognised in Russia on the basis of reciprocity. In this case, the court may have been mislead by this provision and applied the principle of reciprocity to the question of a „usual“ payment judgement.
According to the provision of the Article 1 (6) of the Russian Federal Law “On insolvency (bankruptcy)”:
“The foreign court judgments in the insolvency (bankruptcy) cases shall be recognized in the territory of the Russian Federation in compliance with the international agreements of the Russian Federation.
In absence of the international agreements of the Russian Federation the foreign court judgments in cases on insolvency (bankruptcy) shall be recognized in the territory of the Russian Federation on the basis of reciprocity unless otherwise is provided for by the federal law.“
The courts indicated that the absence of an international treaty on the mutual recognition of judical decisions between the Russian Federation and the Kingdom of the Netherlands itself was not a sufficient ground to refuse recognition. So in this case the decision shall be based on the principle of reciprocity. As evidence of reciprocity, the Foundation has submitted to the Court of First Instance a judicial act from the city of Amsterdam (С/13/653973/KG, ZA 18-953, CdK/JvS), which took into account the claim to the debtor based on the decision of the Nikulinsky City Court of Moscow. The creditor also presented precedents of the Supreme Court of the Russian Federation, according to which the Supreme Court of the Russian Federation establishes the reciprocity between the Russian Federation and the Kingdom of the Netherlands.
It might not be possible to draw any general conclusion from this decision as it was rendered in the context of insolvency law. However, Russian case law where foreign judgments are recognized regardless of the absence of bilateral treaties specifically providing for their recognition is generally building up. During the past couple of years the courts in Russia have upheld the recognition of foreign judgments or at least follow the same line of reasoning on at least two other occasions (see Arbitrazh Nortwestern Court, Judgement of 06.05.2019, A56-81157/2015 enforcing a judgement of an English Court and Moscow City Court with the same argumentation of 10.04.2019 in 33-14092/2019).
In March 2020 the Moscow Arbitrazh Court refused to recognize a judgement of a Belgian court citing lack of international treaties with Belgium. No consideration whatsoever was given to granting recognition on the basis of the principle of reciprocity. The word „reciprocity“ does not appear even once in the decision.
Russian case law in this field therefore remains unclear und inconsistent. Whereas the situtation with regard to Belgian and Dutch decisions should be the same, they were treated differently. The reason in this case may be the insolvency context of the Dutch decision which may have mislead the Arbitrazh court to apply the principle of reciprocity, however, it seems an overinterpretation to assume that this would apply to all Dutch decisions seeking to be enforced in Russia.