Recognition of Russian Judgments, Arbitrazh Courts and the Requirement for Reciprocity

Earlier this month, I had written about  the Russian Arbitrazh court’s judgment before the Munich Court of Appeals (Oberlandesgericht) – the Munich court held that a Russian Arbitrazh Court is not an arbitral tribunal, and its judgment can not be recognized as an arbitral award under the New York Convention. The question then was asked whether in the alternative, the judgment of the Aribtrazh Court could have been recognized in Germany as a judgment of a state court. My short answer was that it could not, for lack of reciprocity. But the status quo has now been challenged.

Currently, the position is follows: There are no bilateral or international treaties on recognition and enforcement of judgments that would be applicable between Germany and Russia. Thus, Sec. 328 German Code of Civil Procedure (ZPO) governs the recognition of foreign judgments; it requires reciprocity between Germany and the country of origin.  Since the same requirement applies in Russia, this lead into a dead end.

However, in the January/February 2013 issue of IPRax that just landed on my desk,  Wilfried Meyer-Laucke challenges this position. In his short article, Meyer-Laucke first shows that the current practice in Germany is indeed to deny recognition of Russian judgments for lack of reciprocity. But here is the game-changer: Meyer-Laucke reports a decision of the Arbitrazh Court in St. Petersburg of May 2008, in which the Russian court did recognize a decision of the Local Court (Amtsgericht) Frankfurt am Main in an insolvency matter. The author further refers to general statements of the Supreme Arbitrazh Court regarding the possibility of recognition of German judgments as a matter of comity, and to a December 2009 judgment recognizing a Dutch judgment in Russia. On that basis, he argues that in practice, Russian courts have started to recognize German judgments. In turn, German courts should, on that basis, be satisfied that the reciprocity requirement is met, and recognize Russian judgments.

I am not at all familiar with Russian law, and hence not in a position to judge whether Meyer-Laucke is correct, or overly optimistic, in his far-reaching conclusion, which is based on only one decision, that dealt with the recognition of a German court decision in an insolvency matter. Regarding the recognition of judgments from other (European) jurisdictions, Meyer-Laucke admits that German courts would give little weight to the position of Russia vis-à-vis other jurisdictions in establishing whether there is reciprocity.

Still, Meyer-Laucke raises a point that is well worth exploring: I would like to hear from readers whether they are aware of any Russian judgments on the  recognition of German -or, more generally speaking, foreign – judgments, whether these judgments support Meyer-Laucke’s pro-recognition standpoint, or not.

Whether German courts will follow the approach Meyer-Laucke suggests remains to be seen. Given volume of business between Russia and Germany, there certainly is a growing practical relevance to that question. The case law shows that attempts are being made by Russian parties to seek recognition of their domestic judgments in Germany – the application under the New York Convention made to the Munich court is just one creative example.

True, there is a certain amount of scepticism in the German legal community and certainly also amongst judges about Russia’s judiciary. However, any allegations that the Russian proceedings violated due process must be discussed on a case by case basis. The recognition procedure under Sec. 328 ZPO does provide for sanity checks. Prejudice should thus not stop the recognition of Russian judgments, if the reciprocity test has been satisfied. And even if statements by Anton Ivanov, the Chief Justice of the Supreme Commercial Court of the Russian Federation, about “unfair competition” from foreign courts and their disregard of Russia’s sovereignty at the St. Petersburg International Legal Forum last year did not sound terribly pro-recognition of foreign judgments, attitudes in both jurisdictions may change.

Meyer-Laucke, Zur Anerkennung russischer Urteile auf dem Gebiet des Wirtschaftsrechts”, IPRax 2013, 94. Large parts of the decision of the St. Petersburg Arbitrazh Court are quoted verbatim, in a German translation, in the article. Wilfried Meyer-Laucke is a presiding judge (Vorsitzender Richter) at the District Court (Landgericht) Dortmund. 

 

 

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2 thoughts on “Recognition of Russian Judgments, Arbitrazh Courts and the Requirement for Reciprocity

  1. Russian commercial courts have developed a consistent jurisprudence for the enforcement of English court judgments. This is based partly on comity and reciprocity – which gives rise to the chicken and egg problem you have outlined, and is resolved in regard to England by the fact that Russian court judgments are enforceable there by virtue of common law without a requirement for reciprocity. This is also, however, based on the Economic Cooperation Treaty between Russia and the UK 1992, the Partnership and Cooperation Treaty made in 1994 between Russia and EU member states and the European Convention on Human Rights. Russian Courts have interpreted the Treaties’ requirements of non-discrimination and national regime of access to court in conjunction with the Convention’s ‘right to fair trial’ as an obligation on Russia to allow enforcement of English judgments. This jurisprudence originally arose out of the Yukos affair in 2006, at which time it was unprecedented and clearly politically motivated, but it continues to be applied and English judgments are getting enforced on that basis.

    Since Germany is party to the 1994 Treaty with Russia and party also to the ECHR, by parity of reasoning there is a case for seeking enforcement of German court judgments in Russia. I have not seen a reported case ordering enforcement of a German judgment but I have seen a 2009 case in which the Russian Supreme Court denied enforcement despite reference of the applicant to the 1994 Treaty. This was not a commercial court judgment, though. A commmercial court denied enforcement of a Berlin court judgment in 2005 specifically by reason of absence of evidence that Russian court judgments have been enforced in Germany, but this was before 2006 when the jurisprudence discussed above started to develop. I’d say one could try again now.

  2. Pingback: Israeli Court Recognizes a Russian Judgment on the Basis of Reciprocity | CIS Arbitration Forum

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