From Russia With Love – Foreign Courts, Arbitration and Protectionism at the St. Petersburg International Legal Forum

Russia is apparently planning to protect Russian enterprises and citizens from the interference of foreign court and arbitration tribunals. In Legal Tribune Online today, Christine Heeg and Thomas Weimann report on a rather astonishing speech to that effect, delivered by Anton Ivanov, Russia’s most senior commercial judge, at the St. Petersburg International Legal Forum 2012 last month. 

Ivanov, the Chief Justice of the Supreme Commercial Court of the Russian Federation, complained about “unfair competition” from foreign courts and arbitration institutions, and their disregard of Russia’s sovereignty. As examples, he cited an anti-suit injunction issued by the High Court in London in favour of BNP Paribas against Oleg Deripaskar’s company, Russian Machines, in support of LCIA arbitration (BNP Paribas SA v Open Joint Stock Company Russian Machines and another [2011] EWHC 308 (Comm)) and the German Sedelmayer case. Sedelmayer had won an award for damages under the Germany/USSR BIT in Stockholm arbitration, and subsequently enforced the award in Germany by seizing real estate previously used by the KGB.

Ivanov said that in order to prevent such incidents from happening in the future, “punitive sanctions” were required. Those involved in such activities, both parties and others such as foreign law firms practicing in Russia, should be denied entry into Russia and their Russian assets should be seized. Russian courts should be given the power to set aside foreign judgments or arbitral awards, and to decide on the merits.

Heeg and Weimann report that Ivanov’s statements were supported by Russian Prime Minister Medvedev – a lawyer by training – and representatives of the Russian bar. Kenneth Clarke, the British Secretary of State for Justice, to the contrary, stressed the importance of the rule of law for Russia’s ability to attract investors. I think it should be obvious that Russia would violate the New York Convention, and other treaties, if the measures outlined in Ivanov’s speech were to be implemented.

RAPSI, the Russian Legal Information Agency, has covered the speech in detail  and followed up with report of the position of the Russian Federal Chamber of Lawyers. Certainly a development that will be interesting to see evolving in the months and years to come.


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