Russia has signed the new 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters

On November 17, Russia signed the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “Convention”), becoming the fifth signatory of the Convention along with Uruguay, Ukraine, Israel and Costa Rica.

As we mentioned earlier, the Convention is aimed at unifying the legal framework for the recognition and enforcement of foreign court decisions on disputes of a private law nature (e.g. the non-performance or improper performance of contracts for the sale of goods, shareholder agreements). Please note that the Convention provides a list of disputes that fall outside the scope of its application. These are public law disputes (tax, customs, and administrative disputes) (see Article 1(1) of the Convention) as well as disputes covered by other conventions (family matters, maintenance obligations, insolvency, wills and succession, carriage of passengers and goods, etc.) or the unification of which is currently difficult (e.g. IP and antitrust disputes) (Article 2(1) of the Convention). In addition, the Convention provides the bases and procedure for the recognition and enforcement of foreign judicial acts (Articles 5, 6, 12, and 13 of the Convention) as well as grounds for a refusal to recognize and enforce them (Article 7 of the Convention).

Although Russia has signed the Convention, it will enter into force only 12 months after its ratification, acceptance or approval by, or the accession of, two contracting states (Article 28(1) of the Convention). To date, none of the signatories has ratified the Convention and it is unlikely that this will happen in the foreseeable future – signatory states may need several years to assess the feasibility and legal effects of ratifying the Convention.

In any event, the subsequent ratification of the Convention will not override the provisions of Article 241 of the Russian Commercial Procedure Code and Article 409 of the Russian Civil Procedure Code whereby an international treaty is required for the recognition and enforcement of a foreign court decision. Thus, the issue of whether judicial decisions from states that are not parties to the Convention should be recognized and whether there are bilateral or multilateral treaties with Russia remains highly relevant.

Nevertheless, Russia’s signing of the Convention is an important step towards a unified framework for a cross-border “turnover” of court decisions and towards strengthening the protection of Russian investors in foreign jurisdictions taking into consideration the lack of agreements for the mutual recognition of court decisions between Russia and a number of developed economies (e.g. the UK, Germany, the USA, and France). We hope that the Convention will attract a significant number of contracting states and will not suffer the fate of the 1971 Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, to which only five states are contracting parties to date, namely Albania, Cyprus, Kuwait, the Netherlands and Portugal.

 
Andrei Gusev
Managing Partner, Attorney-at-Law

+7 921 938 29 90
St. Petersburg

 
Anna Zabrotskaya
Partner, Attorney-at-Law

+7 921 951 39 18
St. Petersburg