1. EVIDENCE GATHERING IN RUSSIA

I. Introduction

The growing internationalization of Russian economy creates greater potential for Russian courts and arbitration tribunals to resolve disputes or participate in the resolution of disputes involving "foreign element" These cases may involve disputes with foreign parties in Russia as well as disputes abroad with participation of Russian party in which evidence or witnesses are located in Russia. The litigants are then faced with the task of obtaining evidence in Russia to be used in foreign proceedings.

This overview is intended to discuss:

- devices available to litigants for taking evidence in Russia for use in the oversea proceedings and
- certain features of the rules of gathering evidence applicable in Russian proceedings, which might be peculiar to the foreign legal practitioners.

II. Evidence Gathering in Russia for overseas proceedings

2.1 Legal Standard

- Art. 256 of the RF Arbitration Procedure Code
- Art. 407 of the RD Civil Procedure Code
- The Hague Convention on Taking of Evidence Abroad in Civil and Commercial Matters of 1970
- The Hague Convention on the service abroad of judicial and extrajudicial documents in civil or commercial matters of 1965
- Hague Convention on Civil Procedure of 1954

Where the evidence is located abroad, for instance in Russia, the powers of a judge are limited by the foreign judicial sovereignty. The solution to this problem was provided by the international conventions. Foreign litigants may obtain evidence in Russia pursuant to Art. 256 of the RF Arbitration Procedure Code and Art. 407 of the RD Civil Procedure Code both referring to international treaties.

The request may be made by way of letter of request pursuant to the Hague Convention on Taking of Evidence Abroad in Civil and Commercial Matters of 1970 and Hague Convention on the service abroad of judicial and extrajudicial documents in civil or commercial matters of 1965. The respective provisions of this Hague Convention of 1970 and Hague Convention of 1965 substitute and extend the relevant provisions of the Hague Convention on Civil Procedure of 1954. Russia has joined the Hague Conventions of 1970 and 1965 on 05 of May 2001.

2.2 Taking evidence through convention requests

Russian arbitration courts shall execute requests of foreign courts and of competent bodies of foreign states for the performance of the individual procedural actions (such as handing in the summons and the other documents, obtaining written-proof, carrying out an expert examination or inspection on the spot, etc.) passed to it in accordance with the procedure established by an international treaty.

The procedure for the processing of letters of requests under the Hague Evidence Convention of 1970 is relatively simple because it does not require transmission through diplomatic channels. Foreign court would need to transmit the letter of request directly to the RF Ministry of Foreign Affairs, which is the designated Article 2 Central Authority.

The RF Ministry of Foreign Affairs would forward the letter to its appropriate office in the district where the court is located.

The relevant office of the RF Ministry of Foreign Affairs would then attempt to obtain sought evidence voluntarily. If the person does not comply, the RF Ministry of Foreign Affairs would request the court to provide necessary means of compulsion in a form of subpoena [vyzov svidetelya]. Failure to comply with subpoena could be punishable.

The Convention permits the issuing court to request notification of the place and time of taking of evidence in order to permit parties to attend the procedure. This information may be sent directly to the parties or their counsel. The requested evidence is returned back to the foreign court in the same manner as the letter of request.

Although the Convention eliminates the involvement of diplomatic channels, the procedure is still quite cumbersome and time consuming.

2.3 Taking evidence through requests on the basis of international courtesy principle

In the absence of treaties it is also possible to file with the RF Ministry of foreign affairs a request on the basis of international courtesy principle (courtoisie internationale). However, the procedure for rendering such legal assistance is not fixed. Voluntary basis of such legal assistance implies that it is at the sole discretion of the Russian authorities to decide whether to respond to the request or not and to define the time frames for the response. Therefore, this way of obtaining evidence is relatively ineffective.

2.4 Ground for refusal to execute requests

A request of the foreign court or of the competent body of a foreign state shall not be executed, if:

(1) the execution of the request violates the fundamental principles of Russian law or in any other way goes against the public order of the Russian Federation;
(2) the execution of the request is out of the scope of the competence of the arbitration court in the Russian Federation;
(3) the authenticity of the document containing the permission for the performance of individual procedural actions, is not established.

2.5 Taking evidence through provisional and protective measures

In Russia pre-litigation measures may be used for the purpose of obtaining evidence.

In certain cases, for instance, in the domain of protection of intellectual property the key issue is to act by surprise and rapidly so as to find the counterfeiting goods and to prevent damages.

For this reason one of the most powerful and useful way to obtain evidence are provisional measures allowing the holder of the right to enter without warning the premises of the alleged infringer and seize the infringing goods, even before the commencement of the procedure on the merits (Art. 50 of the RF Law on Copyright and Related Rights).

Therefore, for the purpose of obtaining evidence for overseas proceedings a claim may be filed with the Russian court to enforce the use of provisional measures.

In order to prevent an abusive use of measures, the order of measure may be subject to the lodging by the applicant of adequate security or equivalent assurance in order to secure possible prejudice suffered by the defendant due to unfounded application of measures.

Peculiarities of application of provisional measured in Russia will be considered further in more detail.

III. Evidence Gathering in Russian proceedings

3.1 Legal Standard

- Art. 66, 255 of the RF Arbitration Procedure Code
- Art. 57 of the RD Civil Procedure Code.
- Art. 6 of the RF Law on Advocate Activities and Advocacy in the RF.

3.2. Main Features of the Russian procedural system of gathering evidence

Russian procedural system has some fundamental differences with common-law systems. The significant differences between Russian and common-law systems with regard to evidence gathering can be summarized as follows:

(1) Discovery.

The judge in civil-law systems, rather than the advocates in common-law systems, has primary responsibility for development of the evidence and articulation of the legal concepts that should govern decision.

At any phase of the proceedings subsequent to the initial exchange of extensive written statements, the judge may request to take evidence, even abroad, and he may await the execution of the request before continuing with proceedings.

(2) Presentation of evidence.

Pursuant to Russian procedural system the evidence is developed by the judge with suggestions from the advocates, while in the common-law tradition the evidence is presented by the advocates with supervision and supplementation by the judge.

Civil-law litigation in civil law systems proceeds through a series of short hearing sessions – sometimes less than an hour each – for reception of evidence, which is then consigned to the case file until an eventual final stage of analysis and decision.

To the contrary, a common law “trial”, once started, cannot be interrupted, except in very rare circumstances. Therefore all evidential material needed for the trial must have been collected prior to it, so as it can be submitted to the judge. Therefore common-law litigation has a preliminary or pretrial stage (sometimes more than one) and then a trial at which all the evidence is received consecutively. For instance, American rules of discovery give wide latitude for exploration of potentially relevant information and evidence, including through oral deposition.

More fundamentally, the basic conception of the plenary hearing in the civil-law system has been that of an inquiry by the judge that is monitored by advocates on behalf of the parties, while the conception of a trial in the common-law systems is that of juxtaposed presentations to the court by the parties through their advocates.

In more pragmatic terms, the effectuation of these different conceptions of the plenary hearing requires different professional skills on the part of judge and advocates. An effective judge in the civil-law system must be able to frame questions and pursue them in an orderly series, and an effective advocate must give close attention to the judge’s questioning and be alert to suggest additional directions or extensions of the inquiry.

In the common-law system the required skills are more or less the opposite. The common-law advocate must be skillful at framing questions and pursuing them in orderly sequence, while the judge must be attentive to pursuing further development by supplemental questions. However, these differences are ones of degree.

(3) Reexamination

A civil-law judgment in the court of first instance is generally subject to more searching reexamination in the court of second instance than a common-law judgment.

Reexamination in the civil-law systems extends to facts as well as law. Reexamination might take place when there may be some reason to think that a different result could be achieved, for instance, when there is a showing of fraud in the proceeding or of conclusive evidence that was previously undisclosed and not reasonably discoverable at the time, etc.

These differences are rooted in the different organization of the civil procedure, the scope of the powers of the judge to control the investigation and divergent techniques of taking of oral testimony.

3.3 Depositions.

In contrast to the American procedural system where a wide-ranging pretrial discovery is an integral part of civil litigation, in Russian jurisdiction, pretrial depositions are unusual.

In Russia documents are subject to discovery primarily when relevant to the proceeding. Relevance for this purpose is defined by reference to the pleadings and the rules of pleading require full specification of claims and defenses. A party has a right to request the court to interrogate a witness or to require the opposing party to produce a document. This arrangement is a corollary of the general principle in the civil-law system that the court rather than the parties is in charge of the development of evidence.

The Russian procedural law does not provide for compulsory pre-trial depositions.

Voluntary depositions are possible, since the law does not prohibit anyone from taking or giving voluntary statements, regardless of nationality of the witness, provided that the information contained in the statement is not a state secret and will not adversely effect the state’s institutional or individual interests. Russian law does not specifically regulate the procedure by which such voluntary depositions are obtained. Voluntary statements are recognized as “written evidence” regardless of the presence or absence of an attorney during the testimony process. However, such statements yield to the testimony given at the hearing: a witness must testify in person before the court on all matters including those covered by his statement wherever this is feasible. All witnesses and expert witnesses are heard and questioned during a trial before the court in accordance with provisions of the chapters 6 and 15 of RF Civil Procedure Code and chapters 6 and 12 of RF Arbitration Procedure Code.

In case where a danger exists that it will be impossible to interrogate the witness in the forthcoming litigation, a procedure of “securing” the evidence by the notary may be employed (Art. 102, 103 of the Fundamentals of Legislation on Notarial Activity of 11 February 1993 No. 4462-1). In such a case the questioning of witness is carried out in the presence of all parties concerned which are summoned to participate in such proceedings. Examination of a witness is carried out pursuant to the rules provided for examination of witnesses in a courtroom under the Civil Procedure Code. A printed record of a testimony is prepared which is signed by the witness and certified by a notary.

The procedure of securing the evidence may be conducted only for future legal proceedings. The notary may not secure evidence relevant to existing legal proceedings pending before the court. In such ensuing actual proceedings the court may make a recourse to such records only in case where it is impossible to examine the witness in person.

3.4 Discovery.

3.4.1 General Principle

As a general rule disclosure of sources of proof is required before the plenary hearing. These requirements presuppose that a claimant properly may commence litigation only if the claimant has a provable case and not merely the hope or expectation of uncovering such a case through discovery from the opposing party. A party generally must show its own cards, so to speak, rather than getting them from an opponent. However, a Russian civil-law judge has also authority to compel presentation of relevant documentary evidence and testimony of witnesses.

3.4.2 Requests for production of evidence

In a litigation, a party may obtain the evidence in possession of third persons by requesting a court order (subpoena) (Art. 66 Arbitration Procedure Code, Art. 57 Civil Procedure Code).

A judge preparing the hearing on a civil case doesn’t have the right to perform pre-trial activities to collect and secure evidence at his own initiative. His functions during this stage are limited to the following: clarifying for parties a right to submit evidence, ascertaining whether they have all the evidence needed and assisting in collecting additional evidence. These activities may include interrogation of the plaintiff and defendant and issue of subpoenas to third parties.

In some civil-law systems, a party cannot be compelled to produce a document that will establish its own liability – something like a civil equivalent of a privilege against self in crimination. But this is not the case for Russia. In Russian law systems a party may be compelled to produce a document, in particular, in case when the judge concludes that the document is the only evidence concerning the point of issue.

3.4.3 Privileged Information. Attorney-client privilege

Privileged matters are not a proper subject for discovery. For example, a person cannot be forced to disclose confidential communications regarding matters that come within the attorney-client privilege. Discovery cannot be obtained to compel a person to reveal information that would violate his or her constitutional guarantee against self- incrimination.

The attorney-client privilege protects communications between attorney and client made for the purpose of furnishing or obtaining professional legal advice or assistance (Art. 8 of the RF Law on Advocate Activities and Advocacy in the RF).

This privilege that permits an attorney to refuse to testify as to communications from the client though it belongs to the client, not the attorney, and hence the client may waive it. The privilege does not apply to communications between an attorney and a client made to further a fraud or crime. The responsibility for designating which information should remain confidential rests with the client. In its most common use, however, the attorney claims the privilege on behalf of the client in refusing to disclose to the court or any other party requested information about the client's case.

The attorney-client privilege may be sought provided that:

1) first, the person asserting the privilege must be a client, or must have sought to become a client at the time of disclosure;
2) second, the person connected to the communication must be acting as a lawyer;
3) third, the communication must be between the lawyer and the client exclusively—no non-clients may be included in the communication;
4) fourth, the communication must be for the purpose of securing a legal opinion, legal services, or assistance in some legal proceeding, and not for the purpose of committing a crime;
5) fifth, the privilege may be claimed or waived by the client only (usually, as mentioned, through counsel).

The privilege remains an exception to the general rule that individuals must testify to all facts within their knowledge.

3.4.4 Processing requests for production of evidence

The procedure of discovery of evidence in practice works as follows. There is no penalty for the failure of a party to a lawsuit or any other person to satisfy subpoena for production of documents or other pieces of evidence made by a party to a lawsuit itself. A party willing to obtain a piece of evidence which is in the possession of the other party or third persons must make a motion. The motion sets out the reasons why a party could not obtain the evidence itself, location of the evidence and circumstances can be confirmed or disproved by these evidence. Application can be considered by a court at the stage of preparation for the trial or during the trial itself. Copies of this application should be forwarded to the participants of litigation and to that person who possesses the evidence requested. Commercial courts have discretion to collect evidence at his own initiative only if it refers to administrative or public legal relations and state (municipal) bodies refuse to provide evidence themselves.

Written evidence requested by court from the other party shall be forwarded directly to the court or to the claimant, if the judge has allowed the moving party to receive a document for subsequent transfer to the court.

3.4.5 Refusal to Respond

RF law stipulates liability for failure to fulfill the court’s request to produce the evidence in question. If the party does not inform the court about the reasons for the impossibility of presenting written evidence or if the reasons for failing to give evidence were not respectful, the party becomes liable for a penalty. In case of subsequent violations of the same kind the penalty is increased twofold.

3.4.6 Costs

A party who makes a motion for a court to order discovery may be required to pay or make provision for payment of costs—expenses incurred in obtaining discovery when it is granted. If the party eventually wins the lawsuit, the court may demand that the costs be paid by the adversary in the proceedings.

3.4.7 Advocacy Requests

Rules compelling production of evidence are included in some other laws as well. Such rules are usually restricted to particular types of evidence in possession of a defined category of persons. For instance, the RF Federal Law “On Activity of Advocates and Advocatura in RF” of 28 October 2003 (Art.6) provides that an advocate has the right to submit requests for production of documents to state bodies and public organizations, which are obliged to furnish such documents.
The recipient of the advocacy request shall give an advocate a written response within one month from filing the request.

3.4.7 Gathering Documents of a Foreign Origin

Requirement of legalization or placing of an apostille

Documents, issued, compiled or certified in accordance with the established form by the competent bodies of foreign states out of the boundaries of the Russian Federation in conformity with the norms of foreign law with respect to Russian organizations and citizens, or to foreign persons, shall be accepted by arbitration courts in the Russian Federation, if said documents are legalized, or if an apostille is placed on them pursuant to Hague Convention of 1961, unless otherwise is established by an international treaty of the Russian Federation.

For instance, according to special provisions of the CIG Convention on Legal Assistance of 1993 the documents originated from other CIG countries may be submitted to the Russian courts not being neither legalized nor apostilled.

Requirement of translation

When presented to the arbitration court in the Russian Federation, documents compiled in a foreign language shall be accompanied with a properly certified translation thereof into the Russian language.

3.5 Interrogation of witnesses.

Witnesses called before the Russian courts may be questioned by all the parties to the proceeding. The judge may also interrogate witnesses, although the civil process in Russia is adversarial rather than inquisitorial.

A person who applies for summoning a witness shall be obliged to indicate what circumstances significant to the case may be confirmed by the witness and to report to the court on his surname, first name and place of residence.

As a general rule a witness shall report data known to him in oral form. On the proposal of the court a witness may state in writing testimonies reported orally. Testimonial evidence stated in writing shall be attached to the materials of the case.
Such discovery device as interrogatories, i.e. specific written questions submitted by a person, pursuant to a discovery order, to an adversary who must respond under oath and in writing, are not recognized by Russian law.

Witnesses are required to attend and give evidence at a hearing and a fine may be imposed on a witness who fails to attend a court hearing. If a witness refuses to testify in court, criminal proceedings may be initiated against him or her on the basis of the Criminal Code (Art. 88 of the RF Arbitration Procedure Court).


2. RELIEF

2.1. Enforcement of foreign orders on security measures in Russian Federation

No Conventions, no treaties:

At the present time there are no Conventions, Treaties, Laws in Russia that authorize Russian courts to enforce security measures regarding assets, located in RF, or restraining orders at the request of foreign Courts.

Regulating provisions:

- Chapter V of the Arbitration Procedural Code of Russian Federation of 14 July 2002 (hereinafter – APC of RF)

- Resolution of the Plenary Session of the Supreme Arbitration Court of the Russian Federation of 12 October 2006 No. 55 “On the application by the arbitration courts of interim measures”

This Resolution says that foreign orders on security measures should not be enforced in Russian Federation as under APC of RF only court decisions on the merits can be recognized and executed in RF.

So, security measures regarding assets, situated in RF, or restraining orders concerning persons, living in Russian Federation, can be granted only by Russian courts.

2.2. Possibilities for security measures in Russian Federation

a. to file an application for security measures on the ground of the pending international arbitrage proceedings in foreign jurisdiction (either a permanent commercial tribunal or ad hoc)

Legal grounds: Russian Law on International commercial tribunal, dated 7 July 1993 (articles 1, 9), APC of RF (article 90).

Place to file:

Security measures may be taken by an arbitration court of RF upon the application of a party to an arbitrage procedure:

- at the location of a commercial tribunal, or
- at the location or place of residence of the debtor, or
- at the location of the debtor's property.

b. to file a claim in Russian arbitration court together with (or followed by) a motion on interim relief

Legal grounds: articles 90-92 of APC of RF

Time to file:

An application for securing a claim may be filed with an arbitration court simultaneously with a statement of claim or in the course of proceedings concerning a case prior to the adoption of a judicial act terminating the consideration of the case on its merits.

c. to file a motion on preliminary security measures

Legal grounds: articles 99 of APC of RF

Time to file:

An arbitration court, on the application of an organization or a citizen, is entitled to take preliminary security measures aimed at securing the property interests of the applicant prior to filing a claim.

Place to file:

An application for securing property interests should be filed with an arbitration court:

- at the location of the applicant, or
- at the location of monetary assets or other property in respect of which the applicant solicits for taking measures aimed at securing property interests, or
- at the location of violating the applicant's rights.

Details of a ruling:

An arbitration court issues a ruling which establishes the time period, not exceeding fifteen days as of the date of issuing the ruling, for filing a statement of claim with regard to the claim in whose connection the court has taken measures for securing the property interests of the applicant.

Failure to file a statement of claim in due time will lead to cancellation of security measures.

Place to file a statement of claim:

- court which delivered an order on security measures or
- another court with due jurisdiction. In this case claimant should notify the court which passed the order on filing of the claim.

2.3. Statutory provisions on security measures:

Reasons for interim relief in all abovementioned cases, item 2.2 (a) – (c), under article 90 of APC of RF:

Security measures are allowed at any stage of arbitration proceedings, if failure to take these measures:

(i) may impede or make impossible the execution of a judicial act, as well as
(ii) for the purpose of preventing the infliction of extensive harm to the applicant.

Forms of security measures (article 91 of APC of RF)

APC provides for non-exhaustive list of forms of security measures:

For example,

1) arresting monetary assets or other property possessed by the respondent and kept by him or other persons;
2) forbidding the respondent or other persons to commit certain actions concerning the subject of the dispute;
3) placing on the respondent the duty to commit certain actions for the purpose of preventing damage to, or deterioration of the condition of, disputable property;
4) transfer of disputable property to the claimant or other person for keeping custody thereof;

An arbitration court may take several security measures simultaneously.

NB Security measures have to be proportional to the demands made.

Content of the application for interim relief (article 92 APC RF):

In an application for securing a claim there has to be indicated the following:
1) the name of the arbitration court to which the application is filed;
2) names of the claimant and respondent, location or place of residence thereof;
3) the point at issue;
4) the amount of property claims;
5) substantiation of the reason for filing an application for securing the claim;
6) security measures the claimant requests be made;

In case the application if filed to secure the claim being considered in a commercial tribunal abroad in the attachment there should be:

- a copy of the statement of claim certified by the chairman of a permanent arbitration tribunal, which is taken over by the arbitration tribunal, or
- a copy of such application certified by a notary and a copy of a properly certified arbitration agreement.

Payment of a state duty

A document confirming the payment of state duty is to be enclosed to an application. Now this duty amounts to 1000 RUR. It is approx 40 dollars US.

Procedure for Considering an Application for Securing a Claim

- an application for securing a claim is to be considered by a court trying the case at the latest on the day following the day of receiving the application by the court without notifying the parties
- an application for securing a claim is considered by a single judge
- there may not be a refusal to secure a claim where the person applying for securing the claim provides counter securing.

Counter securing is a way to secure the reimbursement of the respondent's possible losses by way of entering into a deposit account of the court monetary assets or by way of providing a bank guarantee, pledge or other financial guarantee in a necessary amount (amount of the claim).

3. Remedies

3.1. Fundamentals for enforcement of foreign judgments in Russian Federation

- The decisions of courts of foreign states passed on disputes and on other cases arising in economic activity (foreign courts), the decisions of international commercial arbitrages adopted on the territory of foreign states on disputes, arising on the territory of foreign states during the performance of economic activity (foreign arbitrage decisions), are recognized and executed in the RF by the state arbitration courts, if the recognition and the execution of such decisions is envisaged in an international treaty of the Russian Federation or in federal law.

Russian Federation as a party to New York UNO Convention on recognition and execution of foreign arbitrage decisions of 10 June 1958 is obliged to recognize and execute arbitrage decisions of parties to a Convention (there 126 of them now). This Convention is universal.

BUT in relation to decisions of foreign state courts there is no such a Universal Convention for the moment. So, there is no obligation of a Russian court to recognize and execute foreign court decision unless one of the following exists:

- special treaty between RF and a country where decision was made
- reciprocity, i.e., if Russia’s courts decisions are executed on the territory of a state whose court has made a decision (this should be considered according to a courtesy principal which is stipulated in article 15 of Constitution of RF)

For example, Moscow district arbitration cassation court refused to recognize a decision by Higher Berlin State Court, because:
- there is no bilateral treaty between RF and Germany on this kind of issues
- court has not found out cases in which Russian state arbitration court decisions were recognized in Germany

NB Where the application of a foreign law depends on reciprocity such a reciprocity is deemed to exist unless the contrary is proven (article 1189 of Civil Code of RF).

For example, in another case Russian arbitration court refused to recognize a decision by State Court of Oslo (Norway), because:

- there is no bilateral treaty between RF and Norway on this kind of issues
- a party to the case (debtor) produced a reference from Ministry of foreign affairs of Norway proving that Russian courts’ decisions had never been executed in Norway

3.2. Motion on enforcement of foreign judgment before the court

Legal grounds: article 242 of APC RF

The questions of recognition and execution of a decision of a foreign court/foreign arbitrage decision are resolved by the arbitration court on the application from a party in the dispute considered by the foreign court /or from a party in international commercial arbitrage.

Place of filing

An application for the recognition and execution of a decision of a foreign court or of a foreign arbitrage decision is to be filed by the party in the dispute, in favor of which the decision was taken (hereinafter - the "exactor"), to the arbitration court of the subject of the Russian Federation:
- at the debtor's place of stay or of residence or,
- if the debtor's place of stay or of residence is unknown, at the location of the debtor's property.

The content of the application

In the application it should be indicated:
1) the name of the arbitration court to which the application is lodged;
2) the name and location of the foreign court, or the name and composition of the reference tribunal or of the international commercial arbitrage, and its location;
3) the name of the executor and his place of stay or of residence;
4) the name of the debtor and his place of stay or of residence;
5) information on the decision of the foreign court or on the foreign arbitrage decision, for the recognition and execution of which the exactor applies;
6) the executor 's application for the recognition and or execution of the decision of the foreign court or of the foreign arbitrage decision;

Attachment to the application for the recognition and execution of decision of a foreign court

1) a properly certified copy of the decision of a foreign court or of the foreign arbitrage decision, for the recognition and execution of which the exactor applies;
2) a properly certified document, confirming the entry of the decision of a foreign court into legal force, unless this is indicated in the text of the decision itself;
3) a properly certified document confirming that the debtor was duly and in the proper form notified about the case investigation in the foreign court, for the recognition and the execution of whose decision the exactor applies;
4) a document, duly certified and confirming the powers of the person who has signed the application to the arbitration court;
5) a document confirming that a copy of the application for the recognition and the execution of the decision of the foreign court is forwarded to the debtor;
6) a properly certified translation into the Russian language of the documents mentioned in Items 1-5 of the present part.

Attachment to the application for the recognition and execution of a foreign arbitrage decision

1) a properly certified original of the foreign arbitrage decision or its properly certified copy;
2) the original of the agreement on the tribunal procedure, or its properly certified copy;
3) a properly certified translation into the Russian language of the documents mentioned in Items 1 and 2 of the present part.

Payment of a state duty

A document confirming the payment of state duty is to be enclosed to an application. Now this duty amounts to 1000 RUR. It is approx 40 dollars US.

3.3. Procedure for an Investigation of an Application for the Recognition and the Execution of the Decision of a Foreign Court or of a Foreign Arbitrage Decision

Term

An application for the recognition and execution of the decision of a foreign court and of the foreign arbitrage decision is considered in the court session by the judge on his own within a time term, not exceeding one month as from the day of its arrival at the arbitration court.

Participation of parties

The arbitration court notifies the persons taking part in the case about the time and place of the court session. Non-appearance of the said persons, duly notified about the time and place of the court session, is not an obstacle to an examination of the case.

Grounds to refuse recognition and execution of foreign state courts’ and arbitrage judgments (article 244 APC RF)

1. For arbitrage decisions - those, stipulated in New York Convention on recognition and execution of foreign arbitrage decisions of 10 June 1958 and
2. Certain grounds, specially stipulated in bilateral and regional treaties to which Russia is a party
3. Certain grounds, specially stipulated in APC of RF, i.e.

- there exists an enforced decision of a court in the Russian Federation passed on a dispute between the same persons on the same object and on the same grounds;
- under consideration of a court in the Russian Federation there is a case on a dispute between the same persons, on the same object and on the same grounds, the legal proceedings on which were initiated before the institution of the action at law on the case in the foreign court, if the court in the Russian Federation was the first to accept for its proceedings an application on the dispute between the same persons, on the same object and on the same grounds;
- the term of limitation for the execution of the decision has expired, and this term was not restored by the arbitration court for any reasonable excuse;
- in conformity with an international treaty of the Russian Federation or with a federal law, the investigation of the case is referred to the exclusive competence of the court in the Russian Federation,

Exclusive competence of RF covers the following disputes

1) concerning property in state ownership of the RF,
2) whose object is immovable property, if this property is located on the territory of the RF, or the rights to it;
3) regarding registration of rights to results of intellectual activity, which require the registration or issue of a patent or of a certificate in the RF;
4) on recognizing as invalid entries in state registers, made by a competent body of the RF which is keeping such state register;
5) those on the disputes concerning the institution, liquidation or registration on the territory of the RF of legal entities or of individual businessmen, as well as questioning the decisions of these legal entities’ bodies.

Complaint against a ruling

The arbitration court's ruling on the recognition and execution of a decision of a foreign court or of a foreign arbitrage decision may be appealed against to the arbitration court of the cassation instance in the course of one month as from the day of issue of the ruling.

3.4. Execution of foreign judgments, terms of execution (article 246 APC RF)

- The forcible execution of a decision is effected on the ground of a writ of execution, issued by the arbitration court which has passed the ruling on the recognition and the execution of the decision of a foreign court or of the foreign arbitrage decision

- a decision of a foreign court or of a foreign arbitrage decision may be presented for forcible execution within a time term, not exceeding three years as from the day of its entry into legal force. If this time term is missed, it may be restored by the arbitration court at the request from the executor if there is a reasonable excuse

- enforcement of foreign judgments is performed in accordance with Law of RF on execution procedure.

For example, Cyprus state court delivered a judgment in favor of Cyprus bank against the Russian company – debtor which failed to pay back credit. The court in its decision levied an execution on the mortgaged real estate (which secured the credit contract), located in Russia.

Russian court recognized a decision in part about amount of the debt of a Russian Company but refused to recognize it in part regarding the way of execution with reference to provisions of Russian Law on execution procedure, which provide for priority of assets to be the subject for levy of execution. Under this law levy of execution on the mortgaged property is possible only if other kind of assets of a debtor (in the first place, money) is insufficient.

Maria Miroshnikova and Anna Yakovleva, attorneys at EPAM, spoke at the panel on evidence gathering, interim remedies and relief available in Russia at LexisNexis Butterworths’ International Litigation and Fraud Conference, 26th/27th June 2007, London.