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Russia: Application of the New York Convention and liquidation of a debtor

On 29th July 2015 the Supreme Court of Russia reveals the decision on the issue whether or not a court grants the recognition and enforcement of an arbitral award against a debtor who is in the process of liquidation or the arbitral award should be conferred initially in accordance with special liquidation provisions. Continue reading “Russia: Application of the New York Convention and liquidation of a debtor”.  Continue reading →

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Russian proposals on domestic arbitration

On 7 May 2015 the Russian Government proposed a draft new law, the law on domestic arbitration in Russian Federation (the draft law), to the State Duma (the lower house of the Federal Assembly of Russia (legislature)). Domestic Arbitration is defined as an arbitration relating to a dispute arising out of legal relationship whether contractual or not, where none of the parties is: Continue reading →

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Application of the New York Convention in Russia has been challenged due to the dissolution of USSR

Since the 60s. of the last century the Union of Soviet Socialist Republics (USSR) was a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) but on December 26, 1991 the Soviet Union collapsed. Almost immediately after of the dissolution of USSR this fact was used as an attempt to object to the enforcement and recognition of several arbitration awards rendered by arbitration against a company domiciled the Russian Federation. Continue reading →

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Russia takes small steps to fight judicial graft

Although judges in Russia are generally immune from criminal prosecution, the law allows their prosecution for bribery. And each year, the Investigation Committee of the Russian Federation opens multiple criminal investigations against judges for alleged bribe taking, with some cases resulting in convictions and punishment. Continue reading →

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Kyrgyzstan v Stans Energy Corp case – old question and new conclusions

On 25 May 2015, the Moscow Arbitrazh court (a state court) published its decision on Kyrgyzstan v Stans Energy Corp case regarding the issue of challenging of the arbitral award on 30.06.2014 (case A40-64831/2014).

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MS Legal Blog

Dear readers! Since 2013 I have had a number publications in English. I have decided to collect them in the one blog (http://www.en.msamoylov.com/).  All publications in English will be published on the MS Legal Blog. Welcome to the MS Legal Blog!

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Russia: No corporate criminal liability for bribes, but there’s still punishment

There is no criminal liability of a legal entity for bribery in Russia because only a person is subject to the Russian criminal law. But that’s not the end of the story.

Under an administrative law, a legal entity can be held liable for a bribe if someone acting on behalf of the legal entity paid the bribe. An example would be when an employee pays a bribe so that the company can obtain a license for some business activity. In that situation, the person can be prosecuted under the criminal law. The company isn’t subject to criminal prosecution but can be held responsible under the administrative law.

Article 19.28 of the Code of the Russian Federation on the Administrative Offenses dated December 30, 2001 № 195- FZ imposes administrative liability on a legal entity — here’s a rough translation — “for the unlawful provision, offer or promise of anything of value to a public official for any actions or omissions to act in the interests of the legal entity.”

The sanctions for violations vary, depending on the amount of “the unlawful remuneration” (the bribe). The minimum sanction is a fine of up to three times of the amount of the bribe, but not less than RUB 1,000,000 ($17,450). The maximum sanction is a fine of up to 100 times of the amount of the bribe, but not less that RUB 100 million ($1.745 million). In all cases, the government has the right to confiscate the amount of the bribe or its equivalent.

The official statistical figures demonstrate year to year an increasing the number of cases being decided by Russian courts under Article 19.28 the Code of Administrative Offenses. In 2011, courts convicted only 65 entities under the provision. In 2012 the number of cases doubled (101) and in 2013 reached 222 cases. There is no statistical information yet for 2014.

Moreover, when a company is fined due to the administrative proceeding, the fine is deemed to be damages suffered by the company. Thus a shareholder of the company has a right to sue any culpable directors of the company for damages.

Kristina Furlet serves as compliance specialist in a Russian subsidiary of a global provider of telecom services.

Source: The FCPA blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).

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An anti-enforcement injunction in Kyrgyzstan v. Stans Energy Corp failed

Although Kyrgyzstan v. Stans Energy Corp is known as an investment arbitration case having been heard by the Moscow Arbitrazh (Commercial) court on the issue of setting aside the arbitral award there is something else interesting – on 12 March 2015 the court refused the motion on anti-enforcement injunctions in the case.

JSC “Kyrgyzaltyn”, not being the party neither to the investment arbitration case nor to the litigation trial, sought measures on postponing the proceeding of enforcement the Arbitral Award in Canada as well as some others.

In the Moscow Arbitrazh (Commercial) court’s ruling the court refused the motion due to several reasons.

First and foremost, the court stresses the JSC “Kyrgyzaltyn” has no the right to seek any measures since in accordance with the procedural law only a party to the proceeding may seek interim measures. Further, the Moscow Arbitrazh (Commercial) court has not found its competence on granting the sought injunctions but, unfortunately, the Court gives not reasoning why it has not found its competence on the issue.

However, the issue of competence of a Russian commercial court to grant an anti-enforcement injunction is rather controversial. It is well known that an anti-enforcement injunction is a neutral measure granted by both a state court and by an arbitral award. The Commercial Proceeding Code of Russia (hereinafter – the CPC) grants courts the power to take interim measures prescribed by article 90 (1) the CPC. Meanwhile, article 90 (2) the CPC reads as the court may take other interim measures.

The ruling dated on 12 March 2015 is only available in Russian.

  Kyrgyzstan v. Stans Energy Corp. The ruling.12.03.2015 (anti-enforcement injunction) (170.6 Кб, 784 скачиваний)

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The Swedish and Russian approach to public policy: One case, two opinions

The public policy exception to the enforcement of arbitral awards has traditionally been applied very narrowly, for example, where a failure to vacate the award would violate the due process rights of the participants. However a recent case illustrates the contrasting approaches of the Swedish and Russian courts in this regard. In a recently published article I discuss both the Swedish and Russian court rulings and consider the implications for both freedom of contract and arbitration as a method of dispute resolution in each jurisdiction.

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2015 International Arbitration Survey: Improvements and Innovations in International Arbitration

RUS. The School of International Arbitration at Queen Mary University of London проводит очередное исследование в области международного арбитража – ‘Improvements and Innovations in International Arbitration’. Желающим принять участие в нем – http://www.arbitration.qmul.ac.uk/research/2015/index.html  Исследование завершится 8 мая 2015 года, результаты будут опубликованы в октябре текущего года.

ENG. The School of International Arbitration at Queen Mary University of London takes the 2015 survey on ‘Improvements and Innovations in International Arbitration’. If one wishes to take part on the survey – http://www.arbitration.qmul.ac.uk/research/2015/index.html The closing date for responses is 8 May 2015. Results will be published in October 2015.