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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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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, 720 скачиваний)

The competence of arbitral tribunals under the Moscow Convention on protection of the rights of the investor

Arbitration analysis: In the recent Russian cases Kyrgzstan v Lee John Bek and Kyrgyzstan v Stans Energy Corp the claimant State sought the revision of an arbitral tribunal’s interim award on grounds that it lacked competence. Although the Moscow Arbitrazh Court rendered two decisions (on 24 June 2014 in Lee John Bek and on 8 July 2014 in Stans Energy Corp) which confronted the issue of whether or not the arbitrators had competence to hear the disputes, the position of the court raised more questions on this issue than there were before. Mikhail Samoylov, Senior Associate at KIAP Attorneys at Law and Leixs©PSL Arbitration contributor discusses the decisions.

The article is available on the LexisNexis Dispute Resolution Blog and attached for free.

  Samoylov. The Competence of Arbitral Tribunals (72.3 Кб, 489 скачиваний)

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Update: See here