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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.

Russia: No assets, No recognition and enforcement of an arbitral award

Background & court’s opinion: The claimant (Carpatsky Petroleum Corporation, USA) sought the recognition and enforcement the arbitral award rendered by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) against Ukranafta (Ukraine).

The jurisdiction of a Russian court was based on the claimant’s allegation that the defendant has assets in Russia. On the contrary, the defendant objected arguing that it has no any asset in Russia.

The Arbitrazh Court of the Kaliningrad region, relying on art 150 (1)(1) of the Commercial Procedural Code of the Russian Federation, decided to terminate proceedings because the court found that it did not have jurisdiction to hear the case due to there is no evidence that the defendant has any asset in Russia (the ruling dated 29 January 2014).

The Supreme Court’s decision: The High Court fully upheld this ruling (the decision of the Supreme Court of Russia dated 14 October 2014. Case А21-8191/2013).

Разрешение споров в Стокгольме: практические аспекты

19 апреля выступил на конференции “Разрешение споров в Стокгольме: практические аспекты”, организованной АБ «Корельский, Ищук, Астафьев и партнеры» совместно с Арбитражным институтом Торговой палаты г. Стокгольма.

I have spoken at the Conference «Settlement of Disputes in Stockholm: Practical Aspects». The topic was about difficulties in Enforcement of International Arbitration Awards in Russia. The conference was organized by the Arbitration Institute of the Stockholm Chamber of Commerce and the Korelskiy, Ischuk, Astafiev and Partners, Attorneys at Law.