Insights, News / 16.12.2021

The Supreme Court of the Russian Federation has examined the claim of Uraltransmash seeking to have an anti-suit injunction granted against joint-stock company Rail Vehicles PESA Bydgoszcz continuing proceedings at the Arbitration Institute of the Stockholm Chamber of Commerce

The Court expressed the opinion that, by itself, the granting of restrictive measures against one of the parties involved in a dispute is assumed to be sufficient to conclude that such person’s access to justice is restricted; therefore, the unilateral expression of will, expressed in procedural form, is sufficient to transfer the dispute to the jurisdiction of the Russian state commercial courts. As the court pointed out, the wording of paragraph 4 of Part 2 of Article 248.2 of the Commercial Procedural Code of the Russian Federation emphasizes the optional nature of a claimant’s proof of circumstances confirming that an arbitration clause is impossible to enforce.

The Supreme Court also noted that the introduction by foreign states of restrictive measures (restrictions and personal sanctions) against Russian individuals affects their rights at least reputationally and thereby deliberately places them in an unequal position with respect to other persons.

In the Uraltransmash case, the court refused to issue an anti-suit injunction, since by the time it had considered the matter, the arbitration tribunal had already made a final decision. Nevertheless, there is every reason to believe that the Supreme Court of the Russian Federation will continue to be guided by the approach outlined in this case and will recognize the very fact of the application of sanctions to a Russian person as a sufficient factor to prohibit disputes from being considered in foreign arbitration institutions.

In this regard, we recommend specifying in the arbitration agreement or arbitration clause the city of the Russian Federation that will be the place of arbitration  and referring a dispute to arbitration institutions that have permission from the Government of the Russian Federation to administer arbitration in Russia. To date, four foreign arbitration centers have received such permission: HKIAC, VIAC, SIAC, and ICC.

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