Presidium of Higher Arbitrazh Court Provides Guidance on the Concept of Public Policy

10 April 2013
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Key takeaways:

On April 1, 2013 the Higher Arbitrazh Court of the Russian Federation (“HAC”) published Information Letter No. 156 dated February 26, 2013 on its website, in which it approved the Review of Arbitrazh Court Practice in Applying the Public Policy Exception as a Ground for Refusal to Recognize and Enforce Foreign Judgments and Arbitral Awards (the “Review”) and recommended that it be used as a guidance by all arbitrazh courts.

Some of the more important innovations made by HAC include: 

  • The introduction of a more narrow definition of public policy than that previously applied. Based on the new definition proposed by HAC, the possibility that a foreign court judgment or arbitral award could be contrary to the public interest or could affect large-scale social groups does not automatically serve as grounds per se for the refusal to recognize or enforce such judgment or award in Russia. 
  • HAC stresses that the courts may not refuse to recognize or enforce foreign court judgments or arbitral awards on the grounds of violation of public policy in cases where the alleged violation is based on the mere circumstance that the judgment or award was grounded in the rules of foreign substantive or procedural law unknown in Russian law or applied differently under Russian law than in the foreign jurisdiction. 
  • The Review emphasizes that a clear distinction must always be made between the public policy exception and other procedural grounds for refusal to recognize or enforce a foreign judgment or award (such as, e.g., failure to serve proper notice to the respondent), and that it is inadmissible to apply the public policy exception as a common “all-inclusive” ground for refusal to recognize or enforce foreign court judgments or arbitral awards in Russia, rather than invoking the relevant specific ground.