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Involved in a dispute involving sanctioned parties? Dentons holds conference on new rules of Russia’s Commercial Procedure Code

30 Sep 2020 9:00 AM | Anonymous

On September 9, Dentons, with support from the Russian National Committee of the International Chamber of Commerce — World Business Organization (ICC Russia), LF Academy and Legal Insight magazine, held an online conference about the impact of the new rules of the Russian Federation Commercial Procedure Code on international arbitration. The new rules concern the Russian courts having exclusive jurisdiction to hear disputes involving sanctioned persons.  

Moderating the conference, partner Konstantin Kroll presented an overview of US and EU sanctions and the practical aspects of their impact on international arbitration. Konstantin then addressed the changes in Russia’s Commercial Procedure Code, highlighting that now commercial courts in Russia are getting exclusive jurisdiction over disputes involving sanctioned persons, even where a party has entered into an arbitration agreement, included an arbitration clause in its contract, or concluded a prorogation agreement to hear the dispute in a foreign court.

As noted in Mr. Kroll’s introductory presentation, where arbitral proceedings have been commenced outside Russia and a party to the proceedings believes its access to justice is limited due to sanctions, it can take advantage of the changes to the Commercial Procedure Code and ask the Russian court for an anti-suit injunction, so that the case is heard on the merits in Russia. If the arbitral proceedings abroad continue notwithstanding an injunction issued by a Russian court, the Russian court can render a decision fining the party to the proceedings that went against the Russian court’s order. The fine can be up to the entire amount of the claim and include the costs of the non-breaching party.

Leading international arbitration practitioners talked about what could happen to arbitration in their jurisdictions if a Russian court determines it has jurisdiction despite a contract’s arbitration clause. The conference’s line-up included Secretary-General of Hong Kong International Arbitration Centre Sarah Grimmer, Heger & Partner’s partner Susanne Heger (Vienna, Austria), as well as Dentons’ representatives: partners Lawrence Teh (Singapore and Hong Kong), Dominic Pellew (UK), Anna Crevon (France), Amy Klaesener (Germany), Barton Legum (France and US, Global Co-chair of the Litigation and Dispute Resolution practice), and senior managing associate Diora Ziyaeva (US).

A recording of the conference is available at this link.

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