As in many other countries in the world, in Russia the violation, by a foreign state court judgment or arbitral award, of the public policy constitutes a ground to deny recognition and enforcement of such judgments and awards. Therefore, it is key to carefully draft the dispute resolution clause in contracts and to make use of foreign courts or arbitral tribunals, if the judgments or award is going to be enforced in Russia. In April 2013, the Supreme Arbitrazh Court of the Russian Federation (SAC), Russia’s ultimate body for resolution of commercial disputes, published its Review of practice of arbitrazh courts on application of public policy clause in court cases as a ground for denial of recognition and enforcement of foreign judgments and arbitral awards (the “Review”).

Background -

Historically, the public policy clause in Russia has been characterized as lacking precise definition as well as meaningful guidance on terms of its application. Due to this, Russian courts construed this clause very broadly. Quite frequently, this led to rendering of unfair judgments: the public policy clause had the reputation of being abused as an instrument to resist recognition and enforcement of foreign judgments and arbitral awards.