Sergei Bakeshin analysed for Pravo.ru the position of the Supreme Court of the Russian Federation on the necessity of verification of arbitration court decisions by state courts
An organisation applied to the International Commercial Arbitration Court at the Russian Chamber of Commerce and Industry (ICAC) to recover the guarantee money from the Republic of Belarus. The rights of claim against the state were obtained from the bank under an assignment agreement. The claim was settled and the Belarusian government was recovered $3.2 million. The defendant attempted to contest the decision, but the court of appeal and the court of cassation upheld it. The dispute was heard by the Supreme Court, which overturned the previous rulings and sent the case for reconsideration. In its reasoned decision, the panel of judges referred to the need for the lower courts to verify the conditions of the guarantee and the arbitration clause and the availability of Belarus’ property in the Russian Federation.
Sergei Bakeshin, Head of Dispute Resolution and Insolvency practice at Maxima Legal, stressed that the higher court drew the lower courts’ attention to the fact that the rights under the arbitration agreement may not have passed to the plaintiff, because only the obligation to repay the principal debt was secured by the guarantee, which the bank did not assign to the organization. “Thus, the Economic Court put the issue before the courts not on the validity of the arbitration agreement, but on whether the Belarusian government is obliged to compensate the losses,” the expert explained to the portal Pravo.ru.
Analyzing the position of the Supreme Court, Sergei questioned the conclusion of the Economic Collegium about the need for the lower courts to check whether the respondent has property, noting that the first instance indicated that the Republic has property in Russia, which does not have diplomatic immunity, but the Supreme Court actually ignored this argument.
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