Dispute resolution with a Russian counterparty

Pre-trial Resolution of Disputes with Russian Counterparties

Russian legislation allows for the resolution of disputes out of court. In several categories of cases, particularly under the APC RF, adherence to the claim procedure is mandatory.

The form and procedure for sending a claim are determined by the contract or applicable regulations. If no special conditions are set, the claim is sent to the legal address of the counterparty, specifying the violated obligations, demands, and the deadline for voluntary settlement.

Written correspondence, official notifications, and other evidence of pre-trial settlement processes may be relevant when the dispute is heard in court. Their presence confirms the bona fide position of the plaintiff and compliance with the procedures prescribed by law.

Some disputes may be resolved through mediation or negotiations with the participation of a legal representative.

Dispute Resolution in Arbitration with a Russian Counterparty

Commercial arbitration can be an effective way to resolve cross-border disputes if there is an arbitration clause. Russia has several arbitration institutions authorized to handle disputes involving foreign companies.

These institutions include:

• The International Commercial Arbitration Court (ICAC) at the Russian Chamber of Commerce and Industry (CCI RF)

• The Maritime Arbitration Commission at the CCI RF

• The Arbitration Center at the Russian Union of Industrialists and Entrepreneurs (RSPP)

• The Arbitration Center at the Institute of Modern Arbitration (RAI)

• The International Arbitration Center at the Non-Profit Organization "Institute of Arbitration and Mediation"

The ICAC at the CCI RF remains the most optimal platform, recognized outside of Russia. Its jurisdiction covers disputes arising from foreign economic contracts, including supply, construction, agency, and services.

When choosing an arbitration institution, it is necessary to consider its regulations, the language of proceedings, rules for appointing arbitrators, and the possibility of enforcing decisions in other jurisdictions.

Russian courts’ stance regarding arbitration clauses depends on various factors: the presence of sanctions, the nature of the dispute, the place of performance, and the availability of the arbitration forum. In some cases, the arbitration clause may be deemed unenforceable.

Dispute Resolution in Russian State Arbitration Courts

Foreign companies can approach Russian arbitration courts if there is jurisdiction under Article 247 of the APC RF. Such cases are heard in accordance with Russian procedural law and are subject to the same requirements as disputes between Russian legal entities.

The process is initiated by filing a claim with the arbitration court of a Russian region or, in certain cases, with the Arbitration Court of Moscow — for example, if the defendant is not registered in Russia or the place of performance is not established.

Proceedings are conducted in Russian. A foreign company can participate through an authorized representative. In some cases, translated documents may need to be submitted, notarized.

Courts assess the merits of the dispute, reviewing evidence such as correspondence, contracts, accounting documents, expert opinions, and other materials. If the claims are deemed valid, a judgment will be issued, enforceable by law.

If the dispute is related to sanctions or restrictions on access to foreign courts, Russian courts may refuse to recognize the arbitration clause and take the case into their own jurisdiction, regardless of the contractual terms.

Applicable Law

When concluding foreign economic contracts, the parties have the right to choose the applicable law. In Russia, such a choice is recognized if it is explicitly stated in the contract or clearly follows from the terms and circumstances of the case. This provision is set forth in Article 1210 of the Civil Code of the Russian Federation.

If there is no agreement on applicable law, the court will determine it based on the nature of the legal relationship, the place of performance of obligations, the location of the parties, and other significant factors.

If one party to the contract is a foreign company, Russian courts may apply either foreign law or Russian law, depending on the specific situation. However, Russian public law (antitrust, currency, tax regulations) will apply regardless of the law chosen by the parties.

The application of foreign legal norms may be restricted if their enforcement leads to results contrary to the public order of the Russian Federation. Such limitations are applied in exceptional cases.

Enforcement of Decisions on Russian Territory

Decisions of Russian arbitration courts must be enforced in Russia through the bailiff service. An enforcement order is issued by the court after the decision enters into legal force and is presented in the manner prescribed by Federal Law No. 229-FZ "On Enforcement Proceedings."

Foreign judicial decisions may be recognized and enforced in Russia if this is provided for by an international agreement or based on the principle of reciprocity. Common grounds for recognition include bilateral agreements with specific countries and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

To apply for recognition and enforcement of a foreign decision, a certified copy of the decision must be submitted, along with proof of its legal force and evidence of proper notification of the opposing party. Documents must be translated into Russian and certified in accordance with the established procedure.

In rare cases, the court may refuse recognition if the decision violates the fundamentals of Russian law, was issued by a court without jurisdiction, or if the party was not properly notified about the proceedings.

Services for Supporting Disputes with Russian Counterparties

KDpartners specialists provide full legal support to foreign companies at all stages of disputes with Russian counterparties. We assess the prospects of the case, develop a strategy for defending the client’s interests, and assist throughout the process in both arbitration institutions and state courts of the Russian Federation.

We represent the interests of foreign companies in negotiations, preparation of pre-trial claims, drafting procedural documents, interaction with government bodies, and enforcement proceedings.

Our work is conducted in Russian, English, and Chinese. We take into account not only legal but also cultural, procedural, and commercial aspects of cross-border disputes.