Enforcement of Court Decisions in the New Reality: Global Trends and Practices
Changes in Recognition of Foreign Judgments
Over the past three years, geopolitical shifts and sanctions pressure have significantly impacted approaches to enforcing court decisions across different jurisdictions. Even friendly states have become more cautious about recognizing rulings involving Russian parties, seeking to balance international obligations with maintaining investment appeal.
Russia has also tightened its criteria for recognizing foreign judgments:
- The principle of reciprocity now requires case-by-case verification
- Grounds for refusal may include absence of a bank account in the country or the arbitrator’s nationality
- Broader application of the “public policy” doctrine to safeguard national interests
Statistics and Key Trends
The number of foreign judgments recognized in Russia has declined. While 173 recognition applications were granted in 2021, only 35 were approved in the first half of 2024. A similar trend is observed abroad, where enforcement of Russian-related decisions has become less common.
Key reasons include:
- Fewer disputes involving Russian parties in foreign courts
- Reluctance of foreign companies to seek enforcement in Russia due to low success rates
- Growing politicization of legal proceedings in certain jurisdictions
Recognition Criteria
1. International Treaties
While bilateral agreements simplify procedures, they don’t guarantee outcomes. Courts additionally assess:
- Whether reciprocity is upheld in practice
- Whether the judgment conflicts with national interests
2. Public Policy
Russian courts increasingly refuse recognition if:
- Enforcement benefits entities from “unfriendly” states
- The ruling was issued by a court in an “unfriendly” jurisdiction
- Execution would violate counter-sanctions legislation
3. Reciprocity Principle
In the absence of treaties, courts examine whether Russian judgments are recognized in the relevant country. For instance, one enforcement request was denied because the issuing state had taken “unfriendly actions” against Russia post-2022.
Global Enforcement Practices
Friendly Jurisdictions:
- Kazakhstan: The most predictable due to close economic ties, though courts occasionally apply outdated agreements, creating legal uncertainty.
- Turkey: Actively employs reciprocity, enforcing Russian judgments even without bilateral treaties.
- UAE: Growing recognition rates, particularly through free zone courts (DIFC, ADGM).
- China: Strict on procedural compliance but generally receptive to Russian judgments.
Unfriendly Jurisdictions:
- EU: Sanctions make enforcement of Russian rulings nearly impossible, especially those based on “counter-sanctions” provisions.
- Cyprus: Despite a legal assistance treaty, EU sanctions create major hurdles.
- Hong Kong & Singapore: Require separate recognition proceedings and often challenge Russian courts’ exclusive jurisdiction.
How to Improve Enforcement Prospects?
- Follow Procedures: Document proper notification of the opposing party.
- Check Treaty Frameworks: Verify if mutual recognition agreements exist.
- Avoid “Sanction-Linked” Provisions: Judgments referencing counter-sanctions clauses face near-universal non-enforcement abroad.
- Choose Jurisdictions Wisely: Prioritize states with consistent recognition practices (Kazakhstan, Turkey, UAE).
Global judgment enforcement is becoming increasingly politicized. In the current climate, success depends on:
- Clear understanding of target jurisdictions’ recognition criteria
- Avoiding provisions perceived as politically motivated
- Focusing on regions with positive enforcement histories
The trend of selective recognition will persist, requiring businesses to meticulously plan legal strategies to protect their interests internationally.