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High Court Enforces £150 Million Russian Bank Judgments

Cross border litigation sounds complicated. However, due to many historical treaties, the enforcement of foreign judgments is not as complicated as one may initially think.

Generally, the biggest hurdle to overcome is having permission to issue against an individual that is not within the presiding jurisdiction. Permission of the court can be obtained but this is the main hurdle.

Once that has been secured, proceedings can progress as normal. If the defendant does not appear in court, it is really as their own risk.

In the case below, a Russian business man was residing in London. Proceedings were issued in Russia (with the presumed permission of the court to issue without the defendant being a resident in the jurisdiction) and judgment was obtained for £150M GBP.

The judgment was then allowed to be enforced in the UK by the High Court.

Diplomatic relations between nation states ebb and flow but political differences are not a bar to cross-border cooperation between legal systems. In one case, the High Court directed enforcement of Russian judgments worth £150 million against a Russian businessman resident in London.

The businessman had been the president of a large Russian construction group that was declared insolvent. A state-owned Russian bank obtained three judgments against him from a court in Moscow in respect of personal guarantees that he had given as security for the company’s debts.

In seeking summary judgment against the businessman, the bank argued that it was a straightforward matter in that the judgments of the Russian court were binding, conclusive and final and the businessman had no arguable defence. It argued that he was merely playing the system, both in Russia and England, in an attempt to delay the inevitable.

The businessman accepted that the Court had jurisdiction in the matter due to his residence in England. However, he argued that there were compelling reasons why the bank’s claim should not be resolved without a trial. It was submitted that the Russian judgments had been procured by fraud and that he had been denied a fair hearing in breach of the rules of natural justice.

In upholding the bank’s application, however, the Court found that the businessman had raised no triable issue and that his attempts to impeach the Russian judgments were unarguable. The Russian judgments were straightforward and reasonable on their face and there were no public policy grounds for refusing to recognise them.

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MLA 2017 18 Shortlisted 2