Israeli court recognises a decision of its Russian colleagues

In February 2009, the Moscow City State Commercial (‘Arbitration’) Court handed down a decision allowing russian company to recover debt from the Israeli-registered company (the “Defendant”) under a supply contract. The court also awarded interest of more than EUR 5 million on the amount due.

Since the Defendant is a company registered in Israel, Pepeliaev Group brought proceedings in the Tel Aviv District Court to have the decision of the Russian court recognised and enforced in Israel.

Until now, difficulty lay in the fact that there is no agreement between the Russian Federation and Israel with regard to legal assistance which would allow for decisions of the competent courts of one of those countries to be recognised and enforced in the other. This meant that the case law of both the Russian and Israeli courts did not allow mutual recognition and enforcement, making the resolution of disputes between Russian and Israeli companies significantly more difficult.

However, despite the Defendant’s objections (citing the lack of any international treaty), the Tel Aviv District Court has recognised the decision of the Moscow City Arbitration Court dated 13 February 2009 in case No. A40-65239/07-68-603 as having legal effect and being subject to mandatory enforcement in Israel.
 
In view of the above, the decision of the Tel Aviv District Court may be regarded as an important precedent both in Israeli practice and for the case law of the Russian courts. Such a decision may facilitate reciprocity being established in the relationship between Russia and Israel in terms of recognising and enforcing the decisions of competent courts of the two states.

Furthermore, this Decision may also have a positive impact on disputes being considered by the Russian courts regarding the recognition and enforcement of decisions of foreign courts from countries with which the Russian Federation has no treaty.

Pepeliaev Group’s lawyers are always ready to use our experience to provide legal assistance in cases that involve having the decisions of Russian courts recognised and enforced by the courts of foreign states, taking account of the latest changes to legislation and case law.

For further details, please contact:

in Moscow – Yuri Vorobyev, Head of dispute resolution and mediation practice, at (495) 967-00-07 or by y.vorobyev@pgplaw.ru;  Ekaterina Lebedeva, Senior associate, at (495) 967-00-07 or by e.lebedeva@pgplaw.ru 

in St Petersburg - Sergey Spasennov, Partner, Head of St. Petersburg office, at (812) 640-60-10 or by e-mail