Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio
I. Sources of private international law
1. Major legislation
Pursuant to art 71(п) Constitution of the Russian Federation of 25 December 1993 (available at <www.pravo.gov.ru/konstituciya>, henceforth Russian Constitution), federal choice-of-law regulations fall within the exclusive competence of the federal Russian state, as opposed to the subjects of the Russian Federation (republics, territories, regions, autonomous areas and cities of federal significance). According to the prevailing opinion, this constitutional provision relates to choice-of-law rules applicable both to international and interregional conflicts (→Interregional/Interstate law).
There is no special Act on private international law in Russia; instead, private international law rules are to be found in various legislative enactments. Rules on international jurisdiction in →civil and commercial matters, as well as provisions on the recognition and enforcement p. 1of foreign judgments, are contained in procedural codes. There are two main state court systems: (i) courts of general jurisdiction (суды общей юрисдикции), which hear among other things civil cases concerning disputes of a non-commercial nature involving parties who are individuals without the status of an entrepreneur; and (ii) state arbitrazh (commercial) courts (арбитражные суды), which generally hear commercial disputes involving parties who are legal entities or entrepreneurs. Courts of general jurisdiction apply the Russian Civil Procedural Code (Civil Procedural Code of the Russian Federation No 138-Fz of 14 November 2002, as amended, henceforth Russian CPC), including the rules of ch 44 on international jurisdiction and the rules of ch 45 on the recognition and enforcement of foreign judgments and foreign arbitral awards. Arbitrazh courts apply the Arbitrazh Procedural Code (Arbitrazh Procedural Code of the Russian Federation No 95-FZ of 24 July 2002, as amended, henceforth Russian APC), including the rules of ch 32 on international jurisdiction and the rules of ch 31 on the recognition and enforcement of foreign judgments and foreign arbitral awards.
Provisions on the applicable law are also dispersed between several legislative acts. The most important are the choice-of-law provisions in Division VI (private international law) of the Russian Civil Code (Civil Code of the Russian Federation, as amended by Federal Law No 260-FZ on 30 September 2013, henceforth Russian CC). This Division is included in pt III Russian CC, which originally came into force in 2002 and was substantially amended in 2013. Besides special choice-of-law rules in the sphere of civil and commercial relationships, the Russian CC contains a ch 66, with general provisions on private international law that are also applicable to special conflict-of-laws rules incorporated into other Russian legislative enactments. Most choice-of-law rules from the Russian CC are modern and take into account recent private international law developments in other countries.
Choice-of-law provisions in the area of family law are comprised in Division VII of the Russian Family Code (Family Code of the Russian Federation No 223-FZ of December 29, 1995, as amended). Chapter XXVI of the Russian Maritime Code (Maritime Code of the Russian Federation from 30 April 1999 No 81-FZ, as amended) consists of special choice-of-law provisions in the sphere of maritime law. The Russian Labour Code (Labour Code of the Russian Federation of 31 December 2001, Federal Law No 197-FZ of 2001) contains a number of fragmented and rather obsolete unilateral choice-of-law provisions related to employment agreements. Besides these codes, there are a number of other national legislative enactments that contain some isolated special choice-of-law provisions, whose interaction with the choice-of-law rules of the Russian CC usually remains rather unclear.
The above-mentioned choice-of-law rules cover international conflicts only. According to the prevailing opinion, they cannot be applied to interregional conflicts, which could arise in Russia in specific areas of private law (eg family law or land law). Rules on interregional conflicts remain rather fragmented and are not incorporated into any single cohesive legislative instrument.
2. International conventions
According to art 15(4) Russian Constitution, the universally recognized norms of international law, as well as international treaties in force in the Russian Federation, are considered a component of the Russian legal system. If an international treaty in force in the Russian Federation specifies rules that contrast with national legislation, then the rules of the international treaty prevail. However, a difficult situation arises where the provisions of a Russian Federal Act enacted by the Russian Parliament conflict with the provisions of an international treaty the consent to be bound by which was given not by the Russian Parliament, but in some other manner (eg by a Russian Government decision). In its Resolution No 5 dated 10 October 2003, the Russian Supreme Court took the view that only international treaties ratified by the Russian Parliament and duly promulgated through publication in the official Russian media will prevail over the national federal laws.
Russia acts as a successor to the Union of Soviet Socialist Republics (USSR), and in January 1992 it sent a diplomatic note according to which Russia continues to exercise rights and duties arising out of international treaties formerly in force in the USSR. Thus, many international treaties which were ratified or acceded to by the USSR continue to apply in Russia.
p. 1Russia participates in the activities of all of the main intergovernmental international organizations aimed at the unification of substantive and private international law. Among the UNCITRAL Conventions, Russia has ratified the New York Convention (New York Convention of 10 June 1958 on the recognition and enforcement of foreign arbitral awards, 330 UNTS 3) and the →CISG (United Nations Convention of 11 April 1980 on Contracts for the International Sale of Goods, 1489 UNTS 3). As of 1 November 2014, the following →UNIDROIT Conventions are in force in Russia: the UNIDROIT Financial Leasing Convention (UNIDROIT Convention of 28 May 1988 on International Financial Leasing, 2312 UNTS 195), the Ottawa Factoring Convention (UNIDROIT Convention on International Factoring of 28 May 1988, 2323 UNTS 373; 27 ILM 943), the Cape Town Convention (Convention of 16 November 2001 on international interests in mobile equipment, 2307 UNTS 285) and the Protocol of 16 November 2001 to the Convention on international interests in mobile equipment on matters specific to aircraft equipment, 2307 UNTS 615. As for legal instruments prepared by the →Hague Conference on Private International Law, Russia participates mainly in the Hague Conventions related to civil procedure and child protection. As of 1 November 2014, Russia has ratified or acceded to the following Hague Conventions: the Hague Civil Procedure Convention (Hague Convention of 1 March 1954 on civil procedure, 286 UNTS 265), the Hague Legalisation Convention (Hague Convention of 5 October 1961 abolishing the requirement of legalisation for foreign public documents, 527 UNTS 189), the Hague Service Convention (Hague Convention of 15 November 1965 on the service abroad of judicial and extrajudicial documents in civil or commercial matters, 658 UNTS 163), the Hague Evidence Convention (Hague Convention of 18 March 1970 on the taking of evidence abroad in civil or commercial matters, 847 UNTS 241), the Hague Child Abduction Convention (Hague Convention of 25 October 1980 on the civil aspects of international child abduction, 1343 UNTS 89) and the Hague Child Protection Convention (Hague Convention of 19 October 1996 on jurisdiction, applicable law, recognition, enforcement and co-operation in respect of parental responsibility and measures for the protection of children, 35 ILM 1391). Russia is also a contracting party to the European Foreign Law Convention (European Convention of 7 June 1968 on information on foreign law, 720 UNTS 147). Russia participates in a number of the WIPO treaties and has also acceded to the WTO (→WTO and private international law). Besides, Russia is a party to a number of conventions in the sphere of transport law (→Transport law (uniform law)): the Warsaw Convention (Convention of 12 October 1929 for the unification of certain rules relating to international carriage by air, 137 LNTS 11), the Hague Rules (International Convention of 25 August 1924 for the unification of certain rules relating to bills of lading, 120 LNTS 155), the Athens Convention 1974 (Athens Convention of 13 December 1974 relating to the carriage of passengers and their luggage by sea, 1463 UNTS 20), the CMR (Convention of 19 May 1956 on the contract for the international carriage of goods by road, 399 UNTS 189), the TIR Convention (Geneva 14 November 1975 UN Customs Convention on the international transport of goods under cover of TIR Carnets (TIR Convention), 1079 UNTS 89), the COTIF (Convention of 9 May 1980 concerning international carriage by rail, 1396 UNTS 2, in the version of the Protocol of Modification of 3 June 1999, available at <www.otif.org>) and a number of others.
Russia has a network of over 40 bilateral conventions addressing issues of the recognition and enforcement of judgments, legal assistance and civil procedure. Moreover, certain of these bilateral conventions include fragmented →choice-of-law rules, such as conventions with →Hungary (1958), →Bulgaria (1975), →Vietnam (1981), Czech Republic (1982), →Slovakia (1982), →Cuba (1984), →Lithuania (1992), Kyrgyzstan (1992), Azerbaijan (1992), →Estonia (1993), →Latvia (1993), Moldova (1993), →Iran (1996), →Poland (1996), →Egypt (1997), Mongolia (1999) and →India (2000) (available at <http://fssprus.ru/treaties>).
3. Multilateral conventions and other legal instruments between the former Soviet republics
There are several political and economic unions with participation from former Soviet republics, ie countries which before 1992 comprised a single state, namely the USSR. These unions have produced a number of international treaties and other legal instruments, some of which include rules on private international law.
p. 1In December 1991, 11 out of 15 former Soviet republics, with the exception of Estonia, Latvia, Lithuania and →Georgia, founded the CIS (→Commonwealth of Independent States and private international law). Georgia became a member of the CIS in 1993, but ceased its participation in 2009. Turkmenistan made a declaration on its special status as an associated member of the CIS. Organs of the CIS include the CIS Economic Court in Minsk that has competence to give interpretation to the treaties and other legal instruments developed under the auspices of the CIS.
The significant CIS conventions in the field of private international law are the Kiev Agreement of 20 March 1992 concerning the procedure for resolution of disputes related to conducting an economic activity (available at <http://cis.minsk.by/reestr/ru/index.html#reestr/view/text?doc=57>) and the Minsk Convention (Convention on legal assistance and legal relations in civil, family and criminal law matters of 22 January 1993, as amended on 28 March 1997, remains in effect with respect to only those participating states which have not yet introduced into effect the Kishinev 7 October 2002 Convention, available at <http://cis.minsk.by/reestr/ru/index.html#reestr/view/text?doc=192>). These two conventions include provisions on international jurisdiction, the applicable law, and the recognition and enforcement of foreign judgments. The 1993 Minsk Convention is to be replaced by the Kishinev Convention of 7 October 2002 on legal assistance and legal relations on civil, family and criminal cases, available at <http://cis.minsk.by/reestr/ru/index.html#reestr/view/text?doc=131>. However, the 2002 Kishinev Convention has yet to be ratified by Russia, so that the 1993 Minsk Convention continues to apply to relations with Russian parties. It is important to note that the provisions of these CIS conventions do not have universal application and do not fully replace the corresponding national rules of private international law. This creates a patchwork form of regulation, under which the applicability of conventions or national private international law rules depends on the parties’ nationality and place of residence. Certain private international law provisions of these CIS conventions are fragmented and outdated. For example, absent parties’ choice of the applicable law, the contract will be governed by the law of the country where the contract was made (lex loci contractus). Furthermore, a number of model acts were developed under the auspices of the CIS. Among the most important is the CIS Model Civil Code, three parts of which were introduced during the years 1994–1996 (available at <www.iacis.ru/upload/iblock/e0e/model_gk.pdf>). Part III CIS Model Civil Code (Model Civil Code of the Commonwealth of Independent States, 1994–1996, available at <www.iacis.ru>) includes detailed choice-of-law provisions that strongly influenced national legislation in Russia and other CIS countries.
In 2000, Russia, →Belarus, Kazakhstan, Tajikistan and Kyrgyzstan founded the Eurasian Economic Community (EURAZEC), with the principal aim of intensifying economic cooperation between the states. →Ukraine, Armenia and Moldova have observer status at the EURAZEC. EURAZEC organs made various proposals for the unification of EURAZEC Member State legal systems, including unification of certain fields of private law. The EURAZEC Court in Minsk has the competence to interpret EURAZEC instruments. Moreover, Russia, Belarus and Kazakhstan decided to form a Customs Union and the Uniform Economic Space with the aim of establishing the Eurasian Union (or the Eurasian Economic Union) in the coming years. Most legal instruments of these new communities relate to public law fields such as customs regulations and technical standards, but ambitious plans also exist for the unification of national rules in the field of private law. However, private international law issues have as yet attracted little attention from these new communities.
In 1997, Russia and Belarus signed a Treaty on the Union, later replaced by the 1999 Treaty on the Creation of the Union State (Treaty of 8 December 1999 on the Creation of the Union State between the Russian Federation and the Republic of Belarus, available at <www.soyuz.by/about/docs/dogovor5>). These treaties give various freedoms to the citizens of the two states such as freedom of movement, freedom of establishment (→Freedom of establishment/persons (European Union) and private international law), etc. Within this framework, the 2001 Agreement between Russia and Belarus on the procedure of mutual enforcement of court judgments (available at <http://fssprus.ru/2038850>) provides that decisions of the Russian arbitrazh courts and decisions of the Belarusian commercial courts are automatically recognized and enforced in each other’s territory without additional formalities, ie without the need to receive exequatur in the local courts.
4. p. 1Role of case-law
Although Russia is traditionally a civil law jurisdiction, case-law of the highest courts plays an important role as regards the interpretation of legislative provisions. Under arts 126 and 127 Russian Constitution, the Supreme Court and the Supreme Arbitrazh Court (which have been merged into a united Supreme Court since August 2014) are empowered to issue abstract interpretations summarizing existing court practice and binding on lower courts. Traditionally, these interpretations are given either: (i) by means of resolutions of the Plenum of the Supreme Court and/or the Plenum of the Supreme Arbitrazh Court (the Plenum comprising all highest instance court judges); or (ii) by means of court practice reviews approved by the Presidium of the Supreme Court or the Presidium of the Supreme Arbitrazh Court (the Presidium comprising the Court President, their deputies and the heads of the Court panels). In particular, the Review of Arbitrazh Court Practice on Certain Matters Related to the Proceedings Involving Foreign Persons is of vital importance (approved by the Information Letter of the Presidium of the Russian Supreme Arbitrazh Court No 158 dated 9 July 2013, Review No 158).
In addition, the Russian Constitutional Court has the power to declare acts of legislation unconstitutional and invalid. Thus, its resolutions may constitute a significant source of Russian private international law rules. In particular, in its Resolution No 10-П dated 26 May 2011, the Russian Constitutional Court gave significant guidance regarding the legal nature of private arbitrations, the arbitrability of real estate disputes, and the scope of art 248 Russian APC on the exclusive international jurisdiction of the Russian arbitrazh courts.
5. Role of doctrinal writings
Although doctrinal writings are not a formal source of law in Russia, these have traditionally exerted significant influence on the Russian legislature when drafting new private international law provisions. It is rare for Russian judges to make explicit reference to academic literature in the text of their court decisions.
II. History and development of private international law
Traces of certain private international law provisions can be found in documents of Kievan Russia dating back as early as the 10th century. However, until the 1917 Socialist Revolution, the legislation of the Russian Empire included only fragmented international and interregional choice-of-law rules (→Interregional/Interstate law), specifically in the fields of →succession, legal capacity and the formal validity of transactions. At the same time, there were a number of interesting academic publications largely influenced by German legal doctrine. The first legislative acts of the Soviet period, notably the 1922 Civil Code (available at <www.libussr.ru/doc_ussr/ussr_1435.htm>), also contained only a few and fragmented choice-of-law provisions.
A comprehensive system of choice-of-law provisions was introduced in the 1960s with the enactment of the 1961 Fundamentals of the Civil Legislation of the Soviet Socialist Republics (available at <www.libussr.ru/doc_ussr/usr_5748.htm>), the 1964 Civil Code of the Russian Soviet Federative Socialist Republic (available at <www.libussr.ru/doc_ussr/usr_6095.htm>) and the 1968 Fundamentals of the Legislation of Soviet Socialist Republics on Marriage and Family (available at <www.libussr.ru/doc_ussr/usr_6899.htm>).
A draft Law on International Private Law and International Civil Procedure was prepared in 1989–1990, but was never enacted. This was the only known attempt of drafting a legislative act that would have consolidated most private international law provisions in a single, cohesive document. However, choice-of-law provisions of this draft served as a basis for the 1991 version of Fundamentals of the Civil Legislation of the Soviet Socialist Republics (available at <http://pravo.gov.ru/proxy/ips/?docbody=&prevDoc=102011617&backlink=1&&nd=102011632>) that replaced the previous version of 1961. Although the USSR ceased to exist before the entry into force of this new legislative act, according to a special Russian Parliament bill, the choice-of-law provisions of the 1991 Fundamentals of the Civil Legislation were applicable to the territory of Russia until the enactment of pt III of the new Russian CC (1 March 2002).
Issues of international jurisdiction were resolved on the basis of the 1964 Civil Procedure Code of the Russian Soviet Federative Socialist Republic (<www.libussr.ru/doc_ussr/usr_6096.htm>), which was in force in various versions until the enactment of the Russian CPC. Special rules for commercial disputes were also p. 1introduced in the 1995 Arbitrazh Procedure Code, which was in force until the enactment of the Russian APC. The procedure of recognition and enforcement of foreign judgments was regulated by the Soviet Decree No 9131-XI dated 21 June 1988 ‘On the Recognition and Enforcement in the USSR of Foreign Court Judgments and Foreign Arbitral Awards’.
III. Application of foreign law
Russian courts are obliged both to apply the choice-of-law rules and to ascertain the content of foreign law ex officio. According to art 1191(1) Russian CC, in the application of foreign law (→Foreign law, application and ascertainment), the court shall ascertain the content of foreign laws having regard to their official interpretation, application practice and doctrine in the foreign state concerned. Failure to correctly apply the choice-of-law rules as well as an incorrect ascertainment of foreign law may constitute a ground for appeal.
At the same time, pursuant to art 1191(2) Russian CC, for claims connected to parties engaged in commercial activity, the court may impose the obligation to present information regarding the applicable foreign law on the parties. However, such an obligation does not arise automatically, but rather requires a court to issue an appropriate interim procedural determination (para 17 of Review No 158).
Article 1191(2) Russian CC provides a list of possible court measures for the purposes of ascertaining foreign law. Specifically, these measures allow the courts to make a request to the Russian Ministry of Justice, other competent agencies in Russia and abroad or to appoint a court expert. International treaties on legal assistance, as well as the European Foreign Law Convention, may also serve as useful tools. However, in practice it is most common, at least for commercial disputes, that the parties themselves file legal opinions with the court regarding the content of the applicable foreign law. In particular, the arbitrazh courts may deem the content of applicable foreign law sufficiently ascertained if a legal opinion filed by one party contains information necessary to resolve the dispute which the other party fails to contest by submitting further evidence on the matter (para 20 of Review No 158).
If, despite the measures taken by the court, the content of foreign law is not ascertained within a reasonable time period, the court will apply Russian law pursuant to art 1191(3) Russian CC. The court may not dismiss the claim merely on the ground that the applicable foreign law was not ascertained.
Authorities performing certain non-judicial functions, such as public notaries, commercial and property registrars and authorities in charge of civil registries shall also apply choice-of-law rules ex officio. However, Russian law lacks any detailed regulation in this respect.
IV. Basic principles of jurisdiction
1. General structure
Russian courts are granted general jurisdiction when the defendant is located or resident in Russia (art 402(2) Russian CPC and art 247(1)(1) Russian APC).
According to art 403(1) Russian CPC, the Russian courts of general jurisdiction are regarded as exclusive fora when the dispute relates to →immovable property located on the territory of Russia, arises out of the carrier contract and a carrier is located on the territory of Russia or concerns a divorce if both spouses are resident in Russia (→Divorce and personal separation). Pursuant to art 248 Russian APC, the Russian arbitrazh courts have exclusive international jurisdiction for disputes: (i) in respect of property owned by Russia or its subject territories, including disputes arising out of privatization and state →expropriation of property; (ii) related to immovable property located on Russian territory; (iii) related to the registration of inventions, trade marks and similar items in the Russian State Registry; (iv) related to challenging the content of entries in state registries administered by Russian state officials; and (v) concerning the establishment, registration and winding-up of Russian legal entities and entrepreneurs, as well as disputes regarding the validity of corporate decisions of Russian legal entities. In practice, Russian courts at times broaden the scope of their exclusive international jurisdiction by making reference to procedural rules on domestic exclusive jurisdiction. This is particularly relevant for certain additional types of corporate disputes concerning Russian legal entities.
The parties may also enter into a prorogation agreement if the dispute falls outside the exclusive jurisdiction of the Russian courts (art 404 Russian CPC and art 249 Russian APC). The Russian APC expressly mentions prorogation agreements only in favour of the Russian courts. However, according to settled p. 1case-law, Russian arbitrazh courts also recognize prorogation agreements in favour of a foreign court. A claim will be left without consideration if the respective dispute is covered by such an exclusive prorogation agreement in favour of a foreign court and the Russian arbitrazh court deems it prima facie valid, enforceable and capable of being performed (para 6 of Review No 158). The Russian arbitrazh courts are prepared to establish their jurisdiction on the basis of a prorogation agreement even if both parties are foreign (para 1 of Review No 158). However, the parties cannot by prorogation agreement change the rules of domestic jurisdiction, including the rules on the division of cases between the courts of general jurisdiction and arbitrazh courts (para 4 of Review No 158). Russian courts also have jurisdiction if the parties have submitted expressly or impliedly to the Russian courts and have not challenged the jurisdiction of a Russian court before their first statement on the merits of the case (para 7 of Review No 158).
The Russian CPC contains an exhaustive list of rigid grounds for establishing international jurisdiction in respect of the Russian courts of general jurisdiction. However, a peculiar feature of the Russian APC is that it additionally includes a flexible rule according to which the Russian arbitrazh courts may also have international jurisdiction in other cases if the dispute has a close connection with Russia (art 247(1)(10) Russian APC). A close connection with Russia may be established among others if the subject of the contract or most of the evidence is located in Russia, or Russian law is applicable on the merits of the case (para 10 of Review No 158). Thus, the Russian arbitrazh courts may apply an interesting version of the forum conveniens concept.
Russian procedural legislation does not expressly recognize the Russian courts’ power to grant →provisional measures in connection to foreign proceedings. This issue is highly significant, since the Russian courts deny the recognition and enforcement of provisional measures granted by foreign courts and arbitral tribunals. This lacuna was recently eliminated by the Supreme Arbitrazh Court, which concluded that the Russian arbitrazh courts may grant provisional measures in connection to foreign proceedings if the debtor is located or has assets in Russia, or the rights of the petitioner were infringed on Russian territory (para 30 of Review No 158).
The Russian courts have jurisdiction in contractual matters if the contractual obligation has been performed or was intended to be performed in Russia (art 402(3)(6) Russian CPC and art 247(1)(3) Russian APC). However, it remains unclear whether the contract is to be considered as having only one →place of performance or whether the place of performance of each obligation in the contract can be taken into account.
As for disputes arising out of alleged unjust enrichment, the Russian courts have jurisdiction if the alleged enrichment took place on Russian territory (art 402(3)(7) Russian CPC and art 247(1)(5) Russian APC). Regarding obligations arising out of →torts (delicts), the Russian CPC provides that in cases connected to death or personal injury, the Russian courts have jurisdiction if the tort occurred in Russia or the claimant is resident in Russia (art 402(3)(4) Russian CPC). Russian courts of general jurisdiction are competent to hear cases connected with damage caused to property if the action or other event giving rise to the damage occurred on Russian territory (art 402(3)(5) Russian CPC). The Russian APC grants the Russian arbitrazh courts jurisdiction to hear cases connected with property damage if either the action or other event occurred or the damage resulted in Russia (art 247(1)(4) Russian APC). Russian courts also have jurisdiction to hear disputes relating to alleged defamation if the claimant is located in Russia (art 402(3)(9) Russian CPC and art 247(1)(6) Russian APC).
3. Property rights
Russian courts have exclusive international jurisdiction over disputes related to →immovable property located on Russian territory (art 403(1)(1) Russian CPC and art 248(1)(2) Russian APC).
Russian procedural rules also grant jurisdiction to the Russian courts if the defendant has assets in Russian territory (art 402(3)(2) Russian CPC and art 247(1)(1) Russian APC). It remains unclear whether such assets need to be connected with the subject matter of the dispute in order to constitute a separate ground p. 1of international jurisdiction for the Russian courts.
Russian arbitrazh courts have jurisdiction over disputes related to the circulation of securities if such securities were issued in Russia (art 247(1)(7) Russian APC).
Russian arbitrazh courts have exclusive jurisdiction over disputes concerning the creation, registration and winding-up of Russian legal entities and entrepreneurs, as well as disputes regarding the validity of corporate decisions of Russian legal entities (art 248(1)(5) Russian APC).
Russian courts are also granted jurisdiction to hear disputes if a branch, representative office or organ of the legal entity is located in Russia (art 402(3)(1) Russian CPC and art 247(1)(2) Russian APC). The Russian Supreme Arbitrazh Court clarified that this ground of international jurisdiction may be invoked only if the claim bears some connection with the activities of such branch, representative office or organ (para 8 of Review No 158). Any permanent place of business may be qualified as a branch or representative office for the purposes of art 247(1)(2) Russian APC, even if the registration or other formalities were not complied with by the defendant (para 9 of Review No 158).
5. Family matters
Russian courts have exclusive jurisdiction in divorce matters if both spouses are resident in Russia (art 403(1)(3) Russian CPC). Moreover, the Russian courts have non-exclusive jurisdiction in divorce matters if only the claimant is resident in Russia, or at least one of the spouses has Russian →nationality (art 402(3)(8) Russian CPC; →Divorce and personal separation).
Russian courts have jurisdiction to hear claims related to maintenance and/or filiation if the claimant is resident in Russia (art 402(3)(3) Russian CPC). The Russian courts have jurisdiction over →adoption matters if the adoptee has Russian nationality or is resident in Russia (art 403(2)(2) Russian CPC).
V. Basic principles of choice of law
1. General provisions
Article 1186(1) Russian CC specifies that the issue of →choice of law arises if a private relationship is characterized by a foreign element, such as the participation of a foreign person or location of the subject matter abroad. However, the list of possible foreign elements is not exhaustive.
As a general rule, characterization (→classification (characterization)) to determine the applicable conflict provision is made on the basis of Russian law. However, if the legal concepts requiring characterization are unknown to Russian law or are known under different terminology or with different content and cannot be determined by interpretation on the basis of Russian law, foreign law may be applied for characterization purposes (art 1187 Russian CC). When the applicable law is the law of a country with several legal systems, the determination of which legal system is applicable is made in accordance with the law of the foreign state. However, if the law of that foreign state does not help to resolve the issue, the legal system with the closest connection to the issue is applied (art 1188 Russian CC). Article 1190 Russian CC admits the doctrine of single →renvoi only for issues related to the determination of an individual’s legal status, provided the foreign law designated by the Russian choice-of-law rules refers back to Russian law. In all other situations, the concept of renvoi has no relevance.
Article 1192 Russian CC introduces the concept of →overriding mandatory provisions or rules of immediate application. An overriding mandatory provision is a mandatory rule which, by virtue of an indication in the rule itself or of its particular significance, regulates the respective relation regardless of the otherwise applicable law. Article 1192(1) Russian CC implies an obligation on the part of Russian courts to apply the overriding mandatory provisions of the →lex fori. For example, Russian court practice classifies as overriding mandatory provisions certain rules from the Federal Law dated 29 April 2008 No 57-FZ ‘On the Procedure of Making Foreign Investments in the Commercial Companies Having Strategic Significance for the Protection of Defense and Security of the State’. The rules of this Act demand the prior consent of a special governmental commission for certain types of transaction regarding the shares of strategic Russian →companies (para 16 of Review No 158). Article 1192(2) Russian CC allows the Russian courts to have regard to the overriding mandatory provisions of any third country after consideration of the purpose and nature of such provisions, as well as the p. 1consequences of their application or non-application. Pursuant to art 1193 Russian CC, a rule of foreign law in exceptional cases may not be applied when the consequences of its application would manifestly contradict the basic notions of the legal order of the Russian Federation (→public policy (ordre public)), having regard to the nature of the relations characterized by a foreign element. If necessary in such a case, the appropriate rule of Russian law will be applied.
The parties to a contract may by agreement choose the law applicable to their →contractual obligations (art 1210(1) Russian CC). A choice-of-law agreement made after conclusion of the main contract has retroactive force from the moment of the conclusion of the contract, but may not prejudice its formal validity or adversely affect third-party rights (art 1210(3) Russian CC). The parties may choose the applicable law both for the contract as a whole or for its individual parts (art 1210(4) Russian CC). The →choice-of-law agreement must either be express or unequivocally be implied by the contract terms or the totality of the circumstances of the case (art 1210(2) Russian CC). In particular, the choice-of-law agreement is deemed to be concluded if the parties both refer to substantive provisions of the same national law in their procedural applications, eg statement of claim and statement of defence (para 13 of Review No 158). In contrast, a prorogation agreement will not automatically qualify as an implied choice of substantive law (para 12 of Review No 158).
According to the initial wording of art 1210(5) Russian CC, if the contract is connected factually (реально связан) only with one country, the parties’ choice of the law of another country does not prejudice the application of mandatory rules of the country with which the contract is factually connected. This provision created serious problems in previous Russian case-law, since some Russian courts applied it to international contracts with undoubted foreign elements, for instance to contracts between parties located in different countries. However, art 1210(5) was reformulated as part of the 2013 amendments to the Russian CC to incorporate wording similar to art 3(3) Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I),  OJ L 177/6; →Rome Convention and Rome I Regulation (contractual obligations)).
→Party autonomy to choose the law applicable to a contractual obligation is limited regarding contracts for →immovable property located in Russian territory. In effect, Russian law is mandatorily applicable to such contracts (art 1213(2) Russian CC). It is worth noting that under Russian law, aircraft and watercraft as well as space objects are also qualified as immovable property if they are subject to registration in state registries. According to art 1214(1) Russian CC as amended in 2013, the parties’ →choice of law does not prejudice application of the mandatory provisions of lex societatis in contracts on the formation of legal entities, as well as contracts related to the exercise of corporate rights. Party autonomy is also strictly limited for →consumer contracts (art 1212 Russian CC).
Absent party agreement on the choice of law, resort is generally had to the concept of characteristic obligation. This leads to the application of the law of the country where the residence or principal place of business of the party bearing the significant performance obligation under the contract is located (art 1211(1) and (2) Russian CC). This choice-of-law rule is flexible in that if it follows from the totality of the circumstances of the case that the contract is manifestly more closely connected with some other country, then the law of that other country will apply.
Traditionally, Russian private international law was highly conservative regarding the formal validity of transactions, in that if at least one of the parties was a Russian company or Russian entrepreneur, Russian substantive law was mandatorily applicable with a written form requirement for any ‘foreign economic transaction’, non-observance of which rendered the transaction invalid (arts 162(3) and 1209(2) Russian CC). However, these strict provisions were repealed in 2013 and were replaced by a significantly more liberal approach. Under the new approach (art 1209(1) Russian CC), a transaction cannot be invalidated if the form of a transaction satisfies the formal requirements of one of the following legal systems: either (i) lex causae, ie the law applicable to the case in dispute, (ii) the law of the country where the transaction was concluded, whereby for the contracts made in absentio this is the law of the country where the offeror received an acceptance, or (iii) Russian law if Russian law is the p. 1lex personalis for at least one of the parties. The provision includes further exceptions to this liberal approach.
Since the 2013 reform, the principle of party autonomy has also become important for non-contractual obligations. After the occurrence of an event giving rise to the harm (damage) or unjust enrichment, the parties may themselves choose the applicable law (art 1223.1(1) Russian CC). Moreover, if the tort (delict) is closely connected to a contract which was earlier concluded between the parties in the course of their commercial activities, the lex contractus will also govern such non-contractual obligations (art 1219(3) Russian CC). The same approach applies to disputes arising out of alleged unjust enrichment if they arise in connection with an existing or purported contract (art 1223(2) Russian CC).
The general rule for →torts (delicts) is the application of the law of the country where the event giving rise to the harm (damage) occurred. However, if the harm (damage) occurred in another country, the law of that country may be applied by the court if the tortfeasor foresaw or should have foreseen the occurrence of harm (damage) in that other country (art 1219(1) Russian CC). If the tortfeasor and the victim have their places of residence or principal places of business in one and the same country, the law of that country will be applied. If the parties have their places of residence or principal places of business in different countries, but have a common nationality, the law of that country will be applied (art 1219(2) Russian CC).
3. Property rights
The basic choice-of-law rule for rights over immovable and movable property (→Property and proprietary rights; →Immovable property) is the application of the law of the situs (art 1205 Russian CC). In respect of goods in transit, the transfer of ownership and other rights in rem are governed by the law of the country from which the goods were dispatched (art 1206(2) Russian CC). Moreover, art 1206(3) Russian CC allows the parties to a transaction to agree on the application of the lex contractus to the issue of transfer of ownership and other rights in rem in respect of movable property. The acquisition of ownership by virtue of acquisitive →prescription is determined according to the law of the country where the property was located at the end of the time period of acquisitive prescription (art 1206(4) Russian CC). Rights in rem in respect of aircraft, watercraft or space objects subject to state registration are governed by the law of the country of registration (art 1207 Russian CC).
The lex societatis is traditionally determined in Russia as the law of the country where the legal entity was founded (incorporated) (art 1202(1) Russian CC). There are two main exceptions to this general rule. First, a legal entity may not rely upon a limitation of the powers of its bodies or representatives if the limitation is unknown to the lex loci actus, unless it is proved that the other party to the transaction knew or should have known of this limitation (art 1202(3) Russian CC). Second, after the 2013 reform, if the legal entity was formally incorporated abroad, but conducts its commercial activity predominantly in Russian territory, then the issue of shareholder or other controlling person’s liability for the company’s debts will be determined at the creditor’s option on the basis of either the lex societatis or Russian law (art 1202(4) Russian CC).
5. Family matters
The capacity to marry is governed by the law of →nationality of each party. Moreover, the impediments to →marriage specified in art 14 Russian Family Code must also be absent (art 156(2) Russian Family Code). If a person has several nationalities including Russian, that person’s capacity to marry is determined on the basis of Russian law (art 156(3) Russian Family Code). The formalities of a marriage celebrated in Russia are governed by Russian law (art 156(1) Russian Family Code). However, marriages involving Russian citizens that were authorized abroad through the application of foreign law are recognized in Russia, provided that no impediments specified in art 14 Russian Family Code exist (art 158(1) Russian Family Code).
A divorce conducted in Russia is governed by Russian law (art 160(1) Russian Family Code). However, divorces involving Russian citizens that were authorized abroad are recognized in Russia, provided that the foreign authority concerned was competent under the foreign legislation and applied the law prescribed by the relevant foreign choice-of-law provisions (art 160(3) Russian Family Code).
p. 1The law applicable to the effects of marriage, including the economic consequences of marriage, is determined on the basis of the law of the country of the spouses’ last common residence. If the spouses have never had a common place of residence, Russian law is applicable (art 161(1) Russian Family Code). When making a marriage contract or an agreement on →maintenance obligations, the spouses may choose the applicable law if they have no common nationality or common place of residence (art 161(2) Russian Family Code).
Filiation is governed by the law of the child’s nationality (art 162(1) Russian Family Code). Relations between parents and their children are governed by the law of their common place of residence. Absent such common place of residence, the law of the child’s nationality is applicable (art 163 Russian Family Code). For an adoption taking place in Russia, the requirements specified both by the law of the nationality of an adoptive person and Russian law must be satisfied (art 165(1) Russian Family Code).
Russian private international law traditionally uses the dual system for →succession mortis causa. According to art 1224(1) Russian CC, succession in respect of movable property is governed by the law of the country where the deceased had his or her last place of residence, while succession in respect of →immovable property is governed by the law of the situs.
A person’s capacity to make a testament, as well as its form, is determined according to the law of the country where the testator had his or her place of residence at the time of making the testament. However, a testament may not be declared invalid if its form satisfies the requirements either of the law of country where the testament was made or the requirements of Russian law (art 1224(2) Russian CC).
VI. Recognition and enforcement of judgments
Formally, a foreign court judgment may be recognized and enforced in Russia only if there is an international treaty on reciprocal recognition and enforcement of judgments in force between Russia and the concerned foreign state (art 409(1) Russian CPC and art 241(1) Russian APC). Although Russian courts of general jurisdiction follow this general principle rather strictly, Russian arbitrazh courts have on several occasions recognized and enforced court judgments from other countries (mainly from EU Member States). The reasoning of the Russian arbitrazh courts in such cases is rather inconsistent, in that the courts either apply the conventions on general aspects of state cooperation such as the 1994 Corfu Agreement on Partnership and Cooperation between EC and Russia (Corfu Agreement of 24 June 1994 on Partnership and Cooperation between the Russian Federation and the European Communities and their Members, available at <http://trade.ec.europa.eu>), regarding them as treaties on the reciprocal recognition and enforcement of judgments, or alternatively rely on the concepts of →comity and →reciprocity, treating them as widely recognized principles of international law.
According to Russian case-law, only final and conclusive foreign judgments can be recognized and enforced, while mere provisional orders and interim decisions do not meet this requirement. As a general rule, a party may file a petition for the granting of exequatur only within three years of the date when the foreign judgment was rendered. Other grounds for non-recognition are: (i) improper notification of the proceedings to the defaulting defendant, the dispute being of the kind for which Russian courts have exclusive jurisdiction; (ii) incompatibility of the foreign judgment with a Russian court judgment; (iii) pending proceedings in a Russian court between the same parties; or (iv) violation of Russian public policy (art 412 Russian CPC and art 244 Russian APC).
The Russian Law on International Commercial Arbitration No 5338-1, dated 7 July 1993, is based on the provisions of the UNCITRAL Arbitration Model Law (United Nations Commission on International Trade Law, UNCITRAL Model Law on International Commercial Arbitration as adopted on 21 June 1985 and as amended on 7 July 2006, UN Doc A/40/17 and A/61/17; →Arbitration, (UNCITRAL) Model Law). Russia is a party to the New York Convention and European Arbitration Convention (European Convention of 21 April 1961 on international commercial arbitration, 484 UNTS 349). However, in certain cases the interpretation of the provisions of these conventions given by the Russian p. 1courts, eg on the issues of →public policy and arbitrability, does not fully correspond to the approaches prevailing in other countries.
The most reputable and well-known arbitration institutions in Russia are the International Commercial Arbitration Court and the Maritime Arbitration Commission at the Chamber of Commerce and Industry of the Russian Federation, which were founded in the 1930s.
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