## Facts

- Nikolai Maximov, a Russian businessman, agreed under a share purchase agreement to sell to OJSC Novolipetsky Metallurgichesky Kombinat (NLMK), a Russian steel producer, a controlling interest (50% plus one share) in OJSC Maxi-Group.
- The agreement set the purchase price using a contractual formula and included warranties; a dispute later arose about the purchase price calculation and payment.
- The parties submitted their dispute to arbitration seated in Moscow before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (ICAC).
- The arbitral tribunal issued an award in Maximov’s favor, ordering NLMK to pay damages.
- Russian state courts set aside the award. The set-aside decisions relied on grounds including: (i) two arbitrators’ failure to disclose relationships with expert witnesses, (ii) the dispute being treated as non-arbitrable under Russian law (as a “corporate dispute”), and (iii) the tribunal’s calculation of the award being contrary to Russian sales/civil law and public policy.
- Maximov sought recognition and enforcement of the annulled Russian award in the Netherlands under Article 1075 of the Dutch Code of Civil Procedure (implementing the New York Convention).
- The Amsterdam District Court and the Amsterdam Court of Appeal refused to grant leave to enforce the award because it had been annulled at the seat.
- Maximov appealed in cassation to the Dutch Supreme Court (Hoge Raad), arguing that Dutch courts retained discretion to enforce despite the Russian annulment.

## Issues

1. Under Article 1075 DCCP and Article V(1)(e) of the New York Convention, may a Dutch court recognize and enforce a foreign arbitral award that has been set aside by a competent court at the seat?
2. If any discretion exists to enforce despite a seat annulment, how limited is it and what type of circumstances could justify enforcement?

## Decision

- The Dutch Supreme Court dismissed Maximov’s cassation appeal and left in place the refusal to grant leave to enforce the Russian award in the Netherlands.
- The Court accepted that Article V(1)(e) of the New York Convention allows refusal of enforcement when the award has been set aside by a competent authority at the seat, and treated the Russian set-aside as a strong reason to refuse enforcement.
- Any room for a Dutch court to enforce an annulled award exists only in rare, exceptional situations.
- The Court did not find such an exceptional situation in this case; it was not shown that giving effect to the Russian set-aside judgment would itself violate Dutch public policy or that the legitimacy of the Russian annulment was so doubtful that a Dutch court could disregard it.
- The Dutch enforcement court was not required (and was not permitted) to re-try the Russian courts’ application of Russian law or their assessment of the arbitral process as part of Dutch exequatur proceedings.

## Legal Principles

- Under Article V(1)(e) of the New York Convention, enforcement may be refused if the award has been set aside by a competent authority in the country where the award was made.
- In Dutch enforcement proceedings under Article 1075 DCCP, an annulment at the seat will normally lead to refusal of recognition and enforcement.
- Any power to enforce notwithstanding a seat annulment is narrow and applies only in exceptional cases, such as where recognizing the foreign set-aside judgment would be incompatible with fundamental rules of the Dutch legal order.
- Dutch courts generally will not conduct a merits review of the foreign set-aside decision or revisit the seat court’s conclusions on foreign law, arbitrability, or alleged procedural defects.

## Conclusion

Maximov v. NLMK holds that Dutch courts will generally refuse to recognize and enforce a foreign arbitral award that has been annulled by a competent court at the seat under Article V(1)(e) of the New York Convention, and that enforcement despite annulment is reserved for rare cases where disregarding the seat court’s decision is justified by fundamental Dutch public policy concerns.


Maximov v. NLMK, ECLI:NL:HR:2017:2992 (2017)