## Facts

- Dredging and Maritime Management SA (DMM), a Luxembourg company, had a contractual dispute with AO Inzhtransstroy, a Russian joint-stock company.
- On June 25, 2013, insolvency proceedings were opened against AO Inzhtransstroy under Russian bankruptcy law, and the debtor was placed under an “observation” procedure.
- The parties’ dispute was submitted to ICC arbitration (ICC International Court of Arbitration), seated in Geneva.
- On April 15, 2014, the ICC tribunal issued an award in DMM’s favor (later supplemented on December 10, 2014).
- The award ordered AO Inzhtransstroy to pay DMM €3,600,000 plus simple interest at 5% from November 21, 2010 until payment, ICC arbitration costs in U.S. dollars (including USD 39,651 and USD 120,066), and €283,135.36 in legal fees.
- In the bankruptcy case, creditors had a limited period to file claims for inclusion in the register of creditors; DMM later sought to be included in the register (reported as February 3, 2016).
- A settlement was reached in the bankruptcy case with most creditors, and the bankruptcy matter was closed on the basis of the court-approved settlement; DMM was not included in the creditor register and did not receive payment under the settlement.
- DMM then applied to the Arbitration Court of the City of Moscow to recognize and enforce the ICC award in Russia.
- On February 8, 2018, the Moscow court refused recognition and enforcement; on April 25, 2018, the Arbitrazh Court of the Moscow District (cassation instance) left that refusal in force.
- DMM filed a cassation complaint with the Supreme Court of the Russian Federation. On September 26, 2018, a single judge of the Judicial Panel for Economic Disputes refused to transfer the complaint for consideration by the panel.

## Issues

1. Whether DMM’s cassation complaint showed “substantial violations” of substantive or procedural law that required the Supreme Court to transfer the case to the Judicial Panel for Economic Disputes.
2. Whether Russian courts could refuse recognition and enforcement of the ICC award in light of AO Inzhtransstroy’s bankruptcy proceedings, including the creditor-register process and the court-approved settlement closing the case.
3. Whether the lower courts’ refusal could stand where the arbitration agreement was attacked as insufficiently specific about the administering arbitral institution, despite referencing ICC arbitration rules.

## Decision

- The Supreme Court refused to transfer DMM’s cassation complaint to the Judicial Panel for Economic Disputes for a merits hearing.
- The judge found that the complaint did not demonstrate substantial violations of law that affected the outcome and required intervention.
- As a result, the lower courts’ rulings denying recognition and enforcement of the ICC award remained in effect.

## Legal Principles

- Under the Arbitrazh Procedural Code provisions governing Supreme Court economic cassation screening, a case is transferred to the Judicial Panel only if the complaint plausibly shows substantial violations of substantive and/or procedural law that affected the outcome and that must be corrected to restore the applicant’s rights.
- A Supreme Court refusal to transfer at the screening stage leaves the challenged lower-court acts in force and does not involve a full rehearing on the merits.
- In disputes involving an insolvent debtor, Russian courts may treat the bankruptcy claims process (including deadlines and the register of creditors) and the legal finality of a court-approved settlement as relevant to whether and how a creditor may pursue collection in Russia.
- As reflected in the lower-court outcomes left standing, arguments attacking the validity or certainty of an arbitration agreement and arguments tied to bankruptcy finality can be raised as bases to oppose recognition and enforcement of a foreign arbitral award.

## Conclusion

In Re: Dredging and Maritime Management SA, the Russian Supreme Court (single-judge screening review) declined to transfer DMM’s cassation complaint challenging the Moscow courts’ refusal to recognize and enforce an ICC award against AO Inzhtransstroy, thereby leaving in place the non-enforcement result reached against the backdrop of the debtor’s bankruptcy proceedings and the closed, court-approved settlement.


Re: Dredging and Maritime Management SA, No. 305-ЭС18-11934 (September 26, 2018)