BackgroundConcept of sovereign immunity
What is the general approach to the concept of sovereign immunity in your state?
Under the USSR, it was unquestionable that the state enjoyed absolute immunity. However, after the collapse of the Soviet Union and the establishment of the Russian Federation as an independent state, it adopted the restrictive immunity doctrine. In other words, the state does not enjoy sovereign immunity with respect to its commercial acts if they are not performed when exercising state functions.Legal basis
What is the legal basis for the doctrine of sovereign immunity in your state?
The doctrine of sovereign immunity is based on a number of legislative provisions.
The Russian Civil Code of 1994 provides that Russia may enter into civil and commercial relationships on equal footing with natural persons and legal entities. Civil and commercial claims against Russia may also be enforced against state assets, with the exception of assets that may only be held by the state (eg, federal roads or rivers).
In 2015, Russia adopted Federal Law No. 297-FZ on the Jurisdictional Immunity of a Foreign State and the Property of a Foreign State in the Russian Federation (the Law on Jurisdictional Immunity), which is largely based on the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property (the Convention), which Russia signed in 2006 but never ratified. The relevant provisions were also introduced in the procedural legislation to mirror the corresponding provisions of the Law on Jurisdictional Immunity.Multilateral treaties
Is your state a party to any multilateral treaties on sovereign immunity? Has the state made any reservations or declarations regarding the treaties?
Russia is not party to the 1972 European Convention on State Immunity.
Russia signed but never ratified the UN Convention on Jurisdictional Immunities; however, the provisions of the Convention have been largely adopted in the Law on Jurisdictional Immunity.
Jurisdictional immunityDomestic law
Describe domestic law governing the scope of jurisdictional immunity.
The main statutory source setting the regime for sovereign immunity in Russia is the Law on Jurisdictional Immunity, which provides for limited sovereign immunity and adopts the restrictive immunity doctrine (see question 1).
Sovereign immunity from claims submitted by foreign persons is mostly unregulated and should follow the general rule that Russia does not enjoy sovereign immunity in civil and commercial relationships.State waiver of immunity or consent
How can the state, or its various organs and instrumentalities, waive immunity or consent to the exercise of jurisdiction?
A state can waive immunity or consent to the exercise of jurisdiction by means of an international agreement, written consent or declaration before the court. These cannot be revoked. The law also expressly provides that consent cannot be derived from the foreign state’s participation in the proceedings for the sole purpose of invoking immunity, or asserting a right or interest in property that is at issue in the proceedings.
The foreign state’s consent to the application of Russian law in relation to a particular dispute, its non-participation in the proceedings and its involvement of a state representative as a witness or expert in the proceedings do not constitute consent to the exercise of jurisdiction.
Generally, consent to the exercise of jurisdiction in relation to a particular dispute does not affect the foreign state’s immunity from provisional measures and enforcement.
A state will have waived immunity if it submits a claim to a Russian court or otherwise participates in court proceedings on the merits of a claim, and such waiver will include counterclaims. A state will not be allowed to refer to immunity with regard to court proceedings relating to an arbitration agreement concluded by the state.
The Law on Jurisdictional Immunity distinguishes between immunity against a state court’s jurisdiction on the merits, immunity against provisional and interim measures, and immunity against enforcement. Each of these immunities may need to be waived separately. For example, in the most recent case on the matter (Tatneft v Ukraine, Case No. 40-67511/2017), the claimant sought to enforce in Russia an award rendered by a UNCITRAL tribunal in an investment dispute against Ukraine. While the court of first instance accepted Ukraine’s immunity, this decision was overruled by the court of cassation, which noted that, as Ukraine consented to arbitrate the dispute with the investor and participated in the proceedings, it cannot invoke jurisdictional immunity at the enforcement stage. The case was then referred to the court in another region of Russia (Stavropol region), because the courts of the Moscow region concluded they did not have jurisdiction over the matter, as there were no assets of Ukraine not covered by sovereign immunity in Russia. The Arbitrazh (Commercial) Court of the Stavropol Region granted the enforcement on the basis that Ukraine, having consented to arbitrate disputes with Russian investors and having agreed that the award will be final and binding upon it, has effectively waived enforcement immunity (Case No. A63-15521/2018). The court also concluded that it should not have been concerned with the question whether or not the assets of Ukraine located in the region were available for enforcement purposes (ie, not covered by immunity), as it was sufficient (for jurisdictional purposes) that the assets were present within the relevant region of Russia. At the time of writing, the appeal against this decision was pending.
In which types of transactions or proceedings do states not enjoy immunity from suit (even without the state’s consent or waiver)? How does the law of your country assess whether a transaction falls into one of these categories?
Irrespective of the state’s waiver, states do not enjoy immunity from suits arising out of commercial or civil law dealings of the state if the transactions were not connected with the state exercising its sovereign authority. This includes private transactions with individuals and legal entities, and other commercial acts undertaken in Russia or abroad that have effect in Russia. The court will be guided by both the nature and purpose of the transaction in question.
In addition, the law provides that immunity from a state court’s jurisdiction cannot be invoked in disputes involving:
- employment contracts;
- participation in companies and other collective bodies;
- property rights;
- personal injury and damage to property;
- intellectual and industrial property; and
- civil ships that are owned and operated by the state.
If one of the exceptions to sovereign immunity set out above applies, is there any related principle that could prevent a court having jurisdiction over the state?
Certain exceptions apply in the context of labour disputes. For example, Russian courts would not generally have jurisdiction in a labour dispute involving a foreign state’s embassy or consulate. Otherwise, court practice has not yet developed any principles preventing courts from taking jurisdiction if one of these exceptions apply.Proceedings against a state enterprise
To what extent do proceedings against a state enterprise or similar entity affect the immunity enjoyed by the state? Is there precedent for piercing the corporate veil to subject the state itself to those proceedings?
As a general rule, dealings of state enterprises cannot be attributed to the state and, hence, would not affect state immunity.
There is only one reported case where the claimant attempted to pierce the corporate veil, which held the region of Moscow liable for the acts of one of its bodies: in 2013, a German claimant, S+T Handelsgesellschaft mbH & Co KG, won an arbitration proceeding administered by the International Commercial Arbitration Court (ICAC) at the Russian Chamber of Commerce and Industry. The tribunal agreed to hold a construction department of the region of Moscow liable to pay damages and effectively pierced the corporate veil to drag the government of Moscow to arbitration and hold it liable for the acts of the aforementioned department.
The Supreme Arbitrazh Court set the award aside, noting that piercing of the corporate veil is not possible as the relationship between the construction department and government of Moscow lies beyond the domain of private law, and no law allows piercing of the corporate veil between public bodies.Standing
What is the nexus the plaintiff needs to have standing to bring a claim against a state?
Russian procedural law does not provide for a specific nexus the plaintiff would need to have to bring a claim against the state.
As a general rule, however, the claim may be brought before the place of incorporation of the respondent or where the respondent’s property is located. Consequently, the plaintiff may need to be able to show that the respondent’s state’s assets are within the jurisdiction of Russian courts to bring a claim. This would be the case in the context of enforcement of arbitral awards against a foreign state in Russia.
It should be noted, however, that there is no clear court practice in this regard.Nexus of forum court
What is the nexus the forum court requires to exercise jurisdiction over a state if the property or conduct that forms the subject of the claim is outside the forum state’s territory?
Russian courts would primarily exercise jurisdiction if the property or conduct is in the territory of Russia. The Law on Jurisdictional Immunity would apply if the conduct, such as a transaction entered into by the state, has at least some effect or consequences in Russia.Interim or injunctive relief
When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what interim or injunctive relief is available?
Consent to the exercise of jurisdiction or waiver of immunity from jurisdiction of a Russian court does not affect immunity from provisional measures. A state can, therefore, invoke these immunities unless it has expressly consented to the exercise of jurisdiction in relation to provisional measures or enforcement; or has allocated or earmarked property for satisfaction of the claim that is the object of the proceedings.
Subject to the above, interim measures are available against a state, including the prohibition of certain action and freezing of assets. However, in practice it is difficult to obtain interim measures from Russian courts because the courts have set a very high threshold for the applicant to satisfy the court that the measures are needed in a particular case. There have been no attempts so far to obtain interim measures from Russian courts against a foreign state.Final relief
When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what type of final relief is available?
There is no specific constraint or limitation on what types of final relief are available against a state. When it comes to civil and commercial matters, specific performance is usually a primary remedy as a matter of Russian law.Service of process
Identify the court or other entity that must be served with process before any proceeding against a state may be issued.
The procedure for the service of process on a foreign state can be provided for in an international treaty. If no such treaty exists, the service of process is effected through diplomatic channels with the assistance of the Ministry of Justice and the Ministry of Foreign Affairs.
There is no specific state organ to be served with the proceedings issued against Russia. Usually, the service will be made on the relevant state organ that was involved in the acts giving rise to the claim.
How is process served on a state?
As a general rule, the Russian court would send notice to the Ministry of Justice, which would hand it over to the Ministry of Foreign Affairs for serving on the foreign state through diplomatic channels.Judgment in absence of state participation
Under what conditions will a judgment be made against a state that does not participate in proceedings?
The court may proceed with the hearing and render a judgment even if the foreign state does not participate in the proceedings if:
- the foreign state is appropriately notified (see above);
- no less than six months have passed since the date when the notice was handed to the foreign state; and
- the state did not request reasonable extension, or the request has been rejected.
Enforcement immunityDomestic law
Describe domestic law governing the scope of enforcement immunity.
Generally, the enforcement immunity cannot be relied upon if it has been waived.
Further, immunity from enforcement cannot be invoked if the property in question is used or intended for use by the foreign state for purposes unrelated to the exercise of sovereign powers. The Law on Jurisdictional Immunity includes the list of assets that are presumed to be used for the exercise of sovereign powers, namely:
- property used for diplomatic or military purposes;
- items of cultural heritage or archives that are not intended for sale;
- property that forms part of various scientific, cultural or historical exhibitions not intended for sale; and
- property of the central bank or another supervisory body of a foreign state that is responsible for bank supervision.
When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?
Yes, usual laws and provisions on execution of judgments would apply to enforcement against states.Consent for further enforcement proceedings
Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?
Arguably, yes. At least the courts in Tatneft v Ukraine cases seem to have found that consent to arbitration results in waiver of immunity in relation to the proceedings for enforcement of the resulting award. At the same time, this waiver does not affect the ability of the claimant to cease assets of the state, which may be covered by sovereign immunity. Accordingly, the waiver is only effective in relation to the enforcement proceedings, but does not go beyond that.Property or assets subject to enforcement or execution
Describe the property or assets that would typically be subject to enforcement or execution.
Usually, the enforcement would be sought against the property used for commercial purposes. The burden would be on the applicant to show the property is used for commercial or other non-sovereign purposes.Assets covered by enforcement immunity
Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.
The Law on Jurisdictional Immunity includes the list of assets that are presumed to be used for the exercise of sovereign powers and hence covered by enforcement immunity (see question 16).
Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.
In accordance with article 16(1)(5) of the Law on Jurisdictional Immunity, property of the central bank or another supervisory body of a foreign state that is responsible for bank supervision is covered by enforcement immunity.Test for enforcement
Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.
There are no further tests to satisfy to seek enforcement against a state. However, it should be noted that domestic jurisprudence on the matter is very limited.Service of arbitration award or judgment
How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?
The state will need to be notified of the proceedings issued against it for the purposes of enforcement. The process of service is the same as the above.History of enforcement proceedings
Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?
The most relevant - if not only - case in this regard concerns the pending enforcement proceedings brought by the Russian state company Tatneft against Ukraine (cases Nos. A40-67511/2017 and A63-15521/2018). Tatneft sought to enforce in Russia an award rendered by a UNCITRAL tribunal in an investment dispute against Ukraine and so far was successful in obtaining the order for recognition and enforcement (which is currently being appealed). It is not clear, however, whether the claimant would be able to locate the assets of Ukraine not covered by sovereign immunity.Public databases
Are there any public databases through which assets held by states may be identified?
There is no such public database. The existing databases, such as the Unified Register of Property Rights, which contains information about the owners of real property in Russia, only allow searches by property, but not by name of the owner. Consequently, the property rights of a state can only be checked with respect to a particular asset.Court competency
Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?
The courts may assist parties with collecting information that the parties cannot obtain by themselves, but there is no general power to help identify assets held by a state any other debtor in Russia. Accordingly, it would be for the claimant to identify relevant assets. Court bailiffs dealing with enforcement are empowered to search for assets owed by a debtor, and this is seemingly not prevented by immunity.
Immunity of international organisationsSpecific provisions
Does the state’s law make specific provision for immunity of international organisations?
International organisations generally enjoy immunity specified in the applicable international treaty. Russian procedural codes only provide that the immunity of an international organisation has to be waived in accordance with the rules of the organisation.Domestic legal personality
Does the state consider international organisations headquartered or operating in its territory as enjoying domestic legal personality and could such organisations be subjected to proceedings before a court or arbitral tribunal?
International organisations headquartered or operating in Russia enjoy immunity according to the applicable international treaty, and particularly where the relevant relationships are not of a commercial nature.
In 2011 (case No. 40-43483/06-91-295), the presidium of the Supreme Arbitrazh Court of Russia addressed the question of immunity of Interelectro, an international organisation headquartered in Moscow. The claim concerned rent agreement concluded by Interelectro. The Presidium held that payment of rent was not a commercial activity, as the sole purposes of the rented space was to provide offices for the organisation itself and not for commercial purposes.Enforcement immunity
Would international organisations in the state enjoy enforcement immunity? Are there any cases where debtors sought to enforce against a state by attaching or executing assets held by international organisations?
International organisations enjoy immunity prescribed by relevant treaties, particularly where the relevant relationships are not of a commercial nature. There are no publicly known cases where enforcement against a state was sought by means of enforcing against assets of an international organisation, and there are no reported cases where the enforcement against a state was sought by means of attaching the assets held by international organisation.
Updates & TrendsRecent developments
Are there any other current developments or emerging trends that should be noted?Key developments of the past year30 Are there any emerging trends or hot topics in your jurisdiction?
The hottest topic when it comes to sovereign immunity in Russia is, of course, the case of Tatneft v Ukraine, which is still ongoing and which might shape the debate in relation to sovereign immunity in Russia in the near future.