evelopment of foreign-trade relationships with the far and near abroad countries, as well as development of investment processes inevitably raises a question before the entrepreneurs: what court shall be stipulated in the contract in order to have actual possibility of its decision enforcement? How often do the decisions of foreign courts fail to be enforced in Belarus? And how often do the decisions of Belarusian economic courts fail to be enforced abroad? These and some other questions were answered within the frames of “Letter of the Law”, the author program of Denis Aleinikov, Senior Partner of Law Group “Argument”, by the guest of the program – Irina Belskaya, Head of Central Legal Department of Supreme Economic Court of the Republic of Belarus..

Does the normative legal base for recognition and enforcement of foreign court decisions exist today in the country?

Yes, we do have such a base. It consists of agreements of international effectiveness as well as of internal national regulation. It is quite detailed in the part of the economic procedure laws. The Economic Procedure Code covers this issue in Chapter 28. There are a number of international agreements of general nature within the CIS frames, as well as bilateral agreements with a number of countries. We can name Conventions on Legal Assistance and Legal Relations in Civil, Criminal and Family Cases, signed in Minsk in 1993. There is also a convention with similar title, signed in Kishinev in 2002, with participation of Turkmenistan and Uzbekistan. The Agreement on Disputes Settlement procedure in connection with the economic activities, signed in Kiev in 1992, is of higher priority in relation to economic cases. For the purpose of enforcement applying of CMR Convention is also possible.

A whole range of bilateral agreements with far abroad states is being effective now. Some of them are of the soviet period, upon which Belarus completed its succession formalities. These are contracts with Hungary, Italy, Czech Republic, Slovakia and Cuba. We may also name contracts concluded by the Republic of Belarus during the current period. These are the contracts with Lithuania and Latvian Republic, Poland, Bulgaria, Vietnam, Iran and Syria. We should take into account that it is not a common practice today within Europe to conclude any new bilateral intergovernmental contracts on legal assistance due to the rules chosen by the European Union.

You are saying that EU countries do not conclude any new bilateral agreements on legal assistance. What shall business do in this situation? There is an investment or foreign-trade agreement, let’s say, between Belarus and Austria, but there is no any agreement on legal assistance. In what way may the decision of the Belarusian court be enforced in Austria or the decision of the Austrian court in Belarus?

All bilateral agreements on investment protection shall be settled by the competent courts – as a rule, commercial arbitrations, including “ad hoc” courts, but there may be also competent state authorities named. There is also a possibility for ICSID. This is International Centre for Settlement of Investment Disputes, established by the Convention on the Settlement of Investment Disputes between the States and Nationals of other States. Each party has right to choose the court from those stipulated by the agreement on investment protection. The state’s obligation to enforce such decisions has also been stipulated. But we haven’t had such practice yet, that is why there is nothing to comment on.

What countries work on the reciprocity principle today?

I could give you an example with Germany, when the Supreme Economic Court was applying to the competent authorities – Ministry of Justice, Supreme Court of Germany. We have declared that economic courts are ready to work on the reciprocity principle. The German party has taken the information into consideration. It should be noted that each state has its own understanding of the reciprocity principle. As we contacted the competent authorities of the French Republic on that topic, we were suggested to prove the ways of its implementation, i.e. the way of enforcement of their courts’ decisions. We had no arguments because we had no such applications. We do have a legal possibility to enforce such decisions, but there are no any specific applications on enforcement of German, French and other states’ decisions.

Positive experience on a number of decisions has been fixed in recent years: we had good experience with Austria, when the decision for 150 thousand Euros had been recognized. There has also been a positive precedent in Spain and in Germany. All recognition cases were based upon reciprocity principle because agreement on legal assistance with these states failed. The decision on the reciprocity principle has been also recognized in Czech Republic, and later on it was enforced on the bases of a bilateral agreement (after execution of its succession).

Where shall one apply to in our country for enforcement of a foreign court decision?

First of all, the competence according to the jurisdiction shall be divided. If we talk on all court decisions we divide them into decisions which are within the jurisdiction of the economic courts, and those which are within the jurisdiction of the ordinary courts. If we talk about economic courts today, then according to the jurisdiction rules, economic courts of the regions of the debtor’s location or his property’s location shall be competent courts in that case.

Can a Belarusian court waive recognizing the foreign court’s decision enforcement?

May be, it has right to do so. These reasons have been prescribed in the existing international contracts on legal assistance and in our Economic Procedure Code. They do not bear any procedural nature, i.e. the decisions can not be reconsidered in the essence; that means that the wrong application of the legal regulation shall not be the reason for a waiver. Whereas the foreign courts have different experience. I have just a fresh example – a Lithuanian court has waived recognizing our decision on the principal debt amount due to the reason of public order violation in the part of interest recovery which had seemed to be overrated. Our court does not interfere with the decisions of the foreign courts, so such an approach is not possible.

Our practice shows that the reason for a waiver shall be the case when the party against which the decisions had been made, failed to be timely notified in due order of time and the place of consideration of the case or due to any other reason failed to provide the court with its explanations. It should be noted that foreign courts usually deny recognizing ours primarily due to the similar reason. Any other reasons in the economic courts practice have not occurred recently.

A substantial number of applications on recognition of foreign court and arbitration decisions have been returned without consideration due to the non-payment of the state duty.

What are the refusal reasons for enforcement of the arbitral awards?

Arbitral awards are subordinate to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, including a well-defined list of reasons for recognition waiver. Among them are the following: the dispute is subject to exclusive jurisdiction of the public courts and may not be referred to arbitration; when the arbitration clause conditions have not been observed; when the composition of the court failed to comply with the agreement of the parties; when a party has not been notified of the arbitration; when the decision has not come into force. These are purely procedural reasons; the awards are not reconsidered ad rem.

Some foreign lawyers are of stereotyped view which they express to their clients, to the people working with our country that the Belarusian court may refuse to enforce any foreign arbitral award pursuant to the public order clause. Is it true?

Such a reason is coming from the above mentioned New-York Convention; that is why it is included in our Economic Procedure Code. No country has adopted the concept of the public order on the legal level. The courts interpret such a concept as violation of the law and order fundament and the main legality principle. We may reassure the foreign lawyers by saying that “the devil is not as black as it is painted”. Waiver due to such reason as violation of the public order has not been applied by the economic courts for several years. We make yearly analysis of the court practice on such case category. This reason has been applied in some individual cases in the beginning of 2000-s,  and there has been no any waivers to enforce foreign court decisions or arbitral awards due to the violation of the public order lately.

How often has it been waived to recognize enforcement of foreign courts’ decisions during 2009-2010?

For example, 46 applications on recognition of enforcement of foreign and arbitral awards were received in 2009, besides, most of them, 59% were on recognition of arbitral awards. 21 applications were returned to the claimants due to the noncompliance with the requirements for execution of applications and attached documents. 25 applications were examined, 6 applications on recognition of foreign courts’ decisions and 17 applications on recognition of foreign arbitral awards were satisfied. Two cases were waived due to the reason that the party, against which the decision had been made, was not duly notified of the time.

In the first half of 2010 (in the first half of 2009 -21 applications) 43 applications on recognition and enforcement of foreign courts’ decisions and foreign arbitral awards were received. 21 of them were examined, 4 applications on recognition of foreign courts’ decisions, 14 applications on recognition of foreign arbitral awards were satisfied. 3 decisions of foreign courts were waived to be enforced due to the reason that the party against which the decisions had been made failed to be duly notified of the time and place of case consideration or due to some other reasons failed to offer its explanations to the court. I show you all figures. As you see, we are open and do not hide anything. The economic courts have not stated any public order violations last year, neither this year.

You are saying that the applicants make some technical errors while executing their applications. What are the errors they are making? What errors have been more frequently made by the parties which we may pronounce now?

Let’s proceed from the point that the economic courts are dealing with clear procedural forms. There are requirements settled for the applications and for the annexes thereto. Everything has been clear-cut prescribed also in international agreements. The most frequent errors lie in incorrect or not full specifying the data connected with addresses, incorrect reproducing of the names and titles. We have recently had a situation when a foreign court has incorrectly named the legal form of the entity. If such an application had been accepted, the decision could have been formally attributed to a quite different entity. Such errors have organizational features. Careful diligence and observance of legal requirements help to avoid them. One more reason for return of the documents is lack of duly executed translation. But the most frequent reason for return of the application without its consideration is lack of confirmation of the state duty payment for its consideration.

What shall the Belarusian court do in case when all documents have been executed correctly? By what procedural actions and document shall the procedure of the document’s consideration be finished?

Consideration of an application is a procedural procedure: court proceeding with notifying the participants of the case upon the results of which the determination on recognition and enforcement of the foreign decision shall be issued. On the basis of this determination the enforcement document may be issued upon the persons’ application. After such a procedure the decision shall be enforced in the similar order as our internal court decisions, particularly in the enforcement proceeding.

Being a specialist dealing with the methodology of these matters, what are your recommendations for businesses concluding agreements between foreign and Belarusian companies? What court shall be chosen – the state one or the arbitration? What criteria shall be guided by in that case?

The first thing the entity shall examine is whether there is a public contract on legal assistance with the entity of a certain state. This information is transparent and may be found in any legal base. If there is such an agreement then the state court shall be preferred. In such cases Supreme Economic Court shall assist in delivery, because under the contracts, we are the central body in the republic, consequently, all documents check in the preparation stage is economic court’s responsibility area. If the agreement on legal assistance fails, then one shall find out the possibilities for commercial arbitration. As an option one may set hope upon the reciprocity principle. But you shall bear in mind that it is important to clarify the terms which the entity may come across in any of the alternatives and what expenses it will face in the future in each specific situation.

Can we say that it is easier for the entrepreneurs to choose the arbitration body for disputes settlement, and then the only thing to do is to decide, whether it shall be the Belarusian or the foreign one?

Unfortunately, there is no unique solution for this problem. Nobody knows how the Belarusian arbitral awards are enforced in any other states. The whole procedure is the responsibility field of the entity itself. It happened very frequently that during previous years we have got applications of the economic courts on assistance of the recognition procedure of arbitral awards. But according to the terms of the New York Convention on decision recognition, the public courts can not participate in this process. It turns out that this is direct concern of the entity itself starting from preparing of the documents, searching of the competent court in a foreign state and sending the documents. That is why it is not possible to name any evident priority. Each case requires individual approach. It is worth mentioning preliminary clarification of all terms and conditions prior to signing the contract among absolute recommendations. When the subject is choosing the court and the applicable law for itself, any court shall recognize this choice of the parties while assessing its jurisdiction.

You are saying that the Economic Court is assisting in enforcement of the state court decision abroad. What assistance you are talking about? What do you do?

As far as we are a central body upon the majority of contracts, after preparing the documents the subject is sending them to the Supreme Economic Court. They shall be checked in the court, and in case something fails, recommendations will be given on the matter, what shall be removed or supplemented. The court is sending documents to the settled channels, sometimes we apply to the Foreign Ministry. We shall understand that the issues on recognition of court decisions are not being settled as promptly as they are in Belarus. One shall get ready for the long process, sometimes for several years. The settled term for application consideration is one month from the application’s receipt by the court. Sometimes we apply to the competent foreign authorities repeatedly and ask them to notify us of the application’s destiny of a certain entity.

Enforcement of Belarusian economic courts’ decisions abroad rather fails than has lucky outcome. What are these failures connected with?

The failures are associated with the requirements of the national legislation of the corresponding countries. Not all the countries are providing priority of international contracts over national laws. Some countries settle actually new case consideration ad rem. From time to time participation of the national attorneys is required to apply to the competent court. We put forward our national requirement to pay the state duty which has not been stipulated in the international agreements, though all national law systems do stipulate it at home. If any entity failed to pay the state duty it shall be the reason for application return. As the reason for application return may also be lack of the entity’s stamp on the application or lack of official stamps on the court decisions. Frequently lack of the contract on legal assistance shall be given by the states as the reason for waiver of decision enforcement and the reciprocity principle shall not be taken into account at all. We do face it very often.

If we talk about certain countries, for example, the USA, is it possible to enforce the Belarusian court decision there?

As far as it goes to the USA, the general “No- answer” would be correct. Neither the economic court decisions, nor the commercial arbitral awards are enforced there. As we tried to enforce a decision in America several years ago, we got rejection by such an odd reason as “We do not have a contract on legal assistance with Russia”. This is the answer we have got several times already. The situation with Russian decisions is similar. The USA does not enforce them either. It is known that Russians introduced the diplomatic notes of protest to Americans several years ago, because they have settled their own delivery procedure violating the procedure for judicial documents delivery settled by the Convention. The Americans consider that the party shall pay for delivery of documents 80 dollars to the ad hoc entity. There is no such a payment requirement under the Convention and no state is making such a demand. But Americans do not deliver documents without due payment. Our courts also have problems in connection with delivery of the judicial documents.

Are there any peculiarities in enforcement of Belarusian courts’ decisions in Baltic countries?

Yes, there are some essential peculiarities in our mentality, lying in the nature of the law enforcement service which is not state but the private one. That means they are private law enforcement officers. In order to apply for the enforcement after recognition of our court decision by the competent court (there are no any problems with that in the practice), it is necessary to find a territorially competent law enforcement officer and to pay a certain amount of money to his deposit account. This deposit account shall ensure the costs for the search of the debtor and for enforcement. These are obligatory conditions for our entities to fulfill independently.

What is happening in CIS countries, in Ukraine or in Russia, for instance?

We have very similar court system with that in Ukraine. They also have economic courts there. In the practice we predominantly come across the arbitral awards and quite rarely face the state court decisions. So we may state that arbitration is quite popular there. Our decisions shall be enforced in Ukraine upon Convention on Legal Assistance in Civil, Criminal and Family Cases and Agreement on Settlement of the Disputes connected with conducting of economic activities. There are no any difficulties related to enforcement.

We have a peculiar legal regime for the court decisions with Russia. We have made an agreement on mutual enforcement of economic courts’ decisions and arbitral awards, according to which the court decisions shall be enforced in the national regime. We enforce Russian decisions the way we do our own, without any additional recognition procedures, so do the Russian courts enforcing the economic courts’ decisions. In the beginning of 2000-s, when the agreement came into force, there were some practical problems and some entities applied to us for the explanation and assistance, but we have not been aware of any such problems lately. It indicates that the agreement works and the decisions are being enforced. We have no any difficulties with Russia in that respect.

We have already discussed the issue in connection with the notifying of the Belarusian legal entity of the proceeding taking place somewhere abroad. Let’s assume that a Belarusian enterprise sees that the economic court has got an application on recognition and enforcement of the foreign court decision. Along with that the Belarusian economic entity has never participated in any foreign court and has not been notified of that. What does he have to do? How shall he struggle for his rights and does he have any?

First of all, such process is not to be ignored and the situation shall not be suppressed. Sometimes the parties just fail to appear before the economic court. It is the obligation of the court and not of the entity to declare to the court that he failed to be duly notified and this is the reason for non-recognition of the court decision. Such a right has been granted to him by the Economic Procedure Code and such a court sitting shall be held with prior invitation of the parties. But the court shall not clarify this case preventing the recognition of the court decision at its initiative. It is the obligation of the party to declare and to prove the specified fact.

What shall be understood under “due notification”? For example, some paper was received per facsimile, shall it be deemed as “due notification”?

The notification issues are a separate legal problem. It is reasonable to say that such a notification shall be done in accordance with the requirements of the international agreement. There are some more independent forms, but they are in force if the person does not object to, let’s say, a notification per telephone. If the party shall not object to it in the future, there may be no such a problem. The Convention does not prohibit using different notification forms. In order to clearly secure observing of notification order in a procedural way, it is necessary to send the documents in due order. We have a Convention on delivery, the above specified agreements on legal assistance which contain the notification provision. It is desirable to avoid in the future applying such a reason as lack of due notification of the party for refusal of recognition of our decisions, that resulted in the impossibility to protect the rights in the court and to pay proper attention to delivery issues either.

When concluding investment agreements foreign contractors frequently insist on disputes consideration in the International Center for Settlement of International Disputes (ICSID). What do you think about that? Is it efficient? What is the procedure of execution of the ICSID decision in Belarus?

ICSID shall be referred to not only in private economic contracts, but also in investment intergovernmental agreements. There is legal base for recognition and execution of its decisions. I can give no comments from the aspect of the practical implementation due to the lack of such applications in the economic courts.

What trade has been outlined in connection with the interaction with the foreign justice authorities within the last few years? Has it become easier or more difficult to enforce Belarusian courts’ decisions abroad?

The Supreme Economic Court and its President Victor Sergeyevich Kamenkov have taken up the following position in cooperation with the foreign courts: as far as Belarus does not always manage to conclude new international agreements, we shall conclude agreements on exchange of legal information between the courts and thus to reduce the communication way between the courts. We have efficient number of such agreements. (This information is available in the Internet on our site). Just two weeks ago such an agreement was signed by our President with the Supreme Court in Turkey. We have such agreements with China, Cuba, Vietnam, Venezuela, and all CIS countries. These agreements allow us to clarify the substance of the foreign law. Apart from that, Supreme Economic Court is a member of International Association of Law Enforcement Officers uniting Africa, Asia, America and Europe. This enables obtaining the legal information required for enforcement. It is intended to conclude similar agreements with Hungary, France and some other states.

It won’t be easy: any international cooperation is a long-term process, but we do move forward. There are no insuperable problems any more we faced in the beginning of 2000s, when nobody knew about Belarus and our legal system. The Supreme Economic Court is participating in all international judicial summits. Moreover, it holds international scientific and practical conferences with sufficient number of foreign participants, which makes it possible to study experience of different countries and build their legal regulation on a high international level and enables us to be heard on any tribune. The more they know about us the easier it will be for our entrepreneurial entities to protect their rights in our courts and abroad. So we may state the positive dynamics.