New York Supreme Court claimed to be Russia’s court of higher instance

Strange events are happening in the world. It seems that Russia is a USA’s ally right now, together we are struggling with international terrorism, establishing closer energetic (and other) cooperation. However, nothing has been heard yet about the subordination of the Russian judicial system to the American Ministry for Justice, for example. A private legal conflict is gathering steam in the world of justice, which is likely to turn to the political dispute about the priorities of Russia’s and USA’s judicial systems.

As the Kommersant newspaper reported, the Supreme Court of New York prohibited the National Reserve Bank of Russia to execute the decision of the Supreme Court of Russia and to sue the French company Credit Agricole Indosouez (CAI) in Belgium and France.

The story started back in 1998. Credit Agricole Indosouez concluded 14 forwarding contracts with the National Reserve Bank before the financial crisis in Russia. The Russian bank did not execute the contracts after the default. CAI addressed to the court of New York, which resulted in the arrest of the bank’s accounts in Belgium (in the sum of 500 million dollars) in April of 1999. The National Reserve Bank filed a lawsuit at the Russian Supreme Court, which then ruled that the forwarding transactions were null and void. The Supreme Court of Russia resolved to levy the damage from CAI in favor of the National Reserve Bank’s. Avtobank was notified in July of the year 2002 that its payment on the forward contract to CAI would be arrested for the National Reserve Bank’s favor, because the latter had an act of execution to the French company in the sum of $75 million. CAI got really worried.

The mentioned newspaper wrote that the National Reserve Bank was prohibited to arrest CAI’s assets, institute new criminal proceedings, or conduct the proceedings, which had already been executed, until the official legal decision on the matter. In other words, the Supreme Court of New York (the court of the first instance) prohibited to execute the decision of the Russian Arbitration Court, which ruled to levy $75 million from CAI. The American court virtually cancelled other decision of the Supreme Arbitration Court of Russia – regarding the nullity of the transactions on forward contracts between the National Reserve Bank and CAI.

President of the National Reserve Bank Alexander Lebedev said to journalists that the bank would not appeal against the decision of the New York court. This verdict actually set the predominance of American laws vs. Russian ones.

There has been no agreement signed between Russia and the USA pertaining to the order to acknowledge courts’ decisions or about the assistance in civil cases. There is only one document in this respect – the agreement of 1936 regarding the order to convey writs. Pursuant to this document, all court decisions are supposed to be conveyed by means of diplomatic mail, with the use of the channels of the ministry for justice. This means that any independent legal actions of any Russian citizen in the USA deprive him of any political support of the state. France and Belgium have such agreements with the USA, that is why the Supreme Court of New York was entitled to issue such a decision. Who is guilty of the fact that Russian bankers and lawyers do not know such things and do not take any measures about it?

It is easy to understand the confusion of the President of the National Reserve Bank, but it is hard to realize his intention to go to the Supreme Arbitration Court, Justice Ministry, the Office of the Prosecutor General, and the like. These departments can hardly make the American judge change his mind. The Russian business is simply helpless, when it comes to international issues (so is the American business in Russia).

The Kommersant also wrote that Vladimir Putin contacted Jacques Chirac on this question, it was said that the presidents even agreed to devote inter-governmental negotiations to this subject. No one knows, if the Supreme Court of New York is going to listen to the results of those negotiations, or not: Western judicial systems are totally independent.

Dmitry Slobodyanyuk PRAVDA.Ru

Translated by Dmitry Sudakov

Subscribe to Pravda.Ru Telegram channel, Facebook, Twitter, YouTube, RSS!

Author`s name: Editorial Team