NSP's lawyers won the first case considered by a Russian court on recognition and enforcement of the decision of the Beijing Arbitration Commission (BAC)
Zaragizh case: how a small village in Kabardino-Balkaria became the source of a dispute in Beijing over construction of a hydroelectric power plant.
NSP represents the interests of ZhefuHolding Group Co., LTD (a Chinese hydraulic power equipment supplier) in the case of recognition and enforcement of the decision of the Beijing Arbitration Commission (hereinafter – “BAC”) in Russia.
The arbitration proceeding at the BAC concerned a dispute between our client and Elektrostroy Sirius LLC, the Russian company, regarding recovery of the debt under the supply agreement for hydraulic power equipment. According thereto our client undertook to supply and carry out installation supervision, as well as commissioning of equipment. The equipment was intended for construction of a small hydroelectric power plant (HPP) in Zaragizh village, the Kabardino-Balkarian Republic. The main customer of the project was RusHydro PJSC.
The total contract price was 240 million rubles, of which only 50% was paid in favor of our client. The buyer of the equipment refused to pay the remaining part upon the pretext that the equipment was of inadequate quality and the HPP was not put into operation.
In the course of the arbitration proceedings our client managed to prove that the equipment was delivered in accordance with the terms of the agreement and passed the test, the HPP is functioning, as well as the installation supervision and commissioning works were completed in full. The arbitration proceedings lasted about 1.5 years, and in the end, the panel of arbitrators recovered from the buyer the principal debt in the amount of 122 million rubles and a penalty, and also imposed other punitive sanctions.
Due to the fact that the Russian buyer did not repay the debt, the client applied to the Arbitration Court of the Amur Oblast with an application for recognition and enforcement of the foreign arbitral award. It is curious that this is the first case considered by a Russian court on recognition and enforcement of the BAC decision despite the fact that the BAC has already existed since 1995 and, along with CIETAC, is one of the authoritative arbitration courts in China.
The Arbitration Court of the Amur Oblast satisfied the application for recognition and enforcement of the arbitration award in full. Currently, we have started the procedure for the forced collection of the debt from the buyer.
We were delighted to be the first law firm in Russia that successfully recognized and enforced the BAC decision.
It will be recalled that earlier NSP achieved recognition and enforcement of two decisions of CIETAC in the high-profile Zoomlion case in the Supreme Court of the Russian Federation.
NSP continues to guard the interests of Chinese companies in Russia in cooperation with the international Chinese law firm Yingke.
P.S. If any of the readers finds any other cases where the BAC decision was previously recognized, please let us know. We have not found such cases.
If you need advice or legal assistance on the recognition and enforcement of foreign judgments and arbitral awards in Russia, please contact us at welcome@nsplaw.com
We will be happy to be of assistance in solving your problems.