In a revolutionary judgment issued by the Federal Arbitradz Court of Northwest District of Russian Federation in the case NA 56-9512/2009, FINESTERRE RECOVERY FUND I LTD & OTHERS confirmed that Russian Courts have jurisdiction to issue interim relief in aid and in support of pending foreign Court proceedings provided that the dispute arises out of economic and business relations.
In the above decision the applicants filed in Cyprus a winding up petition against a Cypriot Company, on the basis of a claim arising out from bonds in excess of USD 157 million.
In aid and in support of the above winding up proceedings pending in Cyprus, the petitioners/creditors of the Cyprus Company, applied before Russian Courts to obtain interim relief to secure assets of the Russian Subsidiaries of the Cypriot debtor Company in support and/in aid of the pending Cyprus action.
More specifically the petitioners of the Cypriot winding petition, requested the freezing of the sale and disposal of shares owned by the Cypriot debtor Company in Russian Companies, as well as to block the exercise of voting powers in the said Russian Subsidiaries, approving disposal of assets, increase of share capital, liquidations etc.
The First Instance Russian Arbitradz Court, dismissed the application for interim relief in aid and/or in support of the Cyprus action, on the ground that it did not have jurisdiction to issue such interim relief in support of foreign proceedings.
The above Federal Arbitratz Court finally confirmed the existence of such jurisdiction.
The above decision might be of a great assistance to Claimants in Cyprus proceedings in obtaining interim relief in Russia by freezing assets of the Cyprus holding Company or blocking the taking of decisions by the Shareholders or directors of its Russian Subsidiaries in aid and in support the Cyprus action.
Full text of the above Russian Court decisions, as well as an unofficial English translation of same, are published in our website.
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