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
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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