Ministry of Finance of the Russian Federation
Ministry of Finance of the Russian Federation
28.07.2011

Press release

 

 

The Ministry of Finance of the Russian Federation informs that in the first semi-annual of this year, two international arbitral panels rendered the awards dismissing the claims asserted against the Russian Federation as part of contestation of the decisions made by the Ministry of Finance of the Russian Federation in the course of settlement of the trade indebtedness of the former USSR. Claims asserted by the claimants were not included by the Ministry of Finance of the Russian Federation in the restructuring program as non-complying with criteria defined by Resolution of the Government of the Russian Federation No. 931 of December 29, 2001 “On the Settlement of the Trade Indebtedness of the Former USSR to Foreign Trade Creditors”. The aforementioned awards have entered into legal force.

In the first case, EM Investments ApS v. OJSC Sudoimport and the Russian Federation, an arbitral tribunal ruled that the Russian Federation did not have any obligations under the contract concluded by the Soviet foreign trade organization. In this regard, the tribunal concluded that it lacked jurisdiction to consider the claims asserted against the Russian Federation. In addition, the tribunal refused to satisfy the claims on their merits and held that the claimant had breached contractual obligations, including a failure to supply the goods. It should be noted that the latter circumstance was the reason for the Ministry of Finance’s decision to consider this claim ineligible for settlement.   

In the second case, Cesare Galdabini SpA v. the Russian Federation, an arbitral tribunal held that it did not have jurisdiction over the claims asserted by the claimant in accordance with the dispute resolution procedure established by the Italy-Russia Bilateral Investment Treaty dated April 9, 1996. In the course of settlement by the Russian Federation of the trade indebtedness of the former USSR, the claim asserted by the claimant was not admitted for restructuring due to decentralized financing of the contract concluded by the claimant with the Soviet foreign trade organization. Thus, the Ministry of Finance of the Russian Federation defeated the attempt to use the international treaty of the Russian Federation (in this case, a bilateral investment treaty) as a means to challenge legitimate and well-grounded decisions adopted by the Ministry of Finance of the Russian Federation in the course of settlement of the trade indebtedness of the former USSR.

 

Press-service of the

Ministry of Finance of the Russian Federation