Legal issues of recognition and enforcement of foreign insolvency judgments

Abstract

This article is devoted to the problem of the grounds for recognition and enforcement of foreign insolvency judgments (primarily Russian) in bankruptcy cases, where decisions on bringing controlling persons to secondary liability will serve as an example. As general grounds for recognition and enforcement of foreign insolvency judgments in bankruptcy cases it is necessary to single out procedural and substantive grounds directly related to the nature of secondary liability in a bankruptcy case. The procedural grounds for recognition and enforcement include: (i) the existence of an international treaty, (ii) the existence of the principle of reciprocity, (iii) the absence of sanction status of the major creditor, (iv) compliance by the decision with the public policy of a particular state. In terms of the substantive grounds for recognition and enforcement of a foreign bankruptcy judgement, the sanction contained in the judgement should have a private, rather than public nature. The author has demonstrated that secondary liability in insolvency (bankruptcy) cases has more of a public nature and is characterized as repressive, as there are no mechanisms of exemption from such liability, which is the reason for refusal to recognize and enforce Russian court decisions on bringing to secondary liability in foreign courts.

References

1. Braginskiy, M.I. and Vitryanskiy, V.V. (2020). Contract Law: General Part. Moscow (in Russ.).
2. Gutnikov, O.V. (2019). Corporate liability in civil law. Moscow (in Russ.).
3. Kostin, A.A. (2019). Cross-Border insolvency and international commercial arbitration in Russia (procedural and substantive aspects). Commercial arbitration review, 9, pp. 120–142 (in Russ.).
4. Rykov, I. (2017). Secondary liability in the Russian Federation. Moscow (in Russ.).
5. Shitkina, I.S. (2017). Proprietary liability of controlling persons in insolvency: new legal innovations. Economy and Law, 11, pp. 41–61 (in Russ.).
6. Shitkina, I.S. (2017). Secondary liability of controlling persons: new opportunities. Law, 8, pp. 8–13 (in Russ.).
7. Bork, R. (2024). Cross-Border Insolvency Law. The Anatomy of Corporate Insolvency Law. Oxford.
8. Koziol, H. (2015). Basic Questions of Tort Law from a Comparative Perspective. Wien.
9. Redfern, A. and Hunter, M. (Eds.). (2014). Law and practice of international commercial arbitration. London.
10. Michaels, R. and Jansen, N. (2006). Private Law Beyond the State? Europeanization, Globalization, Privatization. American Journal of Comparative Law, 54, pp. 843–890.
11. Mongano, R. (2024). Directors' Duties in the Vicinity of Insolvency, Disqualification, Piercing the Veil. The Anatomy of Corporate Insolvency Law. Oxford.