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APPLICATION OF A PUBLIC POLICY CLAUSE IN THE PROCEDURE OF RECOGNITION AND ENFORCEMENT OF FOREIGN COURT DECISIONS AND FOREIGN ARBITRAL AWARDS IN THE REPUBLIC OF BELARUS

The definition of public policy is contained in Art. 1099 of the Civil Code of the Republic of Belarus (hereinafter - the Civil Code): “The foreign law shall not be applied in instances when its application is contrary to the fundamentals of the law and order (the public policy) of the Republic of Belarus, as well as in other cases, directly provided for by the legislative acts. In these instances, the law of the Republic of Belarus shall be applied".

Public policy in art. 1 of the Law of the Republic of Belarus of 09.07.1999 N 279-Z “On the International Arbitration Court” also defines as the fundamentals of the law and order of the Republic of Belarus.

On the 26 of June 2013, the Presidium of the Supreme Economic Court of the Republic of Belarus issued the Methodological Recommendations on certain issues of the consideration by the economic courts of the Republic of Belarus of cases, which involve foreign persons and the provision of legal assistance (hereinafter – the Recommendations).

According to paragraph 98 of the fundamentals of the law and order are norms of the Constitution of the Republic of Belarus, provisions of international treaties of the Republic of Belarus, basic principles of fundamental branches of law.

The basic principles of the basic branches of law, except the principles reflected in the Constitution of the Republic of Belarus, are:

in civil law - the principles contained in article 2 of the Civil Code:

the rule of law; the principle of social orientation of the regulation of business activity; principle of public interests priority; the principle of equality of participants of civil relations; inviolability of property principle; principle of freedom of contract; the principle of good faith and reasonableness of participants of civil legal relations; the principle of the inadmissibility of arbitrary interference in private affairs; the principle of free implementation of the civil rights, ensuring the recovering of the violated rights, judicial protection of rights;

in procedural branches of law - the principles reflected in the Code of the Republic of Belarus on the judicial system and status of judges:

principles for exercising the judicial power only by courts (Article 2); independence of the judicial power (Article 2); recognition of compulsory execution throughout the territory of the Republic of Belarus of court decisions that entered into legal force (article 4); legitimacy in the administration of justice (article 7); equality of citizens and organizations before the law and the court (Article 8); the rights of citizens and organizations to judicial protection (article 10); the state language of legal proceedings and correspondence in the courts (Article 13); the binding nature of court rulings and the demands of a judge (Article 14).

Public policy clause may be applied in case of violation of the above-mentioned principles and rules.

In the current Belarusian legislation, public policy clause as the grounds for the refusal to recognize and enforce a foreign court decision or a foreign arbitral award is contained in article 248 of the Economic Procedural Code of the Republic of Belarus and article 11 of Appendix No. 4 to the Civil Procedure Code of the Republic of Belarus.

Section 2 of Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, concluded in New York on 10.06.1958 (hereinafter - the Convention), establishes that "recognition and enforcement of an arbitral award may also be refused if the competent authority of the country where recognition and enforcement is sought finds that: ... the recognition or enforcement of the award would be contrary to the public policy of that country".

Section 2 (b) of Article V of the Convention allows the state court to investigate the question of whether the recognition and enforcement of an arbitral award would contradict the country's public policy on its own initiative. In such a case, the court could refuse to recognize and enforce a foreign arbitral award.

It is necessary to pay attention at the approaches developed by the judicial practice of the economic courts of the Republic of Belarus to an application of public policy clause when dealing with cases on recognition and enforcement of foreign decisions and arbitral awards:

1. In the process of checking the arbitral award for compliance with its state public policy, the court should analyze only the consequences of recognition and enforcement of a foreign judicial act, and not deal with the identification of defects in the decision. A foreign court decision itself cannot contradict to the public policy of a country; only the consequences of recognition and enforcement of a decision or award can.

The possibility of applying the public police clause in cases of recognition and enforcement of foreign court decisions is also provided by the Chisinau Convention (Section 59) of the Treaty with the People’s Republic of China (Article 21, paragraph 5).

In cases when the international treaty of the Republic of Belarus does not provide the possibility of applying the public policy clause, the verification of compliance of the consequences of recognition and enforcement of a foreign court’s decision with the public policy of the Republic of Belarus occurs only within the limits of verification of compliance of such consequences of recognition and enforcement with the Constitution of the Republic of Belarus.

2. In the absence of an international treaty which must be applied, the public policy clause shall be applied under the same terms as any other eligible.

3. Opening the bankruptcy procedure of the debtor or the possibility of his economic insolvency cannot be the basis for refusal to recognize and enforce decisions of foreign courts, foreign arbitral awards on grounds of contradiction to the public policy.

4. In case a part of an arbitral award that violates the public policy can be separated from the part that does not violate it, then that part of the decision that does not violate the public policy can be recognized and enforced.

5. The economic court cannot refuse to recognize and enforce a foreign court decision, a foreign arbitral award on the grounds of violation of the public policy of a foreign state.

6. The incorrect application of legal norms cannot be considered as a violation of the public policy, because the court can make a conclusion about the incorrect application of legal norms only in the case of studying all the materials of the case, reviewing the decision of the merits.

In the judicial practice of the economic courts of the Republic of Belarus references of the parties to the necessity to apply the public policy clause, the parties poorly perceive the content and limits of application of the public policy clause.

For example, there was a case considered on recognition and enforcement of the decision of the Zadneprovsky District Court of Smolensk, Russian Federation on the recovery of more than 150,000 rubles in reparation from the railway department. In that case, the Minsk City Court rejected the debtor’s argument that the execution of the decision threatens the security of the Republic of Belarus since the state enterprise is in a difficult financial situation.

The court reasonably considered that full compensation for the harm caused to the life and health of a citizen complies with the basic principles of the civil legislation of the Republic of Belarus and does not threaten the security of the Republic of Belarus.

Within the consideration of another case, the debtor stated that the exercise of the rights of the claimant to authorize the enforcement of a foreign court decision is an abuse of the right and contradict to the public policy because the enforcement proceeding was instituted in the Russian Federation.

The Judicial Collegium for Civil Cases of the Supreme Court of the Republic of Belarus noted that debtor’s arguments are unfounded the court decision of the recovery of unjust enrichment corresponds to the basic principles of the civil legislation of the Republic of Belarus, does not threaten security of the Republic of Belarus and the universally recognized principles of international law are not violated.

 

Korochkin Alexey, attorney,

senior partner of the Law Group “Bureau 24”,

Ph.D., associate Professor

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220030, Minsk, Nezavisimosti avenue, 11\2 off. 503