⚖️ The Moscow City Court Granted an Application for Recognition and Enforcement of a DIAC Award in Favor of a UAE Company Against a Russian Individual

A contract was concluded between Vitoil Limited Company (the Company), United Kingdom, and SIBET FZCO (the Claimant), UAE. To secure the Company’s obligations under the main contract, a guarantee agreement was also concluded between the Claimant and a Russian individual (the Interested Party). The guarantee agreement contained an arbitration clause in favor of DIAC.

Since the Company failed to perform its obligations, the Claimant initiated DIAC arbitration proceedings against the Interested Party under the guarantee agreement. During the arbitration, the parties entered into a settlement agreement, under which the Interested Party was obliged to make payments to the Claimant in accordance with an approved schedule. In case of non-payment, interest at the rate of 19% per annum was also to accrue on the principal debt. The parties' settlement agreement was approved by a DIAC arbitral award on agreed terms.

The Interested Party paid only part of the established amounts; therefore, the Claimant applied to the Moscow City Court for recognition and enforcement of the DIAC arbitral award.

The Interested Party, in turn, objected to the granting of the application, arguing its position on the following grounds:

👀 The case is not within the jurisdiction of the Moscow City Court, as it should be heard by the Arbitrazh (Commercial) Court of Moscow;

👀 The Claimant did not provide evidence of reciprocity of enforcement of arbitral awards in Russia and the UAE, nor of an international treaty between Russia and the UAE on mutual recognition of arbitral awards, which would make it impossible to recognize the DIAC arbitral award in Russia;

👀 The Interested Party was not properly notified of the commencement of the arbitration proceedings;

👀 The debt arising from the parties' settlement agreement has already been partially repaid by the Interested Party, which prevents the recognition of the arbitral award in Russia.

The Moscow City Court disagreed with the Interested Party’s position and relied on the following circumstances:

🔘 Russia and the UAE are parties to the New York Convention; therefore, the Interested Party’s argument regarding the absence of an international treaty between Russia and the UAE on mutual recognition of arbitral awards is not relevant;

🔘 The mechanism for recognition and enforcement of foreign arbitral awards established by the New York Convention also applies to arbitral awards rendered in disputes between individuals;

🔘 Since the Interested Party is an individual registered in Moscow, the Moscow City Court is the competent court to hear the Claimant's petition;

🔘 The Interested Party was duly notified of the commencement of the arbitration and also actively participated in the process of appointing arbitrators;

🔘 The circumstances of partial repayment of the debt are taken into account to reduce the amount to be recovered but cannot serve as a ground for refusing the application to enforce the arbitral award;

🔘 The Russian Ministry of Justice included DIAC in the register of PDAUs (Permanent Arbitration Institutions) in 2026, which indicates that there are no obstacles to the recognition and enforcement of the arbitral award issued by it.

As a result, the Moscow City Court granted the application for recognition and enforcement of the DIAC arbitral award on the territory of the Russian Federation.

📎 Information on the case can be found at the link.

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