Russia / 12 January 2009 / Russia, Федеральный арбитражный суд Московского округа (Federal Arbitrazh Court for the Moscow District) / Frontpoint Global Emerging Markets Fund, L.P. v ZAO Factoring Company Eurokommerz / A40-59798/09-69-546
| Country | Russia |
| Court | Russia, Федеральный арбитражный суд Московского округа (Federal Arbitrazh Court for the Moscow District) |
| Date | 12 January 2009 |
| Parties | Frontpoint Global Emerging Markets Fund, L.P. v ZAO Factoring Company Eurokommerz |
| Case number | A40-59798/09-69-546 |
| Applicable NYC Provisions | II | II(3) |
| Source |
http://kad.arbitr.ru (register of decisions of the RF arbitrazh courts) |
| Languages | English |
| Summary | On 19 June 2008, ZAO Factoring Company Eurokommerz (“Eurokommerz”) was granted a loan by JPMorgan Chase Bank (“JPMorgan”) under a loan agreement (the “Loan Agreement”). JPMorgan’s rights under the Loan Agreement were subsequently assigned to Frontpoint Global Emerging Markets Fund, L.P. (“Frontpoint”). After Eurokommerz defaulted on the loan, Frontpoint initiated proceedings in Russia. The Moscow Arbitrazh Court (court of first instance) refused to hear the complaint because the Loan Agreement contained an arbitration clause. The first instance ruling was overturned by a decision of the Ninth Arbitrazh Court of Appeal (court of appeal) which gave a different interpretation to the arbitration clause. The court of appeal noted that the Loan Agreement provided for different dispute resolution options which gave the financing party a unilateral option to refer the dispute either to arbitration, or to the English courts, or to “any other competent court”. On this basis the court concluded that Frontpoint’s decision to refer the case to the Moscow court was valid. Eurokommerz filed a cassation complaint before the Federal Arbitrazh Court for the Moscow District (court of cassation) alleging that the decision of the Ninth Arbitrazh Court of Appeal violated Article II(3) NYC by failing to refer the parties to arbitration. The Federal Arbitrazh Court upheld the decision of the Ninth Arbitrazh Court of Appeal recognising the jurisdiction of the Moscow Arbitrazh Court. Without referring to NYC, it concluded that, on the basis of a systematic and consistent interpretation of the Loan Agreement, that agreement provided for different dispute settlement options depending on whether the creditor or the debtor brought the claim. The court of cassation found the optional dispute settlement mechanism valid, as the option was given to the creditor in exchange for the financial risk it assumed. The court also noted that the clause was valid under English law, which was the law applicable to the Loan Agreement. |
| affirmed by : |
Attachment (1)
 Original Language Adobe Acrobat PDF |
