Reciprocity Between Germany and Russia: Russian Court Reverses Recognition of German Judgment

On 1 April 2025, the Arbitrazh Court of the North-Western District (St. Petersburg) issued a landmark judgment in case no. A56-49800/2024, reversing an earlier decision that had recognized and enforced a German court ruling. The case, involving a claim by Viavi Solution Deutschland GmbH against Russian company OOO Vilkom SPb, has been sent back to the lower court for reconsideration.

This marks a significant turn in the ongoing legal developments surrounding recognition of foreign judgments between Germany and Russia, particularly in light of recent geopolitical and regulatory changes. This decision notably complicates the previously emerging trend toward reciprocity.

Case Background: Enforcement of a German Judgment in Russia

In 2021, the Regional Court of Stuttgart (Landgericht Stuttgart) issued a commercial judgment ordering OOO Vilkom SPb to pay Viavi over EUR 85,000 and USD 68,000, plus interest and legal costs. Viavi sought enforcement in Russia, and in October 2024, the St. Petersburg Arbitrazh Court granted recognition.

However, Vilkom appealed, asserting that:

• The original German judgment referenced an individual (Lisunov) without proving their status as an entrepreneur, calling jurisdiction into question.
• Recognition depended on the principle of reciprocity, which Vilkom argued no longer applied due to sanctions and strained diplomatic relations.
• The company had received inadequate notice under the Hague Service Convention.
• Enforcing the judgment would violate Russian public policy, as Vilkom claimed it never traded with Viavi and received no goods.

Judgment Analysis: Key Legal Findings and Public Policy Concerns

1. Insufficient Justification by First Instance Court

The appellate court ruled that the first instance decision failed to explain why public policy objections were rejected, violating procedural requirements under Article 170 of the Russian Arbitrazh Procedural Code.

2. Reciprocity Between Germany and Russia

While Germany only entered Russia’s list of “unfriendly countries” in March 2022, the court ruled that this status should not retroactively affect a 2021 judgment. Still, it held that the reciprocity principle requires factual verification, especially in light of changing political circumstances.

3. Suspicion of Abuse of Process and Capital Export

The judgment stresses that courts must consider whether enforcement of foreign judgments may be used to legitimize unlawful financial transactions, including possible money laundering. The court cited Supreme Court guidelines requiring the involvement of regulators like Rosfinmonitoring where suspicious circumstances arise.

Conclusion: Has Reciprocity Reached Its Limit?

This ruling confirms that the earlier decision from October 2024 war rather an accident than a conscious decision of Russian courts to facilitate the recognition of German judgements.

Key Takeaways:

• Courts may refuse enforcement if foreign judgments appear to violate Russian public policy.
• Proof of actual commercial relations will likely be required.
• Courts are encouraged to investigate whether judicial mechanisms are misused to facilitate capital flight or money laundering.
• The presence of the creditor in an “unfriendly country” raises the burden of scrutiny and in fact, chances of enforcing a judgement from an “unfriendly country” against a Russian company are nearly nonexistent.