A Russian court has declined to recognize an ICC ruling in the Lavna Port case, denying claims against foreign contractors amid sanctions.
The Arbitration Court of Russia's Northwestern District has refused to recognize an International Chamber of Commerce (ICC) arbitration ruling in the Lavna Port case, according to reports from Saint Petersburg's PortNews.
The ICC tribunal had denied Lavna Commercial Sea Port LLC's recovery of EUR 6.1 million (US$ 7.1 million) from Latvia's LNK Industries and EUR 2.6 million from Germany's Thyssenkrupp Industrial Solutions. The First Deputy Transport Prosecutor of the Northwestern Transport Prosecutor's Office objected to the recognition of the award in Russia, and the Arbitration Court of the Murmansk Region upheld this objection.
LNK Industries subsequently filed a cassation appeal seeking to overturn the ruling, but the Northwestern District court dismissed the appeal and upheld the lower court's decision. The courts determined that enforcing the ICC award would be contrary to Russian public policy.
In 2018, Lavna Port, the State Transport Leasing Company, and the two foreign contractors signed an agreement for equipment supply and installation at the Murmansk coal terminal, which was funded with RUB 27.7 billion (US$ 340,000) from the federal budget. Advance payments of EUR 8.79 million were made, with LNK receiving EUR 6.14 million and Thyssenkrupp EUR 2.64 million.
Following EU sanctions, the foreign contractors refused to fulfill their installation obligations, prompting Lavna Port to demand repayment. The ICC tribunal denied the claim, and now Russian courts have also refused to recognize the award.
