On compensation of losses incurred as a result of court judgements or arbitration awards

Abstract

As case law has proven, a court judgement or an arbitration award, which resulted the losses of the party, serve as a basis for claiming these losses as damages from a breaching party. In these cases, we do not deal with the issues of recognition of foreign judgements or arbitration awards, but rather on recognition of the mere fact of the issuance of a decision against the party which was suffered the damages and wants that the breaching party compensates them. The legal ground for this recognition is the commonly known principle of res judicata. Compensation of losses becomes more complicated in situation when a foreign element is involved in the relation. Firstly, it may happen that the applicable foreign law does not allow adjudication of damages in these situations or make it conditional by various requirements. Secondly, recognition of amounts paid under foreign judgements or arbitration awards as losses depends on the degree of trust of the local courts to these foreign judgements and awards. In case a claim on compensation of losses which claimant incurred under foreign judgements and arbitration awards is filed in the court, the court faces with the question as to the starting point of a limitation period. The Russian case law evidences that alimitation period for claiming damages starts from themoment of issuance of the relevant court judgement or arbitration award and their came into effect, but not from the moment of breaching by the relevant party of its initial obligation, which was the basis for filing a claim in foreign court or arbitration institution.