The Bankruptcy of Foreign Companies

Abstract

Abstract Until recently, in Russian jurisprudence prevailed a conservative approach. According to it, Russian courts did not consider themselves an appropriate forum for the bankruptcy of foreign companies. The situation started to change in April 2022, when the first judicial act opening bankruptcy proceedings in respect of a foreign company was rendered. This case reached the Supreme Court of the Russian Federation and paved the way for subsequent similar cases. As a result, in February 2024 the Supreme Court of the Russian Federation issued a landmark ruling which set an important precedent regarding several fundamental questions of cross-border insolvency in Russia. This article tracks the development of case law and the shifts in the focus of judicial reasoning towards stronger and more effective protection of the creditors’ interests. It gives an overview of the applicable rules in the absence of special regulation of cross-border insolvency. The article identifies the criteria developed by courts and common features of foreign entities currently most affected by the changes in case law. These changes demonstrate how jurisprudence strategically adjusts to the challenges of our time and customizes international trends.