Recognition and Enforcement of Judgements and Awards in Russia and Ukraine: Crimean Consequences

The Crimea’s annexation stands as one of the most significant geopolitical shocks of the 21st century in Europe, bringing about substantial repercussions across various domains including trade, security, and international relations. Particularly noteworthy is the profound impact this event has had on Ukraine-Russia relations and judicial implications. This paper investigates the politicization of domestic courts in both countries in post-annexation period, through the lens of the recognition of foreign judgments. Central to our analysis are two prevailing theories in international law that offer explanations for the recognition of foreign judgments and awards. The first is the doctrine of comitas gentium, which posits that the recognition of a foreign judicial act is fundamentally an act of comity extended to another sovereign state. This theory emphasizes the political identity of the sovereign in question, rather than the intrinsic merits of the case. According to this perspective, a state may choose not to recognize foreign acts if it does not wish to foster mutual relations with the sovereign concerned, potentially overlooking the rights of individuals seeking recognition. In contrast, the second theory we examine is the vested rights doctrine. Here, private international law is seen as a mechanism to ensure the recognition of individual rights that have been acquired and ‘vested’ in a foreign jurisdiction. This theory argues that states are obligated to acknowledge foreign acts as they represent commitments between parties, and this obligation holds irrespective of the state’s political relationship with the sovereign under whose rule the right was established. Utilizing comprehensive data on decisions related to foreign judgments and arbitral awards in commercial courts in Russia and Ukraine from 2009 to 2019, we assess the impact of the annexation on the recognition and enforcement of Ukrainian judgments in Russia and vice versa. We employ a difference-in-difference design to analyze the rates of recognition and enforcement of judgments and awards from Ukraine in Russian courts (and vice versa) before and after the Crimea’s annexation. These rates are then compared with a control group comprising judgments from countries whose relations with Russia or Ukraine remained unaffected by the Crimea’s annexation. The underlying assumption for identifying trends is that, if the annexation had not occurred, the rate of recognition of judgments and awards from Ukraine in Russia, and vice versa, would have followed a similar trajectory to that of the unaffected countries. Our findings underscore the prevailing influence of the international comity doctrine. Post-2014, irrespective of the dispute's subject matter, there was a notable decrease in the recognition of foreign judgments by Russian domestic courts — showing a 25% reduction compared to the pre-2014 era. Similarly, Ukrainian courts responded by reducing the recognition of Russian judgments by 26%. This shift reflects the profound impact of the crisis on the relationship between the countries, which directly translated to jurisprudence at home. This analysis contributes to a deeper understanding of the specific case of Crimea’s annexation and provides broader insights into the dynamics of international law and its intersection with global political developments in Europe.