The Supreme Court issued Ruling No. 304-ES24-24514 dated 28 March 2025 in case No. A67-3423/2024. The Court indicated that the conclusion made by the arbitration court that the arbitral tribunal’s decision violates public policy must be adequately motivated.

In the said case, the Supreme Court did not agree with the conclusions of the lower courts that the penalty of 0.1% pf the contract price per day collected by the arbitration tribunal was excessive. According to the Supreme Court of the Russian Federation, this conclusion was made without sufficient justification.

Ekaterina Schmitt, TV&P lawyer, commented to the “Advokatskaya Gazeta” (Russian Advocacy Newspaper) that, indeed, the arbitration court has the right not to issue writs of execution for the decisions of arbitral tribunals. Nevertheless, this is true for the cases when the penalty applied by the arbitration court is excessive. And the arbitration court has the right to assess such excessiveness independently.

Nevertheless, judicial practice has long recognized a penalty of 0.1% of the contract price as a penalty which is within market conditions. Therefore, the Supreme Court rightly drew attention to the inadmissibility of an arbitrary refusal to issue a writ of execution, recalling that the latter can only be triggered by an unconditional disproportionality. And it should definitely contradict the foundations of legal regulation.

“Advokatskaya Gazeta” (Russian Advocacy Newspaper) is the official body of the Russian Federal Bar Association (published since 2007). The Newspaper’s publications are devoted to the most important legal topics, case law, as well as legal practice and issues of advocacy.

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