Enforcement of Russian judgments poses threat to Western companies also in the West

According to recent mass media reports, the shares of Google International LLC in its French subsidiary Google France have been frozen in France as an interim measure in support of an application brought by the Russian insolvency administrator of Google’s Russian subsidiary declared insolvent in Russia.

The insolvency administrator is seeking to enforce a judgment by the Russian commercial court in France ordering the recovery from Google International of dividends worth approximately €110 million paid by Google Russia in 2021 when, according to the Russian court, Google Russia already had signs of insolvency. According to the Russian judgment, the transfer of the dividends was invalid since it was made “for the purpose of harming the interests of creditors in the context of the debtor’s insolvency”.

A significant part of the creditors’ claims registered within Google Russia’s insolvency proceedings are claims raised by Russian persons against Google based on the “Lugovoy Law” (providing for exclusive jurisdiction of Russian courts in sanctions-related disputes), fines from Russian authorities for non-compliance with requests to restrict access to information prohibited in Russia and court penalties for non-compliance with Russian court orders to restore accounts of certain Russian sanctioned persons.

It is also reported that the same Russian judgment was already recognised in South Africa prior to this.

Although final enforcement of the Russian judgment in France is far from guaranteed, the above development demonstrates that the assets of Western companies facing Russian judgments may be at risk not only in Russia-friendly jurisdictions but also in Western countries themselves.