Venture Global Engineering LLC applied to the Arbitration court of Kaliningrad region (the state commercial court of first instance) for the enforcement of an ICC arbitral award pursuant to which the arbitral tribunal ordered Auto-Holding Group to pay a sum due under an agency agreement. Upon the petition of the respondent, the enforcement proceedings were stayed pending litigation about the validity of the agency agreement. The Court of Appeal confirmed the decision to stay the proceedings, taking the view that the conclusions of that court about the validity of the agency agreement were relevant to the enforcement proceedings.

This decision confirms the attitude of the Russian courts expressed in earlier cases: despite the arbitration agreement, the courts are competent to consider the validity of the agreement containing the arbitration clause, and a decision that the agreement is invalid will preclude the enforcement of an award. Such attitude is regrettable and provides the debtors with a window of opportunity to use litigation about the validity of the contract for delaying and derailing enforcement proceedings.