Ruling for OAO Samaraneftegaz Vacating $186 Million Turnover Order
February 3, 2015
February 3, 2015
Cleary Gottlieb secured from the Second Circuit a February 3 ruling vacating a district court order directing OAO Samaraneftegaz, a Russian oil company, to turn over assets to satisfy a $186 million judgment entered in favor of Yukos Capital S.a.r.l. The turnover order was issued pursuant to New York’s C.P.L.R. Section 5225, which deals with post-judgment remedies.
Samaraneftegaz challenged the district court’s failure to conduct a comity analysis, notwithstanding evidence that compliance with the turnover order would require violation of Russian law. In the absence of any analysis in the order, the Second Circuit vacated it and directed the district court to “thorough[ly]” explain its conclusion regarding the need for a comity analysis and to conduct one if warranted. The court of appeals also directed the district court to determine whether Yukos Capital complied with the service requirements of Section 5225. Finally, the Second Circuit vacated orders compelling post-judgment discovery and awarding attorneys’ fees, directing the district court to reconsider them in light of comity considerations.
The decision follows the Second Circuit’s recent decision in Gucci Am., Inc. v. Weixing Li, 768 F.3d 122 (2014), which underscores the key role comity plays in mediating the conflicting demands of U.S. and foreign law upon litigants.