Originally from the Journal of Enforcement of Arbitration Awards

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In mid-2023, the United States Supreme Court issued its decision in Yegiazaryan v. Smagin, No. 22-381 (U.S. June 22, 2023) in which it affirmed the power of United States courts to entertain a civil “RICO” lawsuit against judgment debtors that fraudulently sought to defeat enforcement of an international arbitral award.  Although it involved relatively unique facts, the decision provides potentially useful guidance to judgment creditors facing extraordinary efforts to defeat enforcement of an award.  

I. THE UNDERLYING COMMERCIAL DISPUTE BETWEEN SMAGIN AND YEGIAZARYAN—AND THE ENSUING LCIA ARBITRATION AWARD

In this case, Plaintiff-Respondent Vitaly Evanovich and Defendant-Petitioner Ashot Yegiazaryan had engaged in a joint real estate venture in Russia between 2003 and 2009. During that period, Yegiazaryan allegedly defrauded Smagin, and Yegiazaryan subsequently left Russia for Beverly Hills to avoid criminal fraud charges. Smagin, who remained in Russia, commenced arbitration against Yegiazaryan under the rules of the London Court of International Arbitration (“LCIA”), alleging that Yegiazaryan had violated their joint venture agreement.  

In 2014, an LCIA arbitral tribunal awarded Smagin damages in excess of $84 million. Smagin then brought a lawsuit in the United States District Court for the Central District of California (“C.D. Cal.”) to enforce the arbitral award under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). The Central District granted Smagin preliminary injunctive relief, freezing Yegiazaryan’s assets.