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Russia appears to be mounting a global legal offensive in international courts in response to Western sanctions levied over its Feb. 2022 invasion of Ukraine.
A recent prominent case involves claims from multiple Russian TV channels against Google over the blocking of their YouTube accounts. The total fines, handed down by Russian courts, have now reportedly soared to 2 undecillion rubles (a two followed by 36 zeros), equivalent to $2.5 decillion (a number with 33 zeros). The fine dwarfs the value of the entire global economy — the International Monetary Fund recently estimated the world's total GDP at $110 trillion.
To enforce these penalties, Russia has introduced new legislation and is pursuing supportive rulings in third-country courts, including in South Africa.
Initially, Russia’s case against Google centered on the blocking of three YouTube accounts, which Google believed were controlled by sanctioned supporters of Vladimir Putin. YouTube initially expected the disputes to be resolved in courts in California and the UK.
Nearly two years later, the case now includes claims from 17 channels blocked by the platform — including those of Kremlin propaganda mainstay Channel One, Ministry of Defense mouthpiece Zvezda, and the personal channel of RT editor-in-chief Margarita Simonyan. The Russian media companies behind the blocked YouTube channels have taken their case to South African courts in a new effort to enforce a Moscow judge’s ruling that Google, YouTube’s parent company, must pay the fines.
Western companies like Volkswagen AG, Barclays Plc, Linde, and Euroclear Holding are also fighting legal battles against Russia, but Google’s case is the most “sprawling example so far,” as described in a recent Bloomberg report. “The case is a sign of how multinational companies are finding themselves unexpectedly exposed to the Russian legal system, and in turn wider political disputes,” the publication added.
Google’s fines in Russia are doubling each week, meaning the initial fine of around a thousand dollars could soon exceed the $2.1 trillion-dollar market value of Alphabet, Google’s parent company. However, even if it were inclined to pay up, Google would be unable to transfer any funds to Russian companies, as doing so would violate U.S. sanctions.
Will American companies have to pay these fines?
Could Google be compelled to pay the fines? Likely not, says Oleksandra Iordanova, an international lawyer who discussed the case with The Insider. However, failing to comply with the South African court’s ruling could have other potential consequences, such as asset seizures — although these would be limited to Google assets located in South Africa.
“As a rule, a U.S. company is not automatically obligated to comply with a foreign judgment — such as one from South Africa — unless a U.S. court formally recognizes it. U.S. courts are generally reluctant to enforce foreign judgments that conflict with U.S. laws or policy, including sanctions. Therefore, a South African court’s decision would not require the U.S. company to pay the fine unless the judgment is recognized by a U.S. court, which would evaluate its compatibility with U.S. law and policy.
Asset seizure in South Africa could be possible if the U.S. company has assets or a subsidiary there, though this would not extend to assets located abroad, such as those in the United States.”
Iordanova added that for a South African or Russian court decision to be legally binding on a U.S. company, the holder of the decision would need to initiate a recognition action in a U.S. state court (or, in some cases, a federal court), which would then recognize the foreign judgment.
In evaluating foreign judgments, U.S. courts generally follow the Uniform Foreign-Country Money Judgments Recognition Act (or any other relevant law, depending on the jurisdiction). In order for a foreign judgment to be accepted by the U.S. court, it must adhere to certain standards:
- Due process: The foreign court must have provided a fair process consistent with U.S. due process standards.
- Jurisdiction: The foreign court must have had proper jurisdiction over the case and defendant.
- No conflict with public policy: The judgment must not violate fundamental U.S. public policy, such as infringing on constitutional rights.
- Absence of fraud: The judgment must not have been obtained through fraudulent means.
In practice, U.S. courts may be hesitant to enforce Russian judgments if they find them inconsistent with American legal standards or question the independence of Russia's judiciary, Iordanova explained.
Alternatively, rather than seeking direct enforcement, the Russian party could file a new lawsuit in the U.S. or another country where the U.S. company has assets, using the Russian judgment as evidence of a legal claim.