Enforcing a Foreign Arbitration Award against a Foreign Party under RICO
Publications
May 2023
On April 25, 2023, the U.S. Supreme Court heard argument on whether a foreign plaintiff can state a civil claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) against a foreign defendant based on actions related to the enforcement of a foreign arbitration award. The two consolidated cases are Yegiazaryan v. Smagin, No. 22-381, and CMB Monaco v. Smagin, No. 22-383.
The case stems from interesting facts. Vitaly Smagin, a Russian citizen, filed suit against Ashot Yegiazaryan, another Russian who fled to California more than a decade ago, among other defendants. The lawsuit alleged that Ashot and others defrauded Smagin in Russia. In 2010, Russian authorities criminally indicted Ashot and his brother Artem Yegiazaryan for the alleged fraud. Smagin also commenced a civil arbitration proceeding against Ashot in London, eventually securing a US $84 million arbitration award against Ashot.
Smagin sought to enforce his award in California but, according to him, Ashot schemed to hide assets through shell companies and move funds around to avoid paying the judgment. In 2020, the US District Court ordered Ashot and others acting on his behalf to “immediately cease all actions . . . that would prevent, hinder, or delay [Smagin’s] ability to collect”; the court also issued an order prohibiting Ashot from further modifying a trust or the administration of a bank account without court approval. The court later found Ashot in contempt for violating these orders.
Against this backdrop, Smagin filed the instant case, bringing two claims under RICO, on the basis that Ashot and the other defendants harmed the California judgment in Smagin’s favor. To have statutory standing, a civil RICO plaintiff must show that (1) his alleged harm qualifies as injury to his business or property and (2) his harm was by reason of the RICO violation (requiring proximate causation). See Smagin v. Yegiazaryan, 37 F.4th 562, 566 (9th Cir. 2022), cert. granted, 143 S. Ct. 645 (2023), and cert. granted sub nom. CMB Monaco v. Smagin, 143 S. Ct. 646 (2023) (citations omitted). Further, under RJR Nabisco, Inc. v. Eur. Cmty., 579 U.S. 325 (2016), the plaintiff must allege and prove a domestic injury to his business or property. See id. at 566–67.
In considering the question of standing, the Ninth Circuit Court of Appeals determined that, “for purposes of standing under RICO, the California Judgment exist[ed] as property in California.” Id. Thus, “the alleged harm to [Smagin’s] rights under the California Judgment constitute[d] a domestic injury.” Id. In coming to this conclusion, the Court of Appeal recognized it was deepening a circuit split, with the Second, Third, and Ninth Circuits on one side, and the Seventh Circuit on the other. See id. at 568.
Should the U.S. Supreme Court agree with the Second, Third, and Ninth Circuits’ approach, foreign parties seeking to enforce foreign arbitration awards in the US against reluctant parties sheltering their assets may have powerful new leverage -- the RICO statute allows recovery of treble damages, costs, and attorneys’ fees. A decision is expected later this year.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
The case stems from interesting facts. Vitaly Smagin, a Russian citizen, filed suit against Ashot Yegiazaryan, another Russian who fled to California more than a decade ago, among other defendants. The lawsuit alleged that Ashot and others defrauded Smagin in Russia. In 2010, Russian authorities criminally indicted Ashot and his brother Artem Yegiazaryan for the alleged fraud. Smagin also commenced a civil arbitration proceeding against Ashot in London, eventually securing a US $84 million arbitration award against Ashot.
Smagin sought to enforce his award in California but, according to him, Ashot schemed to hide assets through shell companies and move funds around to avoid paying the judgment. In 2020, the US District Court ordered Ashot and others acting on his behalf to “immediately cease all actions . . . that would prevent, hinder, or delay [Smagin’s] ability to collect”; the court also issued an order prohibiting Ashot from further modifying a trust or the administration of a bank account without court approval. The court later found Ashot in contempt for violating these orders.
Against this backdrop, Smagin filed the instant case, bringing two claims under RICO, on the basis that Ashot and the other defendants harmed the California judgment in Smagin’s favor. To have statutory standing, a civil RICO plaintiff must show that (1) his alleged harm qualifies as injury to his business or property and (2) his harm was by reason of the RICO violation (requiring proximate causation). See Smagin v. Yegiazaryan, 37 F.4th 562, 566 (9th Cir. 2022), cert. granted, 143 S. Ct. 645 (2023), and cert. granted sub nom. CMB Monaco v. Smagin, 143 S. Ct. 646 (2023) (citations omitted). Further, under RJR Nabisco, Inc. v. Eur. Cmty., 579 U.S. 325 (2016), the plaintiff must allege and prove a domestic injury to his business or property. See id. at 566–67.
In considering the question of standing, the Ninth Circuit Court of Appeals determined that, “for purposes of standing under RICO, the California Judgment exist[ed] as property in California.” Id. Thus, “the alleged harm to [Smagin’s] rights under the California Judgment constitute[d] a domestic injury.” Id. In coming to this conclusion, the Court of Appeal recognized it was deepening a circuit split, with the Second, Third, and Ninth Circuits on one side, and the Seventh Circuit on the other. See id. at 568.
Should the U.S. Supreme Court agree with the Second, Third, and Ninth Circuits’ approach, foreign parties seeking to enforce foreign arbitration awards in the US against reluctant parties sheltering their assets may have powerful new leverage -- the RICO statute allows recovery of treble damages, costs, and attorneys’ fees. A decision is expected later this year.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
Related Articles
Related Capabilities
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
Publications
May 2023
On April 25, 2023, the U.S. Supreme Court heard argument on whether a foreign plaintiff can state a civil claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) against a foreign defendant based on actions related to the enforcement of a foreign arbitration award. The two consolidated cases are Yegiazaryan v. Smagin, No. 22-381, and CMB Monaco v. Smagin, No. 22-383.
The case stems from interesting facts. Vitaly Smagin, a Russian citizen, filed suit against Ashot Yegiazaryan, another Russian who fled to California more than a decade ago, among other defendants. The lawsuit alleged that Ashot and others defrauded Smagin in Russia. In 2010, Russian authorities criminally indicted Ashot and his brother Artem Yegiazaryan for the alleged fraud. Smagin also commenced a civil arbitration proceeding against Ashot in London, eventually securing a US $84 million arbitration award against Ashot.
Smagin sought to enforce his award in California but, according to him, Ashot schemed to hide assets through shell companies and move funds around to avoid paying the judgment. In 2020, the US District Court ordered Ashot and others acting on his behalf to “immediately cease all actions . . . that would prevent, hinder, or delay [Smagin’s] ability to collect”; the court also issued an order prohibiting Ashot from further modifying a trust or the administration of a bank account without court approval. The court later found Ashot in contempt for violating these orders.
Against this backdrop, Smagin filed the instant case, bringing two claims under RICO, on the basis that Ashot and the other defendants harmed the California judgment in Smagin’s favor. To have statutory standing, a civil RICO plaintiff must show that (1) his alleged harm qualifies as injury to his business or property and (2) his harm was by reason of the RICO violation (requiring proximate causation). See Smagin v. Yegiazaryan, 37 F.4th 562, 566 (9th Cir. 2022), cert. granted, 143 S. Ct. 645 (2023), and cert. granted sub nom. CMB Monaco v. Smagin, 143 S. Ct. 646 (2023) (citations omitted). Further, under RJR Nabisco, Inc. v. Eur. Cmty., 579 U.S. 325 (2016), the plaintiff must allege and prove a domestic injury to his business or property. See id. at 566–67.
In considering the question of standing, the Ninth Circuit Court of Appeals determined that, “for purposes of standing under RICO, the California Judgment exist[ed] as property in California.” Id. Thus, “the alleged harm to [Smagin’s] rights under the California Judgment constitute[d] a domestic injury.” Id. In coming to this conclusion, the Court of Appeal recognized it was deepening a circuit split, with the Second, Third, and Ninth Circuits on one side, and the Seventh Circuit on the other. See id. at 568.
Should the U.S. Supreme Court agree with the Second, Third, and Ninth Circuits’ approach, foreign parties seeking to enforce foreign arbitration awards in the US against reluctant parties sheltering their assets may have powerful new leverage -- the RICO statute allows recovery of treble damages, costs, and attorneys’ fees. A decision is expected later this year.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
The case stems from interesting facts. Vitaly Smagin, a Russian citizen, filed suit against Ashot Yegiazaryan, another Russian who fled to California more than a decade ago, among other defendants. The lawsuit alleged that Ashot and others defrauded Smagin in Russia. In 2010, Russian authorities criminally indicted Ashot and his brother Artem Yegiazaryan for the alleged fraud. Smagin also commenced a civil arbitration proceeding against Ashot in London, eventually securing a US $84 million arbitration award against Ashot.
Smagin sought to enforce his award in California but, according to him, Ashot schemed to hide assets through shell companies and move funds around to avoid paying the judgment. In 2020, the US District Court ordered Ashot and others acting on his behalf to “immediately cease all actions . . . that would prevent, hinder, or delay [Smagin’s] ability to collect”; the court also issued an order prohibiting Ashot from further modifying a trust or the administration of a bank account without court approval. The court later found Ashot in contempt for violating these orders.
Against this backdrop, Smagin filed the instant case, bringing two claims under RICO, on the basis that Ashot and the other defendants harmed the California judgment in Smagin’s favor. To have statutory standing, a civil RICO plaintiff must show that (1) his alleged harm qualifies as injury to his business or property and (2) his harm was by reason of the RICO violation (requiring proximate causation). See Smagin v. Yegiazaryan, 37 F.4th 562, 566 (9th Cir. 2022), cert. granted, 143 S. Ct. 645 (2023), and cert. granted sub nom. CMB Monaco v. Smagin, 143 S. Ct. 646 (2023) (citations omitted). Further, under RJR Nabisco, Inc. v. Eur. Cmty., 579 U.S. 325 (2016), the plaintiff must allege and prove a domestic injury to his business or property. See id. at 566–67.
In considering the question of standing, the Ninth Circuit Court of Appeals determined that, “for purposes of standing under RICO, the California Judgment exist[ed] as property in California.” Id. Thus, “the alleged harm to [Smagin’s] rights under the California Judgment constitute[d] a domestic injury.” Id. In coming to this conclusion, the Court of Appeal recognized it was deepening a circuit split, with the Second, Third, and Ninth Circuits on one side, and the Seventh Circuit on the other. See id. at 568.
Should the U.S. Supreme Court agree with the Second, Third, and Ninth Circuits’ approach, foreign parties seeking to enforce foreign arbitration awards in the US against reluctant parties sheltering their assets may have powerful new leverage -- the RICO statute allows recovery of treble damages, costs, and attorneys’ fees. A decision is expected later this year.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
Related Articles
Related Capabilities
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
News and Insights
Podcasts
Partner Laurel Loomis Rimon Discusses Fintech Enforcement, Debanking, and Regulatory Risk on Fintech Layer Cake Podcast
Partner Laurel Loomis Rimon was featured on the Fintech Layer Cake podcast, where she discussed how fintech enforcement and prosecution actually work in practice, and what exposes fintechs and banks to regulatory risk.
July 15, 2026
Publications
Supreme Court Clarifies Scope of Private Rights of Action Under the Investment Company Act, Private Equity Law Report
Partners Charles Riely, Todd C. Toral, and Martin Glass authored a guest article for Private Equity Law Report examining the US Supreme Court's June 11, 2026, ruling on the scope of private rights of action under the Investment Company Act of 1940.
July 14, 2026
Publications
Emily Loeb Discusses Congressional Oversight Preparedness in Bloomberg Law
Partner Emily Loeb, co-chair of Jenner & Block's Congressional Investigations Practice, spoke with Bloomberg Law article about how companies can prepare for potential oversight exposure ahead of this fall's midterm elections.
July 7, 2026
Publications
In New York Law Journal, The True Lender Doctrine and the OppFi Decision
Partners Jeremy Creelan, Michael Ross, Megan Poetzel, and Laurel Loomis Rimon, and Associate Molly Oberstein-Allen authored an article for the New York Law Journal examining the "True Lender" doctrine in light of a May 2026 California decision that provides the most detailed judicial framework to date for evaluating bank-nonbank lending partnerships.
July 1, 2026
Event
Partner Michael Vernick to Speak at NACUA's 2026 Annual Conference
On July 1, Partner Michael Vernick will speak on a panel at the National Association of College and University Attorneys (NACUA) 2026 Annual Conference in Nashville.
July 1, 2026