Yegiazaryan, aka Egiazaryan v Smagin, et al., 599 U.S. (2023) 

Case Title, Court, Date, and Parties 

The case of Yegiazaryan, aka Egiazaryan v Smagin, et al., 599 U.S. ___ (2023), was issued by the Supreme Court of the United States on 22 June 2023, after the oral arguments on 25 April 20231. 

The majority opinion was written by Justice Sotomayor, joined by Chief Justice Roberts and Justices Kagan, Kavanaugh, Barrett, and Jackson. Nevertheless, Justice Alito filed a dissenting opinion, joined by Justices Thomas and Gorsuch in part.2 

The petitioner, Ashot Yegiazaryan, was a Russian businessman who relocated to California in 2010 during the criminal proceedings in Russia. He was accused of misappropriating/moving substantial investment funds from a Moscow real estate project. In London arbitration proceedings, he was ordered to pay damages but resisted enforcement once in the United States.3 

The respondent, Vitaly Smagin, also a Russian national, obtained an $84 million arbitral award against Yegiazaryan in 2014 under the New York Convention. For further enforcement in the United States, Smagin initiated proceedings in the Central District of California, where Yegiazaryan had relocated and held assets. The dispute reached the Supreme Court when lower courts disagreed over whether Smagin’s inability to collect amounted to a “domestic injury” under the Racketeer Influenced and Corrupt Organizations Act (RICO).4 

Facts of the Case 

The dispute began in the mid-2000s, when Smagin invested in a Moscow real estate venture with Yegiazaryan. Smagin alleged that Yegiazaryan misappropriated his investment, diverting millions of dollars for personal use5. In 2010, Russian authorities had indicted Yegiazaryan for fraud. He left Russia and settled in California, beyond the reach of Russian courts. 

In 2014, Smagin secured an arbitral award in London worth $84 million. That same year, he sought to enforce the award in the United States under the New York Convention. The Central District of California confirmed the award and issued orders to freeze Yegiazaryan’s local assets. 

Yegiazaryan allegedly devised an elaborate scheme to place his assets beyond Smagin’s reach. Reports indicated that he funnelled funds through offshore trusts and accounts, including CMB Monaco, and engaged in witness intimidation and obstruction tactics6. Simultaneously, Yegiazaryan secured and concealed a separate $198 million arbitral award (Kerimov Award) in an unrelated dispute. 

Smagin, unable to collect despite favourable judgments, filed a civil lawsuit under the Racketeer Influenced and Corrupt Organizations Act (RICO). He alleged that Yegiazaryan’s ongoing concealment, wire fraud, and obstruction constituted a pattern of racketeering directed at undermining enforcement of a California judgment. The District Court dismissed the action, holding that Smagin had not alleged a “domestic injury” under RICO because he resided abroad. On appeal, the Ninth Circuit reversed, finding the injury sufficiently tied to the United States. The Supreme Court then took up the case to resolve the proper interpretation of RICO’s “domestic injury” requirement7. 

Issues Raised 

The Supreme Court was asked to resolve how the “domestic injury” requirement under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1964(c)8, should be applied in cross-border disputes.9

The key issues were: 

1. Whether Smagin’s inability to enforce a California judgment confirming his London arbitral award constituted a “domestic injury” for the purposes of civil RICO. 2. Whether the location of an injury to intangible property should be determined by rigid common law rules (plaintiff’s residence) or by a contextual analysis. 
2. To what extent the presumption against extraterritoriality limits RICO’s application in cases involving foreign plaintiffs and international arbitration enforcement. 
3. Arguments of the Parties 
4. I. Petitioner (Yegiazaryan) 

Yegiazaryan asserted that Smagin’s claim should fail because he could not demonstrate a “domestic injury.”10 Relying on common law principles and the Restatement (First) of Conflict of Laws, the petitioner argued that injuries to intangible property are located at the plaintiff’s residence. Since Smagin lived in Russia, his injury necessarily occurred abroad. 

The petitioner emphasised that Congress, through RJR Nabisco v European Community (2016)11, required private RICO plaintiffs to show a domestic injury in order to prevent the statute from applying extraterritorially. Adopting Smagin’s theory, Yegiazaryan argued, would undermine this safeguard and invite a flood of foreign plaintiffs into US courts12. 

Moreover, the petitioner raised concerns of international proceedings, as arbitration awards usually involve multinational parties and proceedings. Permitting foreign award-holders to reframe enforcement disputes as RICO claims would risk friction with other legal systems and overextend US law into disputes better resolved under arbitration and contract enforcement principles13. 

Finally, Yegiazaryan maintained that the alleged transfers through foreign bank accounts, offshore entities, and third-party arrangements were not sufficient enough to qualify as a domestic injury under RICO14. 

Respondent (Smagin) 

Smagin argued that the petitioner’s reliance on residence-based rules ignored the facts of the dispute. The harm he suffered was not in Russia but in California, where he had successfully obtained recognition of the London arbitral award. The conduct was aimed merely at obstructing enforcement of that California judgment, and thus the injury was rooted in the United States15. 

He further contended that RICO’s remedial purpose was to protect the authority of US courts from fraudulent interference16. Allowing defendants to obstruct American judgments with impunity simply because the judgment creditor resided abroad would render RICO’s protections hollow17. 

Smagin dismissed the petitioner’s concerns as overstated. A fact-specific domestic injury test, he argued, would confine RICO claims to cases where racketeering had clear US effects, while excluding disputes without genuine domestic connection18. 

Lastly, Smagin pointed out that adopting a rigid rule based on plaintiff residence would incentivise wrongdoers to target foreign award-holders with fraudulent schemes, knowing they would be barred from seeking RICO relief in US courts19. This would erode confidence in the US as a reliable jurisdiction for enforcing international arbitration awards. 

Judgment 

The Supreme Court affirmed the Ninth Circuit’s decision, holding that Smagin had sufficiently alleged a “domestic injury” under RICO20. Justice Sotomayor wrote for the majority and rejected a rigid rule that would locate all injuries to intangible property at the plaintiff’s residence21. Instead, the Court endorsed a contextual approach, focusing on where the harmful effects of the alleged misconduct were felt. 

Here, the injury arose in California because the misconduct was aimed at frustrating enforcement of a California judgment confirming the London arbitral award22. Smagin’s residence in Russia did not change the fact that the obstruction occurred and harmed the integrity of US judicial processes. 

The Court therefore remanded the case for further proceedings on the merits of Smagin’s RICO claim. Justice Alito, joined by Justices Thomas and Gorsuch in part, dissented, favouring a residence-based test for certainty and predictability23. 

Legal Reasoning 

The Court’s reasoning centred on the interpretation of the “domestic injury” requirement established in RJR Nabisco v. European Community (2016)24. That case held that private civil  RICO plaintiffs should demonstrate that their injury occurred within the United States, but it left open the precise test for determining where an injury is “located.”25 

I. Majority reasoning 

Justice Sotomayor rejected the petitioner’s argument that injuries to intangible property are automatically located at the plaintiff’s residence, a rule derived from the Restatement (First) of Conflict of Laws26. The Court found this approach too rigid for modern transnational disputes. Instead, it proposed a contextual, fact-driven inquiry, where courts should examine the circumstances of the alleged misconduct and determine where the effects actually materialised27. 

Applying this to the case, the majority concluded that Smagin’s inability to enforce his award was a domestic harm. The obstruction was aimed at a judgment issued by a US federal court in California, and the concealment of assets directly frustrated enforcement orders in that jurisdiction.28 The fact that Smagin resided in Russia was irrelevant compared with the fact that the misconduct targeted and undermined US judicial authority.29 

The majority also addressed concerns about the principle that courts should avoid unnecessarily conflicting with foreign legal systems30. It reasoned that a contextual test minimises friction, because RICO claims will only proceed where the misconduct has a clear domestic nexus, rather than opening US courts to all foreign plaintiffs indiscriminately31. 

II. Dissenting view 

Justice Alito argued that the majority’s open-ended test sacrifices predictability for flexibility32. In his view, locating intangible injuries at the plaintiff’s residence is a simpler and more administrable rule, reducing the risk of forum-shopping and inconsistent judgments.33 He cautioned that the majority’s approach could invite foreign litigants to repackage enforcement disputes as RICO claims, expanding the statute beyond Congress’s intended scope34. 

III. Doctrinal significance 

The decision clarifies that domestic injury is not determined by legal fictions but by practical effects. It strengthens the role of US courts in safeguarding their own judgments against fraudulent interference, even when the parties are foreign nationals. At the same time, it highlights a line between certainty (the dissent) and flexibility (the majority), leaving lower courts room for future development35. 

IV. Comparative Observations 

The Court’s decision contrasts sharply with the approach taken in the United Kingdom under the Arbitration Act 199636. Sections 68 and 103 of the Act allow refusal of enforcement only for “serious irregularity” or when enforcement would be “contrary to public policy.” 37 For example, English courts have set aside awards tainted by fraud or corruption, but they avoid broader inquiries into enforcement obstacles.38 

Furthermore, UK law does not provide a statutory equivalent to RICO.39 There is no test by which a creditor could file a civil “misconduct” suit to address obstruction of enforcement.40 On the other hand, creditors rely on freezing orders, contempt proceedings, or parallel criminal investigations (e.g., under the Fraud Act 2006 or Proceeds of Crime Act 2002)41. This reflects that the UK prioritises finality and autonomy of arbitration while reserving intervention for exceptional circumstances42. 

Internationally, institutions like the ICC or ICSID tribunals issue awards but rely on national courts for enforcement. The US decision in Smagin43 demonstrates how national courts may step in to protect the efficacy of awards against asset-concealment schemes. While this strengthens enforcement in the US, it may also raise concerns abroad that American courts are extending domestic statutes into disputes with strong international dimensions. 

Overall, the case illustrates that the US prioritises remedies to protect domestic judicial authority, while the UK emphasises restraint to preserve arbitration’s independence.44 Both approaches aim to maintain credibility in international commerce but through very different institutional tools. 

Conclusion 

Yegiazaryan v. Smagin provides important clarification on how US courts apply RICO’s “domestic injury” requirement45. The Supreme Court adopted a contextual, fact-based test, holding that an injury is domestic where racketeering obstructs enforcement of a US judgment, even if the plaintiff resides abroad. This strengthens the enforceability of arbitral awards in the United States and reinforces judicial authority. Compared with the UK’s more cautious reliance on public policy exceptions, the ruling highlights the distinctive role US statutes play in transnational enforcement disputes46. 

Reference(S):

1 Yegiazaryan v Smagin 599 US ___ (2023) (No 22-381), Supreme Court of the United States, judgment delivered 22 June 2023 https://supreme.justia.com/cases/federal/us/599/22-381/ accessed 23 August 2025.

2 United States Supreme Court, Docket No 22-381, Yegiazaryan v Smagin https://www.supremecourt.gov/docket/docketfiles/html/public/22-381.html accessed 23 August 2025.

3 Miller Chevalier, ‘A Broader Path to Collect Foreign Arbitral Awards in the United States after US Supreme Court’s Yegiazaryan v. Smagin Decision’ (16 August 2023). https://www.millerchevalier.com/publication/broader-path-collect-foreign-arbitral-awards-united-states-after-us-supr eme-courts accessed 23 August 2025. 

4 Here “domestic injury” means that, for a private civil RICO claim to succeed, the harm must have occurred inside the United States rather than abroad. 

5Ibid 1.

6 Law Cornell, ‘Yegiazaryan v. Smagin’ (Legal Information Institute) https://www.law.cornell.edu/supct/cert/22-381 accessed 23 August 2025. 

7Ibid 6. 

8 Corrupt Organizations Act 1970, 18 USC §§1961–1968.

9Ibid 1. 

10 Ibid 2. 

11 RJR Nabisco, Inc. v European Community 579 US ___, 334–46 (2016). 

12 Ibid 1. 

13 Miller Chevalier, ‘A Broader Path to Collect Foreign Arbitral Awards in the United States after US Supreme Court’s Yegiazaryan v. Smagin Decision’ (16 August 2023) https://www.millerchevalier.com/publication/broader-path-collect-foreign-arbitral-awards-united-states-after-us-supr eme-courts accessed 23 August 2025.

14 Ibid 13. 

15 Yegiazaryan v Smagin 599 US ___ (2023) paras 7-14, 37 [supreme.justia.com/cases/federal/us/599/22-381/].

16 Ibid 13. 

17 Thomson Mader Dudley, Civil RICO Questions Linger: The Domestic Injury Requirement (Gibson Dunn 2017) https://www.gibsondunn.com/wp-content/uploads/documents/publications/Thomson-Mader-Dudley-Civil-RICO-que stions-linger-The-DailyJournal-1-4-2017.pdf accessed 23 August 2025. 

18 Baker McKenzie, Supreme Court Expands Understanding of RICO “Domestic Injury” Requirement in Yegiazaryan v. Smagin (3 March 2024)  https://www.bakerlaw.com/insights/supreme-court-expands-understanding-of-rico-domestic-injury-requirement-in-y egiazaryan-v-smagin/ accessed 23 August 2025. 

19 Joseph H Hunt, Analyzing the Domesticity of Judgments in the Civil RICO Context (2021) 92 University of Cincinnati Law Review 875 https://scholarship.law.uc.edu/cgi/viewcontent.cgi?article=1521&context=uclr accessed 23 August 2025.

20 Ibid 8. 

21 Ibid 1. 

22 Ibid 2. 

23 Ibid 1. 

24 Ibid 11. 

25 Ibid 11.

26 Ibid 1. 

27 Ibid 1. 

28 SSRN, Alexander Sirota, ‘Foreign Holders of Arbitral Awards Can Claim Under RICO’ (7 July 2024) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4958969 accessed 23 August 2025.

29 Ibid 1. 

30 Brill, U.S. Supreme Court Precedents on Arbitration: Shaping the Future of International Dispute Resolution (2025) https://brill.com/edcollchap/book/9789004715820/BP000035.pdf accessed 23 August 2025.

31 Legal Information Institute, Yegiazaryan v Smagin 599 US ___ (2023) (LII Supreme Court Bulletin) https://www.law.cornell.edu/supct/cert/22-381 accessed 23 August 2025. 

32 Ibid 1. 

33 Ibid 1.

34 Ibid 1. 

35 Foley Hoag LLP, ‘SCOTUS Resolves Circuit Split on How to Assess Domestic Injury Under RICO’ (18 July 2023)  https://foleyhoag.com/news-and-insights/publications/alerts-and-updates/2023/july/scotus-resolves-circuit-split-on-h ow-to-assess-domestic-injury-under-rico/ accessed 23 August 2025. 

36 Arbitration Act 1996. 

37 Ibid 36. 

38 Cambridge University Press, Yegiazaryan v. Smagin (U.S. Sup. Ct.) (2024) 63(2) International Legal Materials 301 https://www.cambridge.org/core/journals/international-legal-materials/article/yegiazaryan-v-smagin-us-sup-ct/49299 2BE9BDFDFE0AB83C789E3A6F9BD accessed 23 August 2025. 

39 Aceris Law, ‘Arbitration in the United Kingdom: The 1996 Arbitration Act’ (2024) https://www.acerislaw.com/arbitration-in-the-united-kingdom-the-1996-arbitration-act/ accessed 23 August 2025.

40 DLA Piper, ‘Overview of Arbitral Appeals on Questions of Law under Section 69 of the UK Arbitration Act 1996’ (2024). https://www.dlapiper.com/en/insights/publications/2024/04/overview-of-arbitral-appeals-on-questions-of-law-under section-69 accessed 21 August 2025. 

41 Justice.gov.uk, Part 62 – Arbitration Claims (Civil Procedure Rules, 2024) https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part62 accessed 23 August 2025.

42 Mayer Brown, ‘English Court Refuses to Enforce Arbitral Award on Public Policy Grounds Linked to English Consumer Protection’ (2023)  https://www.mayerbrown.com/en/insights/publications/2023/08/english-court-refuses-to-enforce-arbitral-award-on-p ublic-policy-grounds-linked-to-english-consumer-protection accessed 23 August 2025. 

43 Ibid 1. 

44 Herbert Smith Freehills LLP, ‘Staying Enforcement of Awards: the English Commercial Court Offers Practical Guidance for Both Sides’ (2015)  https://www.hsfkramer.com/notes/arbitration/2015-03/staying-enforcement-of-awards-the-english-commercial-court -offers-practical-guidance-for-both-sides accessed 23 August 2025. 

45 Ibid 1. 

46 Ibid 44.