IP Law Daily, TRADEMARK—S.D.N.Y.: District court declined to apply collateral estoppel to Stolichnaya vodka trademarks dispute, (May 26, 2026)

By Carolin Dennis, B.Sc., LL.B., LL.M.

The district court’s refusal to apply collateral estoppel stems from findings that the defendants lacked full and fair opportunity to litigate in the first proceeding.

In a lawsuit regarding the U.S. trademarks for Stolichnaya vodka, the U.S. District Court for the Southern District of New York declined to apply collateral estoppel based on the Dutch or Russian judgments in its discretion in light of considerations of fairness in this action. The district court determined that even assuming the Dutch and Russian judgments should be recognized as a matter of comity and the four legal prerequisites for collateral estoppel are met, the application of collateral estoppel based on the judgments would be unfair in this case (Federal Treasury Enterprise Sojuzplodoimport v. Spirits International B.V., No. 1:14-cv-00712-SHS (S.D.N.Y. May 15, 2026)).

Background. Federal Treasury Enterprise Sojuzplodoimport (FTE), a state-chartered entity of the Russian Federation, and OAO “Moscow Distillery Cristall” (Cristall) (collectively, plaintiffs) contended the U.S. trademarks for the Stolichnaya vodka brand belonged to FTE as the Russian Federation's assignee. The defendants Spirits International B.V., SPI Spirits Limited, SPI Group SA, Stoli Group (USA) LLC, ZHS IP Americas Sarl, Yuri Shefler, and Alexey Oliynik (collectively, SPI) along with William Grant & Sons USA and William Grant & Sons, Inc. (together, William Grant) asserted that SPI owned the marks. According to the plaintiffs, the Foreign Economic Joint Stock Company Sojuzplodoimport (VAO) did not properly transform into VAO and therefore All Union Foreign Economic Association Sojuzplodoimport (VVO) retained the Stolichnaya marks, which were eventually transferred to the Russian Federation. The defendants contended that VVO properly transformed into VAO and therefore VAO became the owner of the Stolichnaya marks in 1992 and that, through a series of transfers, SPI eventually obtained the marks as the successor to VAO.

FTE and SPI have litigated the question of the legality of VVO’s transformation into VAO in several jurisdictions around the world, including in the Netherlands and in Russia itself. The Dutch courts determined that VAO was not the lawful successor to VVO under either Russian or Soviet law. The Russian courts also determined that VAO was not the legal successor to VVO.

The plaintiffs moved for partial summary judgment, requesting a declaration that VVO did not legally transform or privatize into VAO. The plaintiffs asks the district court to apply collateral estoppel based on the Dutch and Russian determinations that VAO was not the lawful successor to VVO and to declare that the invalidity of the transformation of VVO into VAO has been established for purposes of this litigation.

Collateral estoppel. Collateral estoppel bars relitigation of an issue that has already been fully and fairly litigated in a prior proceeding. However, even where all four of the legal prongs for collateral estoppel are established, the court must still assure itself that it is fair to apply the doctrine.

Dutch proceedings. SPI argued that the district court must refuse to recognize the Dutch judgments because American-style pre-trial discovery and live witness testimony are generally unavailable in Dutch litigation, which SPI states resulted in a materially incomplete record in the Dutch proceedings. The district court noted that this is a case in which the procedural differences between the Dutch courts and the district court are significant and could readily produce a different result such that application of offensive collateral estoppel against defendants (who did not choose the Dutch forum) based on the Dutch judgments would be unfair.

Unlike in the Netherlands, the years-long pretrial discovery proceeding in this litigation has been extensive. According to SPI, that broader discovery has uncovered significant new evidence that was unavailable to SPI in the Dutch proceedings and which the Dutch courts did not consider. This counsels in favor of permitting the parties to litigate the issue of VVO's transformation based on all the evidence uncovered in the discovery process in this action rather than hamstringing defendants through the application of collateral estoppel after extensive discovery in this action. Other fairness factors also counsel against applying collateral estoppel based on the Dutch judgments, including the easier availability of live witness testimony in U.S. courts. Moreover, unlike in the Netherlands, this case will be tried to a jury rather than to a judge. The district court also noted that there would be a trial in this action regardless of whether the district court affords preclusive effect to the Dutch judgments, so judicial economy did not weigh heavily in favor of applying collateral estoppel. Accordingly, the district court determined that it would be unfair to apply collateral estoppel to prevent SPI from asserting the propriety of VVO's transformation into VAO at trial. Therefore, the district court will not afford preclusive effect to the Dutch judgments.

Russian proceedings. Next, the district court in its discretion found that the application of collateral estoppel based on the Russian judgments would be inappropriate in this case even if, the district court were to recognize the Russian judgments as a matter of comity and find that the four legal prerequisites for collateral estoppel were satisfied. The district court also noted that due to the limited information the district court had regarding the Russian proceedings, it would be unfair to apply collateral estoppel based on the Russian judgments.

Similar to the limited discovery available in the Dutch judicial system, SPI has represented that in Russian arbitrazh courts, “in contrast to U.S. discovery, the Code of Arbitrazh Procedure gives a litigant limited ability to obtain evidence from other parties.” “A litigant before the arbitrazh court has no right to request categories of documents from an adversary or third party,” and “although a litigant may petition the court for an order requiring an adversary or third party to produce specifically identified documents, arbitrazh courts have wide discretion in deciding whether to grant such petitions.” The participation of witnesses in arbitrazh proceedings is rare and limited and, even when witnesses do testify, U.S.-style cross examination of witnesses is generally not possible in arbitrazh proceedings. The Russian courts heard no witness testimony in the litigation between FTE and SPI that resulted in the judgments against SPI. In light of these procedural differences between the Russian courts and the district court, this is a case where it would be unfair to apply offensive collateral estoppel because this litigation affords the defendants procedural opportunities unavailable in the first action that could readily cause a different result. In the Russian proceedings, SPI was forced to defend in an inconvenient forum where it was unable to engage in full scale discovery or call witnesses, which suggests that application of offensive collateral estoppel may be unwarranted.

As noted above, this action will be tried to a jury rather than to a judge as was the case in the Russian proceedings. Giving preclusive effect to the Russian judgments would not obviate the need for a trial in this action, so judicial economy does not weigh heavily in favor of applying collateral estoppel. Therefore, the district court will not afford preclusive effect to the Russian judgments.

Accordingly, the plaintiffs’ motion for partial summary judgment was denied.

The Case is No. 1:14-cv-00712-SHS.

Judge: Stein, S.

Attorneys: Anastasia Marie Fernands (Quinn Emanuel Urquhart & Sullivan LLP) for Federal Treasury Enterprise Sojuzplodoimport. Keith R. Hummel (Cravath, Swaine & Moore LLP) for Spirits International B.V.

Companies: Federal Treasury Enterprise Sojuzplodoimport; Spirits International B.V.

Cases: Trademark NewYorkNews