International Arbitration in Russia under the new legislative framework
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1 International Arbitration in Russia under the new legislative framework Dmitry Davydenko Ph.D. in Law (Russian Federation), Executive Secretary of Maritime Arbitration Commission at the Russian Chamber of Commerce and Industry, Director of CIS Arbitration Forum
2 International Arbitration in Soviet Union: Maritime Arbitration Commission (since 1930, > 4500 cases) & Foreign Trade Arbitration Commission (since 1932, > cases) at the Chamber of Commerce and Industry of Soviet Union
3 Post-Soviet period Law of the Russian Federation on International Commercial Arbitration 1993 (98% based on the UNCITRAL Model Law 1985) Federal Law on Arbitration Courts in the Russian Federation 2002 No restrictions on founding an arbitral institution. Reform: Federal law on arbitration (arbitral proceedings) in the Russian Federation (2015, in force since September 2016). based on the UNCITRAL Model Law 1985; + amendments to the law of 1993 Separate (but similar) regulation for domestic and international arbitration.
4 Reasons for the reform: Proliferation of dubious and low-quality arbitration institutions (c in total!) Abuse of arbitral procedure, sham arbitrations Arbitration centers affiliated with a large company ( pocket arbitration courts ) => Lack of trust from the state judges. Essence of the reform: Establishing control at the entrance (and on the road)
5 Main features of the new law: Government permission needed to establish / operate a permanent arbitral institution (since November 2017). Exceptions: ICAC, MAC; Only two centers obtained it and only 19 applied for it. 50 intend. an arbitral institution must be a unit of non-profit entity; arbitration rules to be approved by the Ministry of Justice; List of recommended arbitrators: >1/3 doctors of law (in civil law or procedure), >1/2 10 years experience as an arbitrator or a judge; One person in 3 lists of recommended arbitrators, not more.
6 Waiver of certain rights by the parties now needs to be expressly specified in their agreement: To request state court to decide on lack of competence of the arbitral tribunal to hear the dispute; To apply at state court to appoint or challenge an arbitrator; To require an oral hearing; To challenge the arbitral award. By express agreements (not by reference to institutional rules)
7 Consequences Limited number of arbitration providers; Role of each arbitration provider to grow; Better quality of administration(?) If the institution was unauthorized to administer the arbitration, it is considered ad hoc(?). More int. arbitrations with Russian parties outside Russia(?) If both parties are Russian and no foreign connecting factor arguably no right to arbitrate outside Russia. Much will depend on the state judges stance.
8 Stance of the state judges In early 2000s: courts tended to broadly construe Russian public policy. Now they tend also to narrowly construe arbitrability: - Contracts concluded as result of an obligatory public bid by statecontrolled company; - Contracts re forest plots; - Concession agreements? Involvement of public interests prevails over private nature of the contracts.
9 Stance of the state judges Control at the exit. Examples of what the courts review in practice: Did the arbitral tribunal check the compliance with corporate procedures of approval major transactions? Was the contract real or sham? Was it actually performed? Did the contracting parties comply with regulation on foreign currency transactions?
10 Rules for international disputes of International Commercial Arbitration Court and of Maritime Arbitration Commission at the Russian Chamber of Commerce and Industry Committee on appointments of arbitrators (renewed to 1/3 once in 2 years); Expedited procedure for small claims (< USD) Joinder and consolidation simplified; Discipline parties representatives Misconduct may affect allocation of expenses; request to replace the representative; Award may be published (but all names etc. to be erased).
11 Experience in maritime arbitration in Russia 2017 Active participation of the parties. Many submissions. Even in small disputes: expedited procedure not preferred; Electronic data exchange ( s, Dropbox etc.); Same persons often appointed as arbitrators by the parties. Resulting challenges; Legal academics with high reputation often appointed by the parties.
12 Sources of additional information. For prospective authors:
13 First Comprehensive Overview of Commercial Arbitration in the CIS Region
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