CURRENT TRENDS IN RUSSIAN ARBITRATION LAW By DMITRY DAVYDENKO Ph.D. in law, Senior Associate at Muranov Chernyakov & Partners law firm, Editor at Russia &
Download ReportTranscript CURRENT TRENDS IN RUSSIAN ARBITRATION LAW By DMITRY DAVYDENKO Ph.D. in law, Senior Associate at Muranov Chernyakov & Partners law firm, Editor at Russia &
Slide 1
CURRENT TRENDS IN RUSSIAN
ARBITRATION LAW
By DMITRY DAVYDENKO
Ph.D. in law, Senior Associate at Muranov
Chernyakov & Partners law firm,
Editor at Russia & CIS Arbitration Forum
Slide 2
Plan
• Russian legislative reform on domestic and international
arbitration
• Recent case law on arbitration-related matters
• Enforcement of foreign arbitration awards in Russia
Slide 3
Russian legislative reform on domestic
and international arbitration
The Ministry of Justice prepared a set of measures for the development
of arbitration in Russia on the basis of preliminary elaboration with the
participation of representatives from the legal community.
The key bill of the reform: Federal Law “On arbitral tribunals and
arbitration in Russia”.
Aim of the reform: solving current problems in Russian arbitration.
Slide 4
Current issues of Russian arbitration
• existence of the so-called ‘pocket’ arbitral institutions;
• lack of unified legal requirements for arbitration sufficient to prevent
•
•
•
•
•
abuse (for both domestic and international commercial arbitration);
lack of uniform qualification requirements for arbitrators;
lack of uniform independent bodies for assistance and supervision in
arbitration;
lack of legal liability mechanisms in the field of arbitration;
gaps in legal regulation of the arbitration procedure, something which
reduces its (arbitration) effectiveness; and
lack of clear regulation of the issue of the arbitrability of disputes.
Slide 5
Possible changes offered by the reform
• Liquidation of the dual regime of the rules applicable to
•
•
•
•
•
•
both international arbitration and domestic arbitration.
Only non-commercial organisations can establish
arbitration tribunals.
Registration of arbitration institutions by the Ministry of
Justice.
State control over activity of arbitral tribunals.
Limitation of the arbitrable disputes circle.
Liability of tribunals and arbitrators.
Tax preferences to arbitral tribunals.
Slide 6
Criticism of the reform
•
•
The procedure of arbitration institution’ registration and state
supervision violates the fundamental principles of arbitration and
its contractual nature.
Restricting the arbitrable disputes pays against national tribunals
because disputes will leak to foreign arbitration fora.
• Draft law criticized by the State-Legal Directorate of the
President of Russia
Slide 7
Case law on arbitration-related matters:
trends
• Non-arbitrability course of Russian state courts.
• Struggle against ‘pocket’ arbitration tribunals.
• Awards amounting to an excessive penalty contradicts to
Russian public policy.
• An award rendered in Russia may not be set aside if the
parties have agreed that it will be final.
• An arbitral award issued in Russia may not be set aside
unless it is contrary to public policy.
Slide 8
Resolution of the Supreme Commercial Court No 1567/13
dated 16 July 2013: NO to “pocket” arbitral institutions
The Presidium of the Supreme Commercial Court of the Russian
Federation continued its “holy war” against arbitral institutions attached
to commercial organisations.
The court declared that such courts “objectively” (as such) cannot be
impartial in disputes involving parties belonging to the same group
within such commercial organisation.
The court recognised that the guarantees of paragraph 1 of Article 6 of
the Convention for the Protection of Human Rights 1950 (to a fair and
public hearing within a reasonable time by an independent and
impartial tribunal established by law) are applicable not only to the
proceedings in state courts, but also to arbitration proceedings.
Slide 9
Resolution of the Supreme Commercial Court No 16497/12
dated 23 April 2013: penalty shall not exceed losses
Presidium of the Supreme Commercial Court of the Russian
Federation affirmed relevant lower courts’ decisions to set aside a
domestic arbitral award.
It found that enforcement of an award requiring the respondent to pay
penalty interest in the amount exceeding the losses actually suffered
by the claimant violates Russian public policy.
Slide 10
Decree of the Federal Commercial Court for Moscow Circuit
No А40-125009/12-52-1162 dated 12 March 2013: waiver to
set aside the award enforced
The court held that an award rendered in Russia may not be set aside
if the parties have agreed that it will be final and have waived any
recourse against it.
The court ruled that in such cases the only remedy available to the
losing party would be to object to enforcement of the award.
Slide 11
Decree of the Supreme Commercial Court No 6353/13 dated
10 June 2013: public policy – the only ground to set aside
the award
In 2013 the Federal Arbitrazh Court of the Moscow Circuit formed a
stable practice, according to which an arbitral award issued in Russia
cannot be set aside unless it is contrary to public policy.
Judicial control over it should be exercised at the stage of recognition
and enforcement.
Supreme Commercial Court refused to pass one such case to the
Presidium for a supervisory review.
Slide 12
Resolution of the Supreme Commercial Court No 11535/13
dated 28 January 2014: disputes arising out of government
contracts not arbitrable
The court has ruled that arbitral tribunals cannot resolve disputes
arising out of government contracts.
The court quashed the decisions of lower courts granting enforcement
of a domestic arbitration award in a dispute between a government
agency and a company.
The obligations assumed under the government contract concerned
the performance of public functions.
Under Russian law only civil law disputes may be submitted to
arbitration. A dispute which concerned the performance of public law
functions could not have been submitted to arbitration.
Slide 13
Decree of the Supreme Commercial Court No 11059/13
dated 9 December 2013: disputes arising out of forest block
lease not arbitrable
The Supreme Commercial Court held that a dispute arising out of a
forest block lease contract cannot be resolved in arbitration.
The court referred to the public nature of relations connected with
usage of a forest.
Slide 14
Information Letter of the Supreme Commercial Court No 156
dated 26 February 2013: public policy exception restricted
The Presidium of the Supreme Arbitrazh Court of the Russian
Federation approved the Review of the court practice on public policy
clause application (Information letter No 156 dated 26 February 2013).
The Presidium severely restricted cases of this traditionally popular
ground in Russia for refusal of recognition and enforcement of
international arbitral awards.
Slide 15
Resolution of the Supreme Commercial Court No 8445/13
dated 29 October 2013: NO to party-related institutions
The Supreme Commercial Court noted that the award was rendered
by a party-affiliated arbitral institution.
The court found that the Arbitration Court had been established by
Gazprom and Yamalgasinvest, the claimant in the arbitration, is an
affiliate of Gazprom.
Accordingly, the court held that, as the tribunal was not independent,
the award was contrary to Russian public policy, which requires arbitral
tribunals to be independent.
Slide 16
Enforcement of foreign arbitration awards
• According to statistics in more than 50 % of cases
Russian courts grant enforcement of foreign arbitration
awards.
• However, Russian state courts show an increasing
willingness to recognise and enforce foreign arbitral
awards.
• In most cases applicants were foreign entities and
defendants – Russian companies, including state-owned.
Slide 17
Conclusion
The legislative reform has come to an impasse. This may be
even better for the arbitration in Russia.
The main current course of the Russian courts and
legislator is struggle against party-affiliated arbitral tribunals
and limitation of the arbitrable disputes circle.
Russian courts have become more experienced in the
enforcement of foreign and domestic arbitral awards.
In near future we will see how the new Supreme Court will
approach the cases on enforcement of foreign and domestic
arbitral awards.
Slide 18
CONTACT
INFORMATION
DMITRY DAVYDENKO
Ph. D. in Law
Address: Bld. 6, 23 Denisovsky Lane, Moscow, Russian Federation,
105005
Telephone: +7495 7953279
Fax: +7495 7950390
E-mail: [email protected]; [email protected]
Websites: http://cisarbitration.com/;
http://www.rospravo.ru/en/;
http://iurisprudentia.ru/eng/
CURRENT TRENDS IN RUSSIAN
ARBITRATION LAW
By DMITRY DAVYDENKO
Ph.D. in law, Senior Associate at Muranov
Chernyakov & Partners law firm,
Editor at Russia & CIS Arbitration Forum
Slide 2
Plan
• Russian legislative reform on domestic and international
arbitration
• Recent case law on arbitration-related matters
• Enforcement of foreign arbitration awards in Russia
Slide 3
Russian legislative reform on domestic
and international arbitration
The Ministry of Justice prepared a set of measures for the development
of arbitration in Russia on the basis of preliminary elaboration with the
participation of representatives from the legal community.
The key bill of the reform: Federal Law “On arbitral tribunals and
arbitration in Russia”.
Aim of the reform: solving current problems in Russian arbitration.
Slide 4
Current issues of Russian arbitration
• existence of the so-called ‘pocket’ arbitral institutions;
• lack of unified legal requirements for arbitration sufficient to prevent
•
•
•
•
•
abuse (for both domestic and international commercial arbitration);
lack of uniform qualification requirements for arbitrators;
lack of uniform independent bodies for assistance and supervision in
arbitration;
lack of legal liability mechanisms in the field of arbitration;
gaps in legal regulation of the arbitration procedure, something which
reduces its (arbitration) effectiveness; and
lack of clear regulation of the issue of the arbitrability of disputes.
Slide 5
Possible changes offered by the reform
• Liquidation of the dual regime of the rules applicable to
•
•
•
•
•
•
both international arbitration and domestic arbitration.
Only non-commercial organisations can establish
arbitration tribunals.
Registration of arbitration institutions by the Ministry of
Justice.
State control over activity of arbitral tribunals.
Limitation of the arbitrable disputes circle.
Liability of tribunals and arbitrators.
Tax preferences to arbitral tribunals.
Slide 6
Criticism of the reform
•
•
The procedure of arbitration institution’ registration and state
supervision violates the fundamental principles of arbitration and
its contractual nature.
Restricting the arbitrable disputes pays against national tribunals
because disputes will leak to foreign arbitration fora.
• Draft law criticized by the State-Legal Directorate of the
President of Russia
Slide 7
Case law on arbitration-related matters:
trends
• Non-arbitrability course of Russian state courts.
• Struggle against ‘pocket’ arbitration tribunals.
• Awards amounting to an excessive penalty contradicts to
Russian public policy.
• An award rendered in Russia may not be set aside if the
parties have agreed that it will be final.
• An arbitral award issued in Russia may not be set aside
unless it is contrary to public policy.
Slide 8
Resolution of the Supreme Commercial Court No 1567/13
dated 16 July 2013: NO to “pocket” arbitral institutions
The Presidium of the Supreme Commercial Court of the Russian
Federation continued its “holy war” against arbitral institutions attached
to commercial organisations.
The court declared that such courts “objectively” (as such) cannot be
impartial in disputes involving parties belonging to the same group
within such commercial organisation.
The court recognised that the guarantees of paragraph 1 of Article 6 of
the Convention for the Protection of Human Rights 1950 (to a fair and
public hearing within a reasonable time by an independent and
impartial tribunal established by law) are applicable not only to the
proceedings in state courts, but also to arbitration proceedings.
Slide 9
Resolution of the Supreme Commercial Court No 16497/12
dated 23 April 2013: penalty shall not exceed losses
Presidium of the Supreme Commercial Court of the Russian
Federation affirmed relevant lower courts’ decisions to set aside a
domestic arbitral award.
It found that enforcement of an award requiring the respondent to pay
penalty interest in the amount exceeding the losses actually suffered
by the claimant violates Russian public policy.
Slide 10
Decree of the Federal Commercial Court for Moscow Circuit
No А40-125009/12-52-1162 dated 12 March 2013: waiver to
set aside the award enforced
The court held that an award rendered in Russia may not be set aside
if the parties have agreed that it will be final and have waived any
recourse against it.
The court ruled that in such cases the only remedy available to the
losing party would be to object to enforcement of the award.
Slide 11
Decree of the Supreme Commercial Court No 6353/13 dated
10 June 2013: public policy – the only ground to set aside
the award
In 2013 the Federal Arbitrazh Court of the Moscow Circuit formed a
stable practice, according to which an arbitral award issued in Russia
cannot be set aside unless it is contrary to public policy.
Judicial control over it should be exercised at the stage of recognition
and enforcement.
Supreme Commercial Court refused to pass one such case to the
Presidium for a supervisory review.
Slide 12
Resolution of the Supreme Commercial Court No 11535/13
dated 28 January 2014: disputes arising out of government
contracts not arbitrable
The court has ruled that arbitral tribunals cannot resolve disputes
arising out of government contracts.
The court quashed the decisions of lower courts granting enforcement
of a domestic arbitration award in a dispute between a government
agency and a company.
The obligations assumed under the government contract concerned
the performance of public functions.
Under Russian law only civil law disputes may be submitted to
arbitration. A dispute which concerned the performance of public law
functions could not have been submitted to arbitration.
Slide 13
Decree of the Supreme Commercial Court No 11059/13
dated 9 December 2013: disputes arising out of forest block
lease not arbitrable
The Supreme Commercial Court held that a dispute arising out of a
forest block lease contract cannot be resolved in arbitration.
The court referred to the public nature of relations connected with
usage of a forest.
Slide 14
Information Letter of the Supreme Commercial Court No 156
dated 26 February 2013: public policy exception restricted
The Presidium of the Supreme Arbitrazh Court of the Russian
Federation approved the Review of the court practice on public policy
clause application (Information letter No 156 dated 26 February 2013).
The Presidium severely restricted cases of this traditionally popular
ground in Russia for refusal of recognition and enforcement of
international arbitral awards.
Slide 15
Resolution of the Supreme Commercial Court No 8445/13
dated 29 October 2013: NO to party-related institutions
The Supreme Commercial Court noted that the award was rendered
by a party-affiliated arbitral institution.
The court found that the Arbitration Court had been established by
Gazprom and Yamalgasinvest, the claimant in the arbitration, is an
affiliate of Gazprom.
Accordingly, the court held that, as the tribunal was not independent,
the award was contrary to Russian public policy, which requires arbitral
tribunals to be independent.
Slide 16
Enforcement of foreign arbitration awards
• According to statistics in more than 50 % of cases
Russian courts grant enforcement of foreign arbitration
awards.
• However, Russian state courts show an increasing
willingness to recognise and enforce foreign arbitral
awards.
• In most cases applicants were foreign entities and
defendants – Russian companies, including state-owned.
Slide 17
Conclusion
The legislative reform has come to an impasse. This may be
even better for the arbitration in Russia.
The main current course of the Russian courts and
legislator is struggle against party-affiliated arbitral tribunals
and limitation of the arbitrable disputes circle.
Russian courts have become more experienced in the
enforcement of foreign and domestic arbitral awards.
In near future we will see how the new Supreme Court will
approach the cases on enforcement of foreign and domestic
arbitral awards.
Slide 18
CONTACT
INFORMATION
DMITRY DAVYDENKO
Ph. D. in Law
Address: Bld. 6, 23 Denisovsky Lane, Moscow, Russian Federation,
105005
Telephone: +7495 7953279
Fax: +7495 7950390
E-mail: [email protected]; [email protected]
Websites: http://cisarbitration.com/;
http://www.rospravo.ru/en/;
http://iurisprudentia.ru/eng/