Economic (business) disputes involving individuals may be arbitrated.

15.06.2010

Legal Update No. 151.

Goltsblat BLP advises that the Presidium of the Supreme Arbitration Court (SAC) of the Russian Federation has published Ruling No. 17095/09 of 20 April 2010.

The Presidium of RF SAC examined a supervisory appeal by Edimax Limited filed against termination of the proceedings under case No. А40-19/09-ОТ-13 on a lawsuit filed with London Court of International Arbitration for recovery from Sh. Chigirinsky of debts of over US$32,000,000. The case had been closed by the Moscow District Federal Arbitration Court as not being subject to arbitration because the key criteria for arbitration are appropriate legal subjects (legal entities, individual entrepreneurs) and economic nature of the claims.

The Presidium of the RF SAC reversed the Moscow District Federal Arbitration Court decision and remanded the case for new examination.

The above RF SAC Ruling provides for mandatory application of the following important legal approach by arbitration courts:

  • arbitration courts of the Russian Federation may impose interim measures with regard to cases examined by foreign tribunals (international commercial arbitration courts).
  • all disputes arising out of a transaction made by an individual may be admitted for arbitration, provided the purpose of the transaction was to secure a transaction of an economic (business) nature (for example, a surety agreement). Whether or not such an individual has been registered as an individual entrepreneur is not, therefore, relevant.

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