Legislation on Arbitration Tribunals in Russia Revamped
Legal Update № 552
Goltsblat BLP advises that federal laws were signed on 29 December 2015 revamping the legislation on arbitration tribunals in Russia.
In particular, Federal Laws No. 382-FZ and No. 409-FZ were adopted. The former, entitled “On Arbitration (Arbitration Proceedings) in the Russian Federation", replaces the effective Federal Law No. 102-FZ "On Arbitration Tribunals in the Russian Federation" of 24 July 2002; the latter amends Law No. 5338-1 "On International Commercial Arbitration" of 7 July 1993, the RF Commercial and Civil Procedure Codes and other regulations.
Standing arbitration institutions
New rules are coming in to govern creation and operation of standing arbitrations institutions, which may only be established under non-profit organisations (NPOs). The Russian Government will grant the right to function as a standing arbitration institution through a recommendation from the Arbitration Proceedings Improvement Board, which is to be set up under the Russian Ministry of Justice. In formulating its recommendations, the Board will consider whether an institution has a compliant recommendatory list of arbitrators, look at the relevant NPO’s reputation and take account of its scope and type of business, etc.
The International Commercial Arbitration Court and Maritime Arbitration Commission under the Russian Chamber of Commerce and Industry will not need any additional rights to function as standing arbitration institutions.
Ad hoc arbitration will be preserved but with certain limitations:
corporate disputes may not be arbitrated ad hoc;
parties may not stipulate finality of ad hoc arbitration awards,
ad hoc tribunals will not be able to seek assistance from a court of law in collecting evidence.
The new laws determine the range of arbitrable corporate disputes and lay down terms and specifics of arbitrating such disputes.
Arbitration tribunals may administer the corporate disputes listed in article 225.1 (1) of the RF Commercial Procedure Code, with certain limitations (excluding, for example, disputes over convening general shareholders' meetings or expelling a participant from a company; disputes arising from notarisation of transactions with participatory interests in limited liability companies; disputes related to “strategic” legal entities under Federal Law No. 57-FZ (other than the ones arising from transactions with shares (participatory interests) in their authorised capital that do not require pre-approval), and others); the disputes specified in article 22.1(3) of the RF Civil Procedure Code and corporate disputes not expressly mentioned in article 225.1(1) (1) - (9) of the RF Commercial Procedure Code.
Corporate disputes may only be considered in an arbitration being administered by a standing arbitration institution.
Disputes may only be referred to an arbitration tribunal provided that the legal entity, all participants therein and other parties acting as claimants or defendants have signed an arbitration agreement.
Corporate disputes are to be considered under corporate dispute arbitration rules that have been approved, deposited and posted on the relevant arbitration institution's website (except for certain case categories); arbitration agreements with respect to such disputes may be executed through inclusion in the company's articles (or amendments thereto).
In most cases, the seat of arbitration for corporate disputes should be Russia.
The above regulations and requirements to the rules of arbitration for corporate disputes also apply to foreign arbitration institutions authorised to function as such.
The criteria for referring disputes to international commercial arbitration have been expanded. In particular, disputes will now also be arbitrable if any place where a substantial part of the obligations arising out of the relations between the parties is to be performed or to which the disputed matter is most closely linked is located abroad.
The shift also affects certain execution and validity issues relating to arbitration agreements, including upon substitution of parties in an obligation, as well as civil law liability of arbitrators, conflicts of interest and NPO's responsibility for improper performance by a standing arbitration institution of its functions.
Provisions have been added to the RF Commercial and Civil Procedure Codes governing court assistance to arbitration proceedings, in particular, in obtaining evidence and handling issues related to appointment, removal and challenging of arbitrators.
As for international commercial arbitration, a legal framework has been created for arbitral institutions to impose interim relief until an arbitration tribunal panel is set up.
Entry into force
Effective from 1 September 2016, Federal Laws No. 382-FZ and No. 409-FZ will apply to arbitrations and court hearings of cases initiated thereafter. Transitional provisions are laid down for arbitrations already under way and continuing on the amendments' effective date.
In addition, within three months of Federal Law No. 382-FZ taking effect, the Russian Government is to approve a procedure for setting up standing arbitrations institutions and depositing their rules; upon expiry of one year thereafter, standing arbitration tribunals and arbitration institutions that fail to obtain authorisation to function under the new rules will lose their right to administer arbitrations. Disputes previously administered by such institutions will be further considered on an ad hoc basis.
Arbitration agreements to refer corporate disputes to arbitration in accordance with the amendments brought in by Federal Laws Nos. 382-FZ and 409-FZ may be executed from 1 February 2017.
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