Legislation on Arbitration Tribunals in Russia Revamped

16.09.2016

Goltsblat BLP advises that federal laws Nos. 382-FZ and 409-FZ took effect on 1 September 2016 revamping the legislation on arbitration tribunals in Russia.

Let us recall the key focuses of the reform.

Standing arbitral institutions

New rules are now in place to govern creation and operation of standing arbitral institutions, which may only be established under non-profit organisations (NPOs). The Russian Government will grant the right to function as a standing arbitral institution on the basis of 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 arbitral institutions.

Ad hoc arbitrations will be preserved, with limitations:

  • corporate disputes may not be arbitrated ad hoc;
  • parties may not stipulate finality of ad hoc arbitration awards,
  • ad hoc arbitrators will not be able to seek assistance from a court of law in collecting evidence.

Corporate disputes

The new laws determine the range of arbitrable corporate disputes and lay down the relevant arbitration terms and specifics and list those that may not be taken to arbitration.

  • Arbitration tribunals may administer the corporate disputes listed in part 1, article 225.1 of the Russian Arbitration 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; etc.); the disputes specified in part 3, article 22.1 of the Russian Civil Procedure Code and disputes classed as corporate but not expressly mentioned in clauses 1-9, part 1, article 225.1 of the Russian Arbitration Procedure Code.
  • Corporate disputes may only be considered by an arbitration tribunal under a standing arbitral 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 arbitral institution's website (except for certain case categories).
  • In most cases, the seat of arbitration for corporate disputes should be Russia.

The above regulations and requirements on rules of arbitration for corporate disputes also apply to foreign arbitral institutions authorised to function as such.

What else?

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 novation, as well as civil law liability of arbitrators, conflicts of interest and NPO's responsibility for improper performance by a standing arbitral institution of its functions.

Provisions have been added to the Russian Arbitration 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 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.

Within three months, the Russian Government is to approve a procedure for setting up standing arbitral institutions and depositing their rules; upon expiry of one year thereafter, standing arbitration tribunals and arbitral 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 on referral of corporate disputes to arbitration tribunals in view of the amendments brought in by Federal Laws Nos. 382-FZ and 409-FZ may be executed from 1 February 2017.

Contact details

For all issues related to publications, news and press releases, please contact:

Ksenia Soboleva

Head of PR and Communications

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