NEWS
27 September 2011
Arbitral tribunals may hear cases dealing with real estate, confirms the Supreme Arbitrazh Court
Yesterday the Supreme Arbitrazh Court (SAC) recognized that arbitral tribunals are authorized to hear cases on rights to real estate. The Bank of Kazan demanded to levy execution on the real estate of ??? Bulgarregionsnab pledged as security against the granted credits. On March 25, 2009 the arbitral tribunal allowed the bank’s claim, with the arbitrazh courts later enforcing that decision. However, the pledger applied to the SAC challenging the issuance of the writ of execution. Bulgarregionsnab referred to the provision stating that only state courts may issue judgments in cases dealing with the real estate where the rights thereto must be recorded in a public register. Given that the scope of the arbitral tribunals’ jurisdiction is determined in the legislation rather vaguely, the SAC sent an inquiry to the Constitutional Court, which on 26 May voiced its support of the arbitral tribunals. Yesterday the SAC Presidium upheld the judgments of the arbitrazh courts, which issued a writ of execution to the Bank of Kazan.
15 July 2011
Amendments to the Russian Law “On International Commercial Arbitration” introduced in the Russian federal parliament
The major amendments are going to be introduced into the Federal Law “On International Commercial Arbitration” in the nearest future. A bill, proposed before the State Duma (lower chamber of the Parliament of Russia), is intended to bring Russian legislation on international commercial legislation into compliance with Model Law on International Commercial Arbitration, as amended by the UN Commission on International Trade Law (UNCITRAL) in 2006.
The proposed amendments cover definition and form of the arbitration agreement. In particular, definition of the arbitration agreement is further clarified. The form of the arbitration agreement and the moment of its conclusion are also being elaborated. For example, arbitration agreement will be validly concluded in written form in respect to electronic messages, if content of such messages is available afterwards and the arbitration agreement meets the requirements for the conclusion of contracts by use of electronic messages.
Another important novelty is connected with authorities of the arbitral tribunal to impose interim reliefs. The said bill empowers the arbitral tribunal to pass interim relief valid for 20 days after the motion of a party to a dispute. Moreover, a party may file a motion on the interim relief before filling a lawsuit and without notification of another party.
Preliminary decision of an arbitral tribunal on the provisional measures will bear the mandatory character for the parties, although will not be subject to enforcement by state courts. After the arbitral tribunal passes the preliminary ruling on the provisional measures, it is obliged to notify the respective parties and to give them a possibility to state their positions within a specified period.
The proposed bill is another evidence of positive changes in Russian legislation, regulating international commercial arbitration, and commemorates further steps in giving credit to alternative dispute resolution in Russia.
19 to 21 May 2011
Saint-Petersburg hosted the first International Legal Forum organized by the Ministry of Justice of the Russian Federation, with assistance of the Administration of the President of the Russian Federation, the Supreme Commercial (Arbitrazh) Court of the Russian Federation and the Government of the city of Saint-Petersburg.
After the plenary session, where the President of the Russian Federation D.A. Medvedev and other distinguished guests gave speeches, the forum was continued in the form of round-table conferences. The moderator of the round-table “Legal Protection of Business: Modern Ways of Enhancing Accessibility and Efficiency of Justice and Alternative Dispute Resolution Methods” was the Chairman of the Supreme Commercial (Arbitrazh) Court of the Russian Federation A.A. Ivanov.
The forum is intended to become a top-ranked venue for a dialogue between the lawyers with different areas of practice, politicians, representatives of business and science.
The Saint-Petersburg International Legal Forum will be held annually and is expected to become one of the major events of the year for representatives of the legal profession in Russia, CIS and Europe.
14 February 2011
“Infotropic Media” publishing house issued the book “International Commercial Arbitration: Domestic Regulation Experience. Selected Documents and Analytic Materials. 80 years’ activity of MAC at the USSR CCI/RF CCI. 1930–2010”.
This book is a chronicle allowing to trace MAC’s history in its dynamics, with all its pros and cons.
The reader will find various regulatory acts about MAC, its rules of practice, numerous archive documents, statistical, analytic and scientific materials.
This edition is meant for lawyers dealing with the issues of merchant shipping and international commercial arbitration, arbitrators, judges, scholars, teachers, post-graduates and students of law schools and departments.
11 January 2011
Amendments to the Russian Law on International Commercial Arbitration proposed by the Ministry of Economic Development
The Ministry of Economic Development of the Russian Federation has recently proposed amendments to the Federal Law “On International Commercial Arbitration”.
The amendments reflect more than fifteen years of application of that Law. They also reflect the 2006 amendments to the UNCITRAL Model Law on International Commercial Arbitration which was the basis for the Russian Law. In particular, the Ministry’s draft proposes the following changes:
• to ensure that observance of good faith and generally recognized principles of law are taken into consideration in interpreting foreign law;
• allow conclusion of arbitration agreements in various forms, including e-mails exchange;
• regulate in more detail provisions on granting interim measures by international arbitral tribunals;
• enable parties to agree about finality of the arbitral award, without the option of its challenging it in court (by analogy to the provision of the Federal Law “On Arbitration Courts in the Russian Federation” 2002).
The proposed amendments purport to bring the Russian regulation in line with international standards, such as making the form of arbitration agreements more flexible. Also they aim to make Russian law related to international arbitration more predictable.
For historical reasons, international commercial arbitration with arbitration seats in countries like Russia. However, there is a steady tendency for growth. Given the confidential nature of international business transactions and arbitral proceedings, one cannot produce exact statistical data as to how often Russian persons settle their disputes by arbitration. It is beyond doubt, however, that in international transactions international commercial arbitration has traditionally been the primary means of dispute resolution. Being participants of international trade, Russian businesses also increasingly resort to international arbitration. The amendments indicate the business’ need for efficient resolution of international disputes. In the light of this, they should no doubt be welcomed. On the other hand, these amendments fall short of completely reaching this goal: for example, the provisions on enforcement of the interim relief granted by commercial court contained in the UNCITRAL Model Law were not included in the law.
The full text of the Draft law is available here (in Russian).
01 December 2010
The conference “International arbitration and state courts: balance of interests” took place at the Congress Centre of the Chamber of Commerce and Industry of the Russian Federation.
The conference was organized by the International Chamber of Commerce, the ICC International Court of Arbitration and the RF Chamber of Commerce and Industry. Among the persons giving a speech at the conference were the advisor of the Russian President, Chairman of the Council of the Research Centre of Private Law, V.F. Yakovlev, well-known foreign international arbitration experts: Sir Anthony Colman, Professor Matthew Weiniger from Great Britain, Judge Dominique Hascher from France and other foreign and local lawyers.
In his opening speech, the Vice-President of the Chamber of Commerce and Industry of the Russian Federation, V.B. Isakov, noted, in particular, that an adequate regulation of the international commercial arbitration and assistance to that procedure by state courts, inter alia, in respect of enforcement of awards of international arbitration courts is an essential part of legal environment favourable for business development and attraction of investments.
The first session moderated by Director of the Centre of Arbitration and Mediation, V.V. Chubarov, was dedicated to relations between the state court system and arbitral tribunals. The Chairman of the RF Supreme Arbitrazh Court A.A. Ivanov emphasized that the general principles of commercial disputes resolution are common for all countries, including Russia. The universally acknowledged rules should be adapted to Russian conditions.
Touching upon the relations between the state arbitrazh courts and arbitration tribunals, the Chairman of the Supreme Arbitrazh Court stressed that, in his opinion, there should be no conflict between the said judicial bodies, and that the parties’ will should be the top priority. Where parties are willing that their case be heard by an arbitration tribunal, all reasonable measures should be taken for such dispute to be resolved by the same. It does not mean, however, that state courts should have no control over courts of arbitration. State courts should take charge if, in some respects, there is an abnormal development of the process and the parties’ will is not indicated at any stage.
A.A. Ivanov urged to pay close attention to solving the problem of the so-called “pocket” sham arbitration courts’ existing at a certain bank, company or holding. He proposed to introduce amendments into the law on arbitration courts restricting the requirements to independence of arbitration courts.
15 November 2010
The draft amendments to the Russian Civil Code prepared by the Codification Council at the President of the Russian Federation has been officially published for discussion. In particular, the proposed amendments to the Division VI “Private International Law” drafted by the Working Group chaired by Professor I.S. Zykin can be consulted in Russian at the websites of the High Arbitrazh Court and of the Private Law Research Center.
The proposed amendments are based on the practical experience of application of norms from this division and take into account the cutting-edge foreign experience. They have significance, first and foremost, for foreign trade participants as well as the persons providing them with professional legal support: in-house lawyers and legal advisors. The proposed amendments to this Division are particularly important given, among other things, Russia’s increasing involvement into international trade. They are aimed at broadening the parties’ will autonomy principle when choosing the applicable law as well as at making the regulation of legal relations with foreign element more consistent and expanded but, at the same time, more flexible and responsive to requirements of private law modernization.
11 October 2010
Property of the Russian Federation has been seized in Sweden upon the motion of a German businessman.
German businessman Franz J. Sedelmayer, claiming 5 million Euro as compensation for the lost investments, has eventually succeeded in the seizure of the property of the Russian Federation in the territory of Sweden. The seizure is an injunction measure in the proceedings held in the Supreme Court of Sweden. The businessmen has not specified the secured property, but informed that “the prudent estimate of the Russian property in Sweden amounts to 2―3 million Euro”.
This is not the first time the businessman has used his best efforts to get the compensation for investments which he lost in 1990 trying to set up an enterprise in St. Petersburg. Award in favor of Franz Zedelmayer was issued in 1998 by the International Commercial Arbitration in Stockholm. In particular, Mr. Zedelmayer tried to seize exhibits of the Roscosmos at the international airspace conference ILA 2006 in Berlin. The attempt was not a success since the security guards did not let the bailiffs in the territory. Mr. Zedelmayer’s attempts were more effective in relation to the group of buildings of the Soviet trade representation office in Cologne. The businessman reported that received only 1 million Euro from the bargain, but the group of buildings is still being traded on the auction. Last fall the businessman failed to sell the “Russian house of the Science and Culture” (Russisches Haus der Wissenschaft und Kultur) in Berlin. German courts ruled that “the house” enjoys the sovereignty of Russian state. On January 20, 2008, bailiffs seized the dividends (about 38 thousand Euro) to be paid by the Swedish company JSC “RusWood” to the Russian Federation.
Experts say that not only the property of the state bodies may be seized but the assets of the state-controlled company as well. Similar efforts to pursue the Russian property abroad were undertaken by the Noga company.
05 October 2010
The Supreme Arbitrazh Court confirmed that only final awards are enforceable in Russia.
A Swedish company Living Consulting Group AB applied at the Arbitrazh Court of Saint-Petersburg and region to enforce the separate arbitral award rendered under the rules of Arbitration Institute of Stockholm Chamber of Commerce. According to this award, Russian OOO “Sokotel” was obliged to reimburse the company for the advance on arbitration costs which was to be paid by the parties in equal proportion.
This award was passed by the arbitral tribunal independent of the arbitration proceeding between the parties to the dispute which was finished later. Presidium of the Supreme Arbitrazh Court of the Russian Federation in its Decree No. 6547/10 ruled that such award may not be enforced in the territory of Russia. It explained as follows:
Pursuant to provisions of the Russian Law on international commercial arbitration, an arbitral award shall mean an act containing conclusions on satisfaction or dismissal of the stated claims, specifying the amount of the arbitration fee, arbitration costs and the way they are allocated between parties. Consequently, only the arbitral awards issued upon completion of all arbitration procedures may be enforced.
In the present case, the disputable award is interim. Pursuant to the arbitration rules of the Arbitration Institute of Stockholm Chamber of Commerce, the final amount of arbitration costs is distributed between the parties through inclusion of the amounts into the award on the merits.
Respective provisions of the Russian Arbitrazh Procedure Code are not applicable to interim arbitral awards as well as to awards rendered in respect of any procedural matters (recovery of costs, determination of competence, taking of provisional measures). They may not be enforced in Russia.
27 August 2010
Rules on impartiality and independence of arbitrators adopted in Russia
The President of Russian Chamber of Commerce and Industry approved Rules on impartiality and independence of arbitrators. The Rules are designed to serve as guidance for arbitrators and bodies administering arbitrations and competent to decide on termination of the arbitrators’ mandate.
The Rules specify the circumstances in which the arbitrator is obliged to withdraw from his/her office or at least to notify the parties or may be challenged by a party. The Rules elaborate on the communication between the arbitrators and the parties or their attorneys. Also the Rules specify the procedure for challenging an arbitrator by an interested party.
They have been approved and recommended for application by the Presidium of the International Commercial Arbitration Court at the Russian Chamber of Commerce and Industry and by Management Board of the Russian Center for Assistance to Arbitration.
27 July 2010
The mediation bills (“On alternative procedure of dispute settlement with participation of a mediator (mediation procedure)” and the complementary bill) have become federal laws and shall enter into force on 1 January 2011.
7 July 2010
Russian State Duma approved in the third reading the draft law “On alternative procedure of dispute settlement with participation of a mediator (mediation procedure)” and the complementary law.
Now for the bills to become laws only the President’s approval is required.
1 July 2010
The Federal Law No. 262 “The support of the access to the information about the courts’ activities in the Russian Federation” came into effect. The initiative of the President of Russia Dmitry Medvedev aims to ensure the transparence of the court decisions.
This document specifies not only the right to the information about the courts’ activities, but also the duty of the courts to give efficiently the information about their activity. The statute enhances the principle of the publicity of the trial, which is stated in the Constitution of Russian Federation.
30 June 2010
Russian State Duma approved in the second reading the draft law “On alternative procedure of dispute settlement with participation of a mediator (mediation procedure)”.
The State Duma has adopted the bill introduced by the President of Russian Federation at the second reading, and the complementary bill on introduction of amendments to the certain legislative acts of Russian Federation in connection with the adoption of such federal statute. The purpose of the procedure is to settle the disputes in the civil, family and labour relationship with the assistance of the independent mediator.
28 June 2010
The General Meeting of arbitrators of the International Commercial Arbitration Court at the Russian Chamber of Commerce was held where Professor Alexey Alexandrovich Kostin was elected as the Chairman of the ICAC, Professor Ivan Semenovich Zykin was elected as the first Deputy Chairman of the ICAC, Professor Evgeny Alekseevich Sukhanov was elected as the Deputy Chairman of the ICAC.
14 May 2010
Russian State Duma approved in the first reading the draft law “On alternative procedure of dispute settlement with participation of a mediator (mediation procedure)”.
20 April 2010
High Commercial Court of the Russian Federation granted interim measures in support to arbitral proceedings in London
The Russian legislation allows the commercial courts to grant interim measures at the request of a party to arbitral proceedings regardless of the seat of arbitration. However, the courts are often reluctant to grant them. Now the High Commercial Court Presidium ruled in favor of such interim measures (case No. A4019/09-OT-03).
A Cypriot company “Edimax Limited” sought interim measures in order to secure a claim filed in 2009 at LCIA against a Russian citizen. The claimant requested the Russian courts to order seizure of the apartment in Moscow belonging to the respondent, prohibition for the Russian registering authority to register any transfer of title to the said apartment and prohibition for the technical inventory authority to perform any actions in respect of the said apartment. The court of 1st tier had refused to grant any interim measures, finding that the claimant failed to prove their necessity. However, the appellate court (2nd tier) had granted the requested interim measures. The cassation court found that this application on interim measures fell beyond the competence of commercial courts as the respondent was not an individual entrepreneur. However, the High Commercial Court Presidium has confirmed the opportunity of the commercial courts to assist foreign arbitrations, even though the party to arbitration is an individual, provided that the dispute is of economic nature.
30 March 2010
The X Congress of the International Association of Supreme Administrative Jurisdictions was held in Australia (in Sydney and Canberra) from the 7th to the 11th of March, 2010. The Supreme Arbitrazh Court of the Russian Federation was represented at the congress by the Judge of the RF SCC O.Yu. Gvozdilina and the specialist of RF SCC Department of International Law and Cooperation Borisov G.A.
The representatives of 52 Supreme Administrative Courts from various jurisdictions, including the European Court of Justice, have discussed the issues related to the jurisdiction of judicial bodies, the procedure of review of the administrative decisions and the scope of authority of an administrative court judge.
22 March 2010
1st issue of “Bulletin of the International Commercial Arbitration” published in Russia
Since 2010 the Infotropic Media Publishing House, supported by the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation, the Chamber of Commerce and Industry of the Russian Federation and a number of law firms, including Muranov, Chernyakov & Partners (www.rospravo.ru), publishes the only Russian journal devoted exclusively to the international commercial arbitration issues.
The publication of the “Bulletin of the International Commercial Arbitration” in Russia is an extraordinary and significant event for the legal and business community, as well as for all those involved with private international law, international trade and arbitration proceedings in one or another way.
Members of the editorial board include such well-known Russian experts in the international commercial arbitration (ICA) sphere as A.S. Komarov, S.N. Lebedev, A.L. Makovsky, M.G. Rozenberg, A.A. Kostin and some other prominent Russian legal scholars and practitioners. The Chief Editor of the new journal is the Head of the Private International Law Department of the Private Law Research Centre at the RF President, Ph.D. in Law (candidate of legal sciences), arbitrator of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation A.N. Zhiltsov.
11 March 2010
Mediation bill brought forward by President Dmitry Medvedev
The Russian President Dmitry Medvedev introduced into the State Duma (the lower chamber of the federal parliament) a draft federal law “On Alternative Procedure of Dispute Settlement with Participation of Mediator (Mediation Procedure)” together with a complementary bill on amending certain legislative acts of the Russian Federation in view of adopting such federal law.
The scope of application of the President’s bill encompasses mediation in civil, commercial, labor and family disputes. The bill provides regulation mostly with regard to connection between mediation and litigation or arbitration. It specifies the modalities of commencing mediation procedure when the dispute is already at court; entering into the mediation agreement; establishes procedural guarantees of confidentiality of the mediation procedure; concluding mediated settlement agreement.
Adoption of such law is likely to contribute to development of mediation in Russia, both in domestic and international disputes.
01 March 2010
Judgments of the European Court of Human Rights form ground for reviewing civil cases in Russia
The Russian Constitutional Court held that the courts of general jurisdiction may not avoid reviewing civil cases on the ground of judgments of the European Court of Human Rights in Strasbourg. The Constitutional Court filled the gap in the Code of Civil Procedure allowing courts to set aside motions for review. Experts see this decree as a halfway measure: on the one hand, the Constitutional Court stressed the mandatory nature of the Strasbourg Court’s judgments for Russia, but, on the other hand, it never guaranteed that Russian courts will invariably take favourable decisions for the applicants.
4 February 2010
Major international telecom merger approved by Russian Government Commission
The Government Commission for Foreign Investment Control approved the merger of the Russian VimpelCom with the Ukrainian mobile operator Kievstar forming a new company VimpelCom registered in the Bermudas. Now it is for the VimpelCom minority shareholders to decide whether to approve the deal which will put an end to the five years’ conflict between Alfa Bank and the Norwegian Telenor. The operator promises to send them the offer in the nearest days.
1 February 2010
Energy Charter Treaty interim awards in investment arbitration cases against Russia made public
The interim awards on jurisdiction and admissibility rendered by the Permanent Court of Arbitration in Hague on 30 November 2009 in cases instituted by three foreign investment funds against Russia have been published on the Investment Treaty Arbitration website. The awards admit Energy Charter Treaty claims worth up to US$100 billion to proceed against Russia. The tribunal found that Russia is bound by its obligations under the Energy Charter Treaty even though it never ratified this international instrument, on the ground of “provisional application”.
The claimants are Hulley Enterprises Limited (Cyprus), Yukos Universal Limited (Isle of Man), Veteran Petroleum Limited (Cyprus). The proceedings are conducted under the UNCITRAL Arbitration Rules 1976.
22 January 2010
Russian court passed a ruling on seizure of the US-based property
The Basmanny district court of the city of Moscow ordered the seizure of the New York apartment of the political émigré Boris Berezovsky securing the civil claim of Mr. Vladimir Terliuk residing in London. The claim was filed in the course of investigation of the criminal action on Article “Intentionally false denunciation” initiated by the Investigating Committee under the Prosecutor General’s Office of the Russian Federation against Mr. Berezovsky. The Russian court is expected to address the New York court for enforcement of the said judgment.
The Constitutional Court of Russia backed the forming of the case law in Russia simultaneously demanding that this process be conducted in strict compliance with and regulated by the law
In recent years the case law has been actively introduced into the commercial courts system: the Supreme Arbitrazh Court (SAC) demanded that lower courts take into consideration its legal views in particular cases. In addition to that, SAC stated about the necessity to review the cases having been resolved differently by the time the precedent was set. This, however, may only be done in exceptional cases, the Constitutional Court of Russia officials believe — e.g., when a precedent increases protection of people in dispute with public authorities. The Constitutional Court ruled that the SAC legal views may only have retroactive force in exceptional cases and subject to SAC separately specifying that this particular SAC decree has retroactive force.
7 December 2009
Russia’s Supreme Arbitrazh Court upholds lower courts judgments which recognized and enforced a Dutch court judgment on the basis of international comity
On June 5, 2009 the Arbitrazh court of Moscow region by its ruling in case No. A41-9613/09 recognized and enforced the judgment of the District court of Dordrecht rendered upon a dispute which arose out of a commercial lease between a Dutch company Rentpool B.V. and a Russian company “Podyemnye technologii” LLC. The court held that the judgment is subject to recognition and enforcement in the territory of the Russian Federation on the basis of the principles of reciprocity and comity of nations even in absence of a bilateral treaty between Russia and the Netherlands on recognition and enforcement of judgments. Such finding was upheld by the Federal Arbitrazh Court of Moscow Circuit in the Ruling of July 29, 2009. The Supreme Arbitrazh Court by its ruling No. BAC-13688/09 of 7 December 2009 upheld these judgments and pointed out that the international comity obliges states to be respectful towards foreign legal systems.
02 December 2009
The Hague Tribunal found itself competent to hear a case against Russia under the Energy Charter
Group Menatep Limited (GML), representing the former YUKOS owners, got a prospect of suing Russia for $100 bln. The Permanent Court of Arbitration (also known as the Hague Tribunal) rendered an award about the Energy Charter provisions being applicable to the case under consideration. The court was never abashed by the fact that Russia had officially informed the Depository that it did not intend to become a Contracting Party to the Energy Charter Treaty.
23 November 2009
Champagne house defends its right to CRISTAL in Russia
The Arbitrazh court of Moscow ruled in favor of French-based champagne house Champagne Louis Roederer in a dispute about the CRISTAL trade mark with the Russian Federal state-owned enterprise Soyuzplodoimport.
22 October 2009
Berlin courts confirmed that the ‘Russian house’ cannot be subject to seizure and judicial sale so as to pay the Russian debt exceeding ?4.9 million owed to the German businessman Franz Sedelmeier
Franz Sedelmeier persists in seeking indemnification for the loss of his investment in a joint venture with the St. Petersburg local police service to reconstruct a mansion on Stone Island that was taken over by Russian authorities in 1995. In his most recent endeavor to enforce a 1998 Stockholm ad hoc arbitration award, Berlin district court (Amtsgericht) and state court (Landesgericht) sustained the Russian Government’s argument that the Russian House of Science and Culture is used for sovereign purposes and is therefore immune from seizure. The Russian House serves the purpose of international humanitarian cooperation. Its building sale value is estimated at about ?116 million. The area of the building premises is about 29 thousand sq. meters. Mr. Sedelmeier intends to apply to the German Constitutional Court, but German lawyers say the hearing of his case is unlikely.
22 September 2009
Russia’s Supreme Arbitrazh Court speaks out against formalistic interpretation of arbitration agreements
Russian courts are often criticized for excessively formalistic approach to the application of legal rules resulting in such difficulties for foreign parties’ enforcement of their rights that cannot be reasonably expected or foreseen by the latter. A new ruling of Supreme Arbitrazh Court (also referred to as the High Arbitrage Court) No. 5604/09 in case No. A57-8082/2008-116 orients lower courts to be less pedant in interpreting arbitration agreements provisions. Arbitration agreements are frequently drafted by the parties rather carelessly or vaguely. As result the courts often find that the parties failed to agree upon the arbitral tribunal. In the case in question a German seller Hebenstreit-Rapido GmbH and a Russian buyer OJSC “Saratovskaya” specified in their sale of equipment contract that all disputes and controversies which can arise out of the contract or in relation thereto and which are not resolved through negotiations shall be resolved “in derogation from general court’s jurisdiction through arbitration by the Chamber of Industry and Commerce in Vienna (Austria) in accordance with its regulations”.
A dispute between the parties arose out of this contract and the German seller applied to the International Arbitral Centre of the Austrian Federal Economic Chamber. The Russian debtor repeatedly objected to the arbitral tribunal competence, insisting that he had not agreed upon this arbitration body. However the arbitral tribunal found itself competent and awarded to the claimant 65,430.00 Euro of the principal debt with interest and arbitration costs. As the debtor failed to voluntarily execute the award, the German creditor applied for the award recognition and enforcement in the Arbitrazh Court of the Saratov Region.
In August 2008 the court refused to recognize and enforce the award on the ground that the parties failed to agree upon the arbitration body. The court held that it followed from Article 7 of the Russian Federal Law on International Commercial Arbitration (which is almost completely based on the UNCITRAL Model Law) that the arbitration agreement must clearly indicate the arbitration institution, yet the said contract provided that the disputes should be resolved directly by the Chamber of Industry and Commerce under its regulations rather than by some arbitration institution. The court also held that the arbitration clause did not specify the International Arbitral Centre of the Austrian Federal Economic Chamber or its arbitration rules. The court found that the award recognition and enforcement would contradict to Article V(1)(c) of the New York Convention and Article 36(1) of the Russian Federal Law on International Commercial Arbitration
The Federal Arbitrazh Court of Povolzhsky Circuit in October 2008 upheld this judgment.
On September 22, 2009 Russia’s Supreme Arbitrazh Court Presidium annulled the judgments of the lower courts and remanded the case to the court of the first tier. The highest court ruled that “in essence the first tier court refused to recognize and enforce the foreign arbitral award on a formal ground of non-coincidence of the foreign arbitration court name as specified in the arbitration clause with the international arbitration court which rendered the award”.
The court also pointed out: “As it follows from the arbitration clause, the parties derogated from the jurisdiction of any state courts hearing of disputes between the parties arising out of the contract or related thereto. The parties also undisputedly and unambiguously agreed upon the place of any future arbitration procedure – Austria, Vienna. […] The court of the first tier should have taken into consideration that the Economic Chamber in Vienna is an organization similar to Chambers of Industry and Commerce existing in other countries, whereas the International Arbitral Centre of the Austrian Federal Economic Chamber is the only institutional (permanent) international commercial arbitration court established by it”.