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Foreign permanent arbitration institutions in Russia

17 марта 2021

When the Federal Law of 29 December 2015 N 382-FZ “On Arbitration (Arbitration Proceedings) in the Russian Federation” entered into force, the institution of arbitration courts was placed under stricter control from the state."

The main change is associated with the introduction of a new procedure for the creation of permanent arbitration courts. First, the arbitration courts can only take place under non-profit organizations. Secondly, a non-profit organization must obtain permission to exercise the functions of a permanent arbitration institution from the authorized federal executive body (whose functions are performed by the Ministry of Justice). The last rule does not apply to the International Commercial Arbitration Court and the Maritime Arbitration Commission at the Chamber of Commerce and Industry of the Russian Federation, which perform their respective functions by virtue of law. The status of a permanent arbitration institution in the manner prescribed by the Law on Arbitration was granted to the National Center for Sports Arbitration, the Arbitration Center under the Russian Union of Industrialists and Entrepreneurs; Russian Arbitration Center at the Russian Institute of Modern Arbitration.

In addition, the Hong Kong International Arbitration Center (HKIAC), Vienna International Arbitration Center (VIAC) received the status of foreign arbitration institutions recognized as permanent arbitration institutions in the Russian Federation, however, until recently, there were no separate subdivisions of these foreign arbitration institutions on the territory of the Russian Federation.

On 25 April 2019, the Hong Kong International Arbitration Center became the first foreign arbitration institution to be granted permission to function as a permanent arbitration body in accordance with federal arbitration law in Russia.

HKIAC's status as a permanent arbitral tribunal has significant implications under Russian law. First, it means that HKIAC is authorized to resolve certain types of Russian disputes that are not resolved by other arbitration institutions (for example, corporate and procurement disputes). Second, Russian-based parties to HKIAC-administered arbitration proceedings may benefit from Russian litigation assistance in obtaining evidence; also some aspects of judicial review are excluded; and other functions that are not available if the arbitration is administered by an international arbitration institution that does not have the status of a permanent arbitral institution. For international arbitration tribunals located in Russia, the HKIAC administration enforces Russian law to ensure the enforceability and validity of the award.

The Vienna International Arbitration Center was also granted permanent arbitration status on 4 July 2019, making HKIAC and VIAC the only foreign arbitration institutions with such status.

The emergence of permanent foreign arbitration institutions in Russia promotes more frequent consideration of Russian corporate disputes under Russian rules, as well as an increase in the interest of entrepreneurs in the institution of arbitration in general.

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