Originally from The Journal of Eurasian Law (JEL)

Traditional dispute resolution in many of the post-Soviet states is notoriously inefficient and unreliable. Local courts are not trusted because of rumored or reported instances of corruption, as well as a skeptical citizenry reluctant to involve government actors. What is more, independent rating organizations, like the annual Heritage/WSJ economic freedom index, consistently rank the post-Soviet states as failing in the "Rule of Law," which includes enforcement of contracts. This reality limits foreign investment in these countries, slowing economic growth and the standard of living.

Arbitration is a way to bypass the local courts. Many of the post-Soviet states now have laws governing arbitration, although the practice is still in its infancy and remains, largely, a mystery. This article discusses arbitration in the post-Soviet state of Armenia. In addition, this article aims to serve as a practical guide on arbitration in Armenia, explaining among other things how to compel arbitration and enforce an arbitral award--the two critical stages of arbitration where parties must enter the local courts.

I. Introduction

Arbitration is a customizable dispute resolution process—often agreed to during contract formation—involving an impartial arbitrator, submission of evidence, and a final judgment that is enforceable by the state, at the request of the prevailing party.1 The increasing use of arbitration in much of the world is due in large part to the efficiencies arbitration offers, in contrast to state-sponsored litigation, which include cost savings, shorter time to disposition, greater expertise of the decision-maker, and confidentiality, among other things.2

Efficiencies are, of course, jurisdiction specific. In some jurisdictions, the cost of litigation may be less a concern for parties than the ability of the decision-maker to remain neutral and detached, and make an independent decision, for example.3 Regardless, the "non-judicial nature of arbitration" makes arbitration "both [an] attractive and effective" alternative method of resolving disputes if there is corruption in a foreign state’s judiciary or because one or more of the parties "distrust[s] [the] foreign legal system."4 What is more, arbitration is now available in much of the developing world. So far, according to the American Society of International Law, 108 countries have adopted arbitration legislation.5 And as of 2012, 147 countries have signed the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"), which was adopted in 1958.6