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Stockholm Arbitration Report (SAR)

Preview Page SAR 2003 - 2

SUBJECT-MATTERS:
(1) Dissolution of a joint venture - the relevance of mandatory rules according to Russian law.
(2) Whether the arbitral tribunal went beyond the scope of the arbitration clause.

FINDINGS:
(1) The arbitral tribunal decided on the termination of the joint venture agreement in accordance with Swedish law. However, questions relating to the reorganisation of joint ventures are governed by mandatory rules of Russian legislation. Thus, the participants in the joint venture have the right to decide questions relating to the reorganisation of the legal entity they have created on the basis of the rules and procedures of Russian legislation.
(2) As the issue of the termination of the joint venture agreement was incapable of being considered by application of foreign law, and since the arbitral award related not only to the relations between the participants in the joint venture but also to the status of joint venture created by the parties, the award falls outside the scope of the arbitration clause.

PARTIES:
Claimant: Pressindustria S.p.A. (Italy)
Respondent: Tobolsk Petrochemical Combine (Russia)