Latvia - National Report - World Arbitration Reporter (WAR) - 2nd Edition

Gaļina Žukova is an Attorney at White & Case LLP, Paris, as well as Associate Professor at the Riga Graduate School of Law (Latvia). Formerly, she was Counsel at the Secretariat of the ICC International Court of Arbitration (Paris), where she was leading Central and Eastern Europe case management team. Her academic credentials include LL.B (University of Latvia), LL.M (University of Exeter), and Ph.D. (European University Institute in Florence). Dr. Žukova has particular experience in international trade and dispute resolution and is the author of several publications on these subjects.

Inga Kačevska is an Attorney at Law at the Law Office of Inga Kačevska and Assistant Professor at the University of Latvia. Dr. Kačevska holds LL.B (University of Latvia), LL.M (Chicago Kent College of Law), Master of Orientalistics (University of Latvia), and Ph.D. (University of Latvia). Dr. Kačevska is a leading and reputable practitioner in the field of commercial litigation and arbitration with particular strength in international dispute resolution and application of international private law. She is the author of various publications and is regularly appointed as an arbitrator in international and national cases. She is a member of Chartered Institute of Arbitrators.

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Originally from World Arbitration Reporter (WAR) - 2nd Edition

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I. INTRODUCTION: ARBITRATION IN LATVIA — HISTORY AND INFRASTRUCTURE

A. History and Current Legislation on Arbitration

1. Historical evolution of law relating to arbitration

Latvia de facto declared itself an independent state on 18 November 1918 and was recognized de jure by the international community in 1921. In 1940, Latvia was incorporated into the Soviet Union, only to regain its independence in 1991. In 2004 Latvia joined NATO and the European Union.

Until 1940, the Russian Civil Procedure Law of 1864 as amended and modified during 1920 – 1940 governed domestic arbitrations in Latvia. During those years, two permanent arbitration institutes were established—one at the Latvian Chamber of Commerce and Industry, and another at the Latvian Craftsmen Chamber. There is no data on whether any international arbitration cases were heard during this time.

During the Soviet period, all commercial disputes were settled by the State Arbitration Court or by the courts of general jurisdiction. Indeed, there were no permanent arbitration institutions in Latvia where domestic and international commercial disputes could be settled.

In 1991, Latvia’s independence was restored, which triggered a number of changes in the field of arbitration. Firstly, in 1992 Latvia signed and ratified the New York Convention. Secondly, in the same year the first permanent arbitration institution was established for the settlement of both domestic and international disputes when the Latvian Chamber of Commerce and Industry approved the Statute of the Arbitration Court. Despite the availability of an arbitral institution, for a while the courts of general jurisdiction were the only available forum for resolving commercial disputes. However, the courts turned out to be quite inefficient in dealing with the ever-growing number of commercial disputes. Their caseload increased dramatically due to a burgeoning number of cases and the lengthy amount of time the courts took to issue rulings on the merits. The momentum for an alternative procedure of commercial dispute settlement was evident.

Table of Contents:

I. INTRODUCTION: ARBITRATION IN LATVIA- HISTORY AND INFRASTRUCTURE A. History and Current Legislation on Arbitration 1. Historical evolution of law relating to arbitration 2. Current law a) Domestic arbitration law b) International arbitration law 3. Law reform projects 4. Confidentiality and publication of awards a) Privacy of proceedings b) Publication of awards B. Arbitration Infrastructure and Practice in Latvia 1. Major arbitration institutions 2. Number of cases and other statistics 3. Development of arbitration compared with litigation II. CURRENT LAW AND PRACTICE A. Arbitration Agreement 1. Types of validity of agreement a) Clauses and submission agreements b) Minimum essential content c) Form requirements d) Incorporation by reference e) Interpretation 2. Enforcing arbitration agreements a) Declaratory actions in court b) Applications to compel or stay arbitration c) Anti-suit and other injunctions 3. Effects on third parties a) Extension of the agreement over third parties 4. Termination and breach B. Doctrine of Separability 1. Statutory provisions 2. Practice and case law C. Jurisdiction 1. Which forum decides jurisdiction 2. Prima facie determination 3. Competence-competence 4. Interaction of national courts and tribunals D. Arbitrability 1. Notion and functions of arbitrability 2. Applicable law 3. Subjective arbitrability a) Natural persons b) Legal persons c) States and state entities 4. Objective arbitrability a) Examples of restrictions to objective arbitrability at law E. Arbitral Tribunal 1. Status and qualifications of arbitrators a) Number of arbitrators b) Legal status c) Qualifications and accreditation requirements d) Arbitrators’ rights and duties e) Relevant codes of ethics 2. Appointment of arbitrators a) Methods of appointment b) Appointing authorities c) Payment agreements d) Resignation and its consequences 3. Challenge and removal a) Grounds for challenge b) Procedure for challenge c) Removal procedure d) Replacement of arbitrators 4. Arbitrator liability immunity F. Conducting the Arbitration 1. Law governing procedure a) Determination of law and rules governing procedure b) Notion and role of seat of arbitration c) Methods for selection of seat absent part choice d) Mandatory rules of procedure 2. Conduct of arbitration a) Basic procedural principles b) Party autonomy and arbitrators’ power to determine procedure c) Style and characteristics of the oral hearing d) Documents only arbitrations e) Submissions and notifications f) Deadlines, and methods for their extension g) Legal representation h) Default proceedings 3. Taking of evidence a) Admissibility b) Burden of proof c) Standards of proof d) Documentary evidence and privilege e) Production of documents f) Witnesses g) Tribunal-appointed experts h) Party-appointed experts 4. Interim measures of protection a) Jurisdiction for granting interim measures b) Types of measures c) Enforcement mechanisms 5. Interaction between national courts and arbitration tribunals a) Court assistance before the arbitration begins b) Court assistance during the arbitration c) Court assistance after arbitration 6. Multiparty, multi-action and multi-contract arbitration a) Consolidation of arbitrations b) Joinder of third parties c) Parallel and concurrent proceedings 7. Law and rules of law applicable to the merits a) Determining the applicable law and rules b) Party autonomy c) Determination by arbitrators d) Non-national substantive rules, general principles of law and transnational rules e) Mandatory rules 8. Costs a) Arbitration costs b) Legal costs c) Security for costs G. Arbitration Award 1. Types of awards 2. Form requirements a) Essential content b) Reasons c) Time limits for making award d) Notification to parties and registration 3. Remedies a) Damages b) Specific performance c) Other typical remedies d) Interest 4. Decision making a) Deliberations b) Majority or consensus? c) Dissenting and concurring opinions d) Signature 5. Settlement a) Settlement recorded in an award b) Settlement without an award c) Use of settlement techniques by arbitrators 6. Effects of award a) Effects between parties b) Effects against third parties c) Res judicata 7. Correction, supplementation, and amendment a) Correcting the award b) Additional award H. Challenge and Other Actions against the Award 1. Setting aside III. RECOGNITION AND ENFORCEMENT OF AWARDS A. Domestic Awards 1. Statutory or other regime a) Distinction between recognition and enforcement b) Grounds for refusing recognition and enforcement c) Formal requirements for enforcement of awards d) Enforcement procedure B. Foreign Awards 1. Various regulatory regimes a) Domestic rules b) New York Convention c) Other international conventions 2. Application of New York Convention by local courts a) Enforcement procedure b) Examples from practice IV. APPENDICES AND RELEVANT INSTRUMENTS A. National Legislation (See CD-ROM) B. Major Arbitration Institutions C. Cases D. Bibliography