The Creation of the Russian Arbitration Association - Czech and Central European Yearbook of Arbitration - Independence and Impartiality of Arbitrators - 2014

Author(s):

Vladimir Khvalei

Page Count:

6 pages

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Published:

February, 2014

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I. Why Was It Needed?

According to the study of the ICC National Committee in Russia (ICC Russia),

which was conducted in 2011-2012 (the Study),1 Russia is quite unpopular as a

place for arbitrating disputes. Thus, even when such disputes have a connection

with Russia, the parties prefer them to be resolved in other jurisdictions that

have a reputation for being ‘arbitration-friendly’. The factors that contributed

to the negative perception of Russia as an arbitration venue included its visa

regime and a lack of proper administrative support to the peculiarities of state

courts’ case law in arbitration-related cases. There was also a clear preference

for international arbitral institutions to administer the disputes, even in cases

linked to Russia. Therefore, ICC Russia identified a need to improve the

arbitration environment in Russia, as well as to radically change the approach

employed by arbitration courts in that nation.

The main purpose behind the creation of the Russian Arbitration Association

(RAA) is the promotion of both domestic and international arbitration in the

Russian Federation and CIS countries, the popularization of Russia as a place

for arbitration, the promotion of Russian arbitrators on national and

international levels and also the promotion of foreign arbitrators interested in

arbitrations directly or indirectly linked with Russia ( specialists in Russian law,

the Russian language or Russian parties).

The establishment of an institution of this kind was needed to address the

growing concern in the professional legal community regarding arbitration in

Russia. Although there are somewhere between 500 to 2 000 arbitration

institutions in Russia, arbitration still is not really a preferred method of dispute

resolution. This is confirmed by the statistics of state arbitrazh (commercial)

courts. Thus, the number of challenges of Russian arbitral awards and

applications for enforcement submitted to state courts can be measured in the

thousands. At the same time, the number of commercial disputes examined by

Russian state courts is in the hundreds of thousands. In comparison, the

number of arbitral proceedings handled only under the rules of the American

Arbitration Association comprises hundreds of thousands per year. The fact

that state courts examine hundreds of times more commercial disputes than

arbitration courts is a substantial indication of the lack of trust felt by the

business community toward arbitration. This is caused by several factors.