The Federal Law “On Arbitration in the Russian Federation” N 382-FL and The Federal Law “On Changes to Certain Laws of the Russian Federation” N 409-FL came into force on 1 September 2016.
Some of the main changes brought by the new laws are briefly discussed below.
The new laws sharply distinguish between institutional and ad hoc arbitration, with a clear preference for the former. This can be explained by the authorities’ suspicious attitude towards ad hoc arbitrations, primarily due to the fact that in the past many arbitration proceedings were organised by affiliate members of companies involved in a dispute, jeopardising the fundamental tenets of independence and impartiality. A new regime was therefore necessary to make Russian arbitration more legitimate and trustworthy.
Furthermore, the new laws clarify the instances in which parties can seek assistance from state courts. According to the new rules, state courts have rights to appoint arbitrators (when parties fail to do so) and consider challenges to arbitrators. Also, parties may agree that an arbitral award is final and cannot be challenged. On top of that, an arbitral tribunal may make an application for assistance in obtaining evidence from the state court (solely in relation to documents or physical evidence).
Moreover, all existing permanent arbitral institutions must be approved by the Russian government through a licensing procedure. The exception is made only for International Commercial Arbitration Court (ICAC) and the Maritime Arbitration Commission (MAC) of Russian Chamber of Commerce and Industry. Foreign arbitral institutions are also obliged to obtain permission for administrating arbitrations in Russia, because otherwise, such arbitrations will be considered as ad hoc arbitrations with the related limits. This represents a significant disadvantage and illustrates the selective attitude of Russian legislators.
To conclude, the reform represents a positive development and shows efforts to make Russian arbitration law and procedure more compliant with the UNCITRAL Model law. However, the negative aspect concerning the undermining of ad hoc arbitrations and introducing a licensing procedure for all permanent arbitral centres outweighs the advantages of the new reform. Such controversial requirements may limit the attractiveness of Russia as a seat for international arbitration.