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7.4.1 General Provisions

The tradition of resolving disputes involving foreign litigants in international commer- cial arbitration courts in the Russian Federation dates back to Soviet times. In many respects this is due to the fact that the recognition and enforcement of foreign arbitral awards in the Soviet Union was much hampered, and indeed Soviet court judgments encountered similar difficulties abroad, due to the fact that there were no agreements entered into with a number of states on the reciprocal recognition and enforcement of arbitral awards. To a certain extent the situation has, as of yet, not changed, for example in Russian-German relations.

However, the situation is different in the sphere of International Commercial Arbitra- tion. The United Nations Convention “On the Recognition and Enforcement of Foreign Arbitral Awards” was drafted and adopted in 1958. To date, more than 120 coun- tries have acceded to this convention, including member countries of the European Union and the CIS states. This indirectly offers evidence of the practical efficiency of the Convention. The Russian Federation (USSR) has been a party to the Convention since 1960.

There is a general trend towards enlarging the scope of the application of non-govern- mental arbitration procedures both in international and domestic disputes.

Among the non-governmental arbitration courts continuously operating on the ter- ritory of the Russian Federation, the following are worthy of note as regards their significance and the number of disputes resolved:

The International Commercial Arbitration Court at the Chamber of Commerce and ƒ

Industry of the Russian Federation (Moscow),

The Arbitration Courts at the Chambers of Commerce and Industry in Moscow, ƒ

St. Petersburg, Nizhny Novgorod, Novosibirsk, Yekaterinburg, and a number of other large economic centers in the Russian Federation.

The resolution of disputes between German and Russian parties is traditionally re- ferred to the Arbitration Institute of the Stockholm Chamber of Commerce (Sweden) (SCC Institute), the Arbitration Institute of Germany (DIS), or the International Arbitra- tion Court of the International Chamber of Commerce in Paris.

7.4.2 Separate Categories of Disputes Considered

by Non-Governmental Arbitration Courts

Arbitration proceedings generally apply to civil and business legal relations.

With regard to business activities, arbitration agreements/clauses are most often in- serted in trade agreements, in particular, in sale and purchase agreements, supply agreements, contracts of carriage, etc.

In addition, non-governmental arbitration courts, in general, may resolve collective labor disputes. Using this option, employers and employees can settle conflict situa- tions on a more equal basis.

7.4.3 Legislation on Non-Governmental Arbitration Courts

in the Russian Federation

As a result of judicial reform, the statutory acts governing the procedural rules in non-governmental arbitration courts, and the procedure for recognizing and enforcing judgments, were thoroughly updated by 2003.

In addition to the Federal Law ”On Non-Governmental Arbitration Courts in the Rus- sian Federation” and the Russian Federation Law ”On International Commercial Ar- bitration,” regulating clauses are also provided for in the Arbitral Procedural Code of the Russian Federation (Chapters 30, 31) and in the new Civil Procedural Code of the Russian Federation (Chapters 45, 46, and 47).

7.4.4 Preconditions for Commencing Non-Governmental

Arbitration Proceedings

The most important condition for transferring a dispute to an international commercial arbitration court, or to a domestic non-governmental arbitration court, is the condition that the parties to the dispute have entered into an arbitration agreement (arbitra- tion clause). Such an agreement (clause) may specify a particular non-governmental arbitration court, the scope of its competence in adjudication, the applicable law, the language to be used in the proceedings, and the place of arbitration.

7.4.5 Advantages of Resolving Disputes in Non-Governmental

Arbitration Courts

A number of advantages of non-governmental arbitration court proceedings, in com- parison to state court proceedings, may be mentioned. Some of these advantages include:

The parties’ independent appointment of the arbitrator. In appointing the arbitra- ƒ

tor, the parties have the opportunity to pay due attention to all the particularities of the dispute, and to appoint an arbitrator of appropriate experience and expertise. Relative simplicity of the proceedings. The rules of non-governmental arbitration ƒ

procedure are only roughly outlined, thus providing the parties and the court with the opportunity to conduct the arbitration proceedings in an individual manner. Final and binding effect of arbitral awards. According to the general rule, no ap- ƒ

peals are permitted with respect to rendered arbitral awards. Arbitral awards are binding on the parties involved in the non-governmental arbitration proceedings. Enforceability of international commercial arbitration courts’ awards in the major- ƒ

ity of countries. (This advantage is due to the wide range of countries participating in the United Nations Convention “On the Recognition and Enforcement of For- eign Arbitral Awards” of 1958.

Confidentiality of arbitration court proceedings. ƒ

Most disputing parties opt for non-governmental arbitration courts in particular due to their high degree of confidentiality of information, as the disclosure of such infor- mation in the context of an open trial in a state court can damage a disputing party’s financial standing and reputation.