ARBITRABILITY OF CORPORATE DISPUTES UNDER RUSSIAN LAW – STILL UNCERTAIN?
Pursuant to the Commercial Procedure Code of Russia (CPC), any dispute can be referred to arbitration unless otherwise provided by a federal law. Section 33 of the CPC provides for a ‘special’ jurisdiction of commercial courts over what is defined in the CPC as ‘corporate disputes’. The CPC sets out in Section 225.1 a non-exhaustive list of corporate disputes that cannot be settled by other courts or arbitration and, among others, includes disputes relating to “title to shares and interests in share capital of commercial entities, partnerships and co-operatives, disputes relating to the encumbrances over the shares (interests) and the exercise of the respective rights”. Aside from these provisions, there is nothing in Russian law that explicitly prevents corporate disputes from being settled by arbitration.
In 2011-12, the Russian Supreme Commercial Court had to consider whether a case should be settled by arbitration in the context of a dispute between Mr Maximov (Maximov) and Novolipetsky Steel Mill (NLMK). This case arose out of a share purchase agreement (SPA) relating to the payment of approximately $300m for the sale of Maximov’s shares in a major Russian metal company. When the tribunal issued an award in favour of Maximov, NLMK applied to the Russian courts seeking to set aside the award. The courts found that the dispute should not have been arbitrated because the case concerned title to the shares, issues of corporate governance and a share capital increase. The Supreme Commercial Court upheld the judgments of the lower courts.
Jan-Mar 2015 issue
Freshfields Bruckhaus Deringer LLP