THE ARBITRABILITY OF CORPORATE DISPUTES IN THE RUSSIAN FEDERATION
The question of the arbitrability of corporate disputes in the Russian Federation is not new but is still much debated. For many years, the debate revolved around the proper interpretation of Section 33 of Arbitrazh Code of Procedure (ACP) which dealt with the competence of the state courts to adjudicate certain categories of dispute. The previous version of Article 225.1 of the ACP did not define ‘corporate disputes’, and did not specifically prohibit the arbitration of corporate matters. This ambiguity allowed the Supreme Court of the Russian Federation to adopt a strict interpretation of Article 225.1 of the ACP, with the result that corporate disputes were considered to be non-arbitrable.
Following the entry into force of a new arbitration regime on 1 September 2016, the Russian legislator clarified the categories of dispute that qualify as ‘corporate disputes’ and allowed certain categories of corporate dispute to be referred to arbitration as of 1 February 2017. However, the new legislation requires that the relevant arbitration agreement be concluded after 1 February 2017, and that the seat of arbitration for certain categories of corporate dispute be in the Russian Federation. This concerns also foreign parties that conclude corporate transactions containing arbitration agreements with Russian entities, because those disputes cannot be arbitrated outside the Russian Federation.
Although this arbitration regime still imposes strict limitations, the Russian legislator continued its general liberalisation of arbitration law late last year when it amended Article 225.1 of the ACP to broaden the categories of corporate dispute that are arbitrable.
Apr-Jun 2019 issue
Freshfields Bruckhaus Deringer LLP