Interim Measures in Arbitration


 

The UNCITRAL Model Law on International Commercial Arbitration was updated in 2006 for the first time since 1985. Since the Russian law on international arbitration follows UNCITRAL guidance quite closely sooner or later Russia had to follow suit.

On July 22, 2011 the government sent a draft law amending the Federal Law ‘On International Commercial Arbitration’ to Parliament so that the difference between the domestic law and its international prototype remained negligible. Basically the bill seeks to incorporate articles 1(2), 2(A), 7 (Option I), 17, 17(A), 17(B), 17(C), 17(D), 17(F), 17(G), 17(J) of the model law in national legislation.

So it has been proposed to make it clear that an arbitration agreement can be made in Russia by ‘electronic communications’ such as electronic emails or electronic data interchange as well as by any other record that ‘provides fixation of the information or makes it accessible for subsequent use’. The bill excludes an arbitration agreement from the list of documents needed for recognition and enforcement of an arbitral award. This is a technicality, but a convenient one – a reminder that an agreement to arbitrate can exist in a variety of forms and does not necessarily consist of one document signed by the parties.

Yet the point of the change is to bring interim measures into the sphere of arbitration. These measures cannot be underrated since they seek to prevent the dissipation of assets and to preserve evidence during dispute settlements. Without them justice turns into a farce in which a winner achieves little more than a Pyrrhic victory.

Arbitration is by nature a contract, as are interim measures issued by a tribunal which are binding on the parties to the arbitration but not on third parties. The parties’ interests in arbitral proceedings are in the hands of state courts: ‘the commercial (arbitrazh) court at the location of the arbitration tribunal or at the location or residence of the debtor or the debtor’s property may take interim remedies upon the petition of a party in arbitral proceedings’ (article 90(3) of the Code of Procedure in Commercial Courts).

Interim relief issued by a foreign court is not, strictly speaking, enforceable in Russia. However it can be granted by a domestic court in accordance with Russian law. This was the case in Edimax Limited v Chigirinsky when the Supreme Commercial Court of Russia backed up interim measures in support of LCIA arbitration.

By and large the draft law goes along these lines. It reaffirms the availability of interim relief, including ex parte orders, in the arbitral proceedings. Yet interim measures granted by a tribunal are not binding on third parties. Nor is the interim relief automatically enforced by courts.

picture: schwiegermutter © sabine voigt - Fotolia.com

 

 

Russia changes her law on international commercial arbitration
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