On 18 June 2019, the Council for the Development of the Arbitration Process of the Ministry of Justice of the Russian Federation recommended granting VIAC the status of a PAI (“permanent arbitration institution”) under Russia’s Federal Law on Arbitration dated 29 December 2015. As of 11 July 2019, VIAC is now officially included in the list of foreign arbitral institutions recognized as a PAI (as per order No. 845-r issued on 4 July 2019). We are the first European arbitral institution to have received a government permit. This registration is crucial in order to ensure enforcement of VIAC awards also in the future in the Russian Federation.
Besides VIAC, only HKIAC has yet obtained a permit as foreign arbitral institution in April 2019. The Russian Arbitration Law requires all arbitral institutions to obtain a Russian government permit.
VIAC’s PAI status has significant consequences under Russian law. First, it means that VIAC is authorised to administer certain types of Russian disputes that other institutions are not; namely, certain Russian corporate and procurement disputes. VIAC may also administer certain Russian domestic disputes. Second, parties to VIAC-administered arbitrations seated in Russia may (i) benefit from Russian court assistance in obtaining evidence; and (ii) exclude certain aspects of court oversight; options that are not available if the arbitration is administered by an international arbitral institution without PAI status. For international arbitrations seated in Russia, VIAC administration ensures compliance with Russian law for the enforceability and validity of the award.
Recognising that users would benefit from clarification in respect of some areas of Russian law, on 10 February 2020, VIAC and HKIAC submitted a Joint Request for Certain Clarifications to the Russian Ministry of Justice and Council for the Development of Arbitration at the Russian Ministry of Justice (Council) (Joint Request, available here). The Joint Request sought clarifications in respect of issues concerning: (i) corporate disputes; (ii) procurement disputes; (iii) domestic disputes; (iv) the differences between arbitrations administered by a PAI and ad hoc proceedings; and (v) the consequences of a PAI administering an arbitration that it is not authorised to administer.
On 27 May 2020, the Council issued its response to the Joint Request (Response, available in Russian here, unofficial English translation here). It reflects the opinion of the Working Group No. 2 on Foreign Arbitral Institutions of the Council. It does not bind courts or other government bodies considering particular disputes.
Professor Anton Asoskov of Lomonosov Moscow State University, member of the Council, said: “The position of the Council is an authoritative interpretation of the law on arbitration issued within its mandate to summarise arbitration law enforcement practice. Despite its non-binding character, it will serve as a guiding tool for arbitral institutions, parties as well as arbitral tribunals in Russia-related arbitral proceedings.”
Alice Fremuth-Wolf, Secretary General of VIAC, commented: “The purpose of our Joint Request with HKIAC was to have certain issues of the Russian law and our license clarified for us as well as for other institutions considering applying for PAI status. We are more than happy that the answer of the Council came so swiftly given the difficult situation with COVID-19 in all our jurisdictions. I am convinced that this will enhance discussion and provide clarity for the legal community.”
A summary prepared by VIAC of the clarifications issued by the Council is available here.