Reform of arbitration in Russia successful and now in need of refining

Russia’s arbitration reform can be said to have been successful; some legislative amendments in this area are needed, but these should not be drastic. That said, however, the sector is not yet competitive when looking at the number of disputes in the state judicial system. That was the conclusion reached by those attending the Public Meeting of the Council for the Improvement of Arbitration on Efforts to Develop Domestic Arbitration, which took place as part of the St. Petersburg International Legal Forum.

KEY CONCLUSIONS

An effective arbitration system has been built in Russia, and the development of the sector merits praise

“The Federal Law on Arbitration laid the legal foundations for the establishment and running of permanent arbitration institutions in the Russian Federation. Enough time has now passed since the law was passed for us to objectively assess the results of the reform and outline pathways for the further development of the sector. <...> The legal foundation of 2015 paved the way for a robust system of permanent arbitration institutions and regional branches to be built. These bodies meet high standards of impartial and independent arbitration. While arbitration is not yet competitive when looking at the number of disputes in the state judicial system, the development of the sector merits praise,” Konstantin Chuychenko, Minister of Justice of the Russian Federation.

“A fairly effective system of arbitration institutions has been built in Russia. In addition, effective legislation on arbitration has been drawn up. However, we should remember that some problems do exist, and that the arbitration sector is finding it fairly difficult to compete with the state judicial system, which is also fairly effective,” Alexander Varvarin, State Secretary, Vice President for Legal Regulation and Administration, Russian Union of Industrialists and Entrepreneurs.

“It is the view of our colleagues that the reform of arbitration courts was very timely. <...> Efforts to create a reliable network of professional independent arbitration centres in Russia have paid off,” Alexandra Nesterenko, President, Association of Corporate Lawyers.

Drastic changes to legislation are best avoided at this stage, despite them being inevitable at some point

“There was a specific logic developed to underpin this reform which looked ahead to the next 15–20 years. So, it is our view that we do not need to make any drastic measures to legally amend these well-thought-out approaches. Let’s allow things to settle. Let’s give arbitration bodies, state courts, and businesses time to reach common ground. We will then develop experience as a result. Basically, it’s important to learn how to work together and in line with the new rules,” Alexandra Nesterenko, President, Association of Corporate Lawyers.

“In my opinion, in order for the arbitration sector to become attractive, we still need to protect the stability of this legislation. The law has turned out to be fairly successful – it works. The problems that existed before the adoption of the law have gone. Others have appeared, but I would say that they are smaller in nature,” Yulia Goryacheva, Retired judge at the Supreme Court of Arbitration of Russia.

“There is no getting away from the need to amend the legislation. Stable legislation is important, but life moves so fast, and the law needs to keep up with it,” Konstantin Chuychenko, Minister of Justice of the Russian Federation.

PROBLEMS

Uncertainty surrounding confidentiality issues and a general lack of arbitration

“Let’s consider confidentiality. Colleagues have said that confidentiality ends at the point that writs of execution are issued. However, the problem is that due to the system of legal regulation, confidentiality of arbitration is not observed. That includes at the point when disputes are directly considered at an arbitration court,” Associate Professor, Department of Civil and Administrative Litigation, Kutafin Moscow State Law University.

“Confidentiality is one of the few remaining benefits of arbitration. However, here it goes beyond just the two parties that agree to settle the dispute through arbitration,” Tatyana Andreeva, Associate Professor, Department of Civil Proceedings, Lomonosov Moscow State University; Candidate of Legal Sciences.

“There are a number of issues to do with expertise. <...> Given the enormous size of our economy’s public sector, it is open to question just how many disputes could be settled through arbitration. <...> The purview of arbitration courts when initiating bankruptcy cases also requires clarification,” Alexander Varvarin, State Secretary, Vice President for Legal Regulation and Administration, Russian Union of Industrialists and Entrepreneurs.

SOLUTIONS

Promoting the sector at universities and attracting professionals

“We need a big marketing push, and to promote arbitration and alternative ways to resolve disputes in general. <...> It is important to instil a sense of importance and significance regarding this area in the minds of future lawyers while they are still at university,” Vladimir Yarkov, Doctor of Legal Sciences, Head of the Department of Civil Proceedings, Ural State Law University.

“What are the objectives? We need to get as many competent and honest legal specialists working in the arbitration sector as possible. We need to attract symbols of the profession, former judges, academics, lawyers, and so on. <...> In order to make arbitration a popular way of resolving disputes, we need to actively promote it within the legal community. In this regard, it is important to quickly set up more moot courts and get a large number of students involved,” Alexandra Nesterenko, President, Association of Corporate Lawyers.

“We need to continue to work on improving the legislation. <...> The development of the arbitration sector cannot under any circumstances be stopped in any case,” Alexander Varvarin, State Secretary, Vice President for Legal Regulation and Administration, Russian Union of Industrialists and Entrepreneurs.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en

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