About the Arbitration Court, EDS and International Jurisdiction

Denial of responsibility.

The article was written by a non-lawyer for non-lawyers. Some formulations and concepts are simplified and inaccurate, however, this is not false. The article contains a certain amount of legal information, terms and nuances, as a result of which it can be difficult to read. If you are allergic to products containing jurisprudence - use the article carefully, at your own peril and risk.

Good afternoon!

Now we are working closely on the introduction of EDS for participants of our service. We plan to attract foreign firms. In the course of work with the “legal component”, they were horrified by the picture when two representatives of the parties came to court with a flash drive, handed it to the judge and said, “here are all the documents, and now judge us, your honor”. And then we came across, no less, an alternative to the state judicial system. We are immediately sharing this wonderful discovery with you. So…

What is an arbitration court?

Justice in civil cases in the Russian Federation is carried out by resolution and consideration of cases by courts established in accordance with the federal constitutional law “On the Judicial System of the Russian Federation”. These are state courts of general jurisdiction and arbitration courts. Their activities are regulated by procedural legislation.

But, as it turned out, Russian law allows for the existence of other legal mechanisms for resolving civil disputes. We are talking about arbitration courts, which are created in accordance with the law of the Russian Federation “On international commercial arbitration” (1993) and the federal law “On arbitration courts in the Russian Federation” (2002).

The arbitration court is a non-governmental organization and its activities are regulated by the above laws and the rules of the court itself. In other words, the operating procedure of the courts is not unified, each court has its own and the court itself establishes the operating procedure (it is also the regulation). However, there are general recommendations that are followed most of the courts, and there are mandatory requirements. The rules affect the procedure for conducting a court. Further, we will focus on the general and most common properties of arbitration courts, without “configurations for a specific user”.

It is necessary to stipulate arbitration jurisdiction in advance . For this, an arbitration clause is included in the contract. She states that the parties agreed to be sued by the arbitral tribunal.

Who are the judges?

The composition of the court is formed as a result of the election of one judge from each of the parties to the dispute. The two arbitrators so elected shall coordinate the candidacy of the third judge, the chairman of the court. The dispute is considered collectively, the decision is made by a majority of the judges included in the arbitration. Most courts regulate the mandatory presence of judges in legal education, although the law does not require this.
Such judges, as a rule, are very competent in the matter under consideration and are quite well aware of the details of what is happening. In addition, the procedure for attracting experts in such a court is fast and adequate.
The plus is that in matters, for example, related to IT, the court does not look at the sides with glassy eyes, but immediately goes to business.

Recognition and enforcement of decisions.

According to a good English manner, the decision of the arbitration court must be executed by the parties independently. If, horrifiedly, this did not happen, the competent state court of the Russian Federation (arbitration or general jurisdiction), at the request of the party in whose favor the decision was made, issues a writ of execution for a compulsory execution of the arbitration court decision within one month.

At the same time, the competent state court does not have the right to review the case, evaluate the evidence and otherwise interfere with the substance of the dispute considered by the arbitration court.
The basis for refusal to issue a writ of execution or annulment of the arbitration court decision can only be an exhaustive list of circumstances (Articles 233, 239 of the Arbitration Procedure Code of the Russian Federation and Articles 421, 426 of the Civil Procedure Code of the Russian Federation), these circumstances:

- if the arbitration agreement is invalid;
- if the arbitral tribunal violated the party’s right to judicial protection (the party was not notified of the election of an arbitrator, the time and place of the hearing, etc.);
- the dispute considered by the arbitral tribunal cannot be the subject of arbitration (for example, disputes from public legal relations) or the composition of the court or the dispute resolution procedure did not comply with the agreement of the parties or the law;
- The decision of the arbitral tribunal violates the fundamental principles of law.

Such circumstances are rare and indicate the lack of professionalism of the arbitration court.

Now the fun part. Recognition and enforcement of decisions of Russian state courts in the territory of another state is possible only in cases where this state has an appropriate legal assistance agreement with the Russian Federation. Today, Russia has such agreements, for example, with the CIS countries and the Baltic countries, Albania, Algeria, Vietnam, India, Iran, Yemen, Tunisia and several other countries. However, the Russian Federation still does not have similar agreements with countries of the world such as the United States of America, Great Britain, France, Germany, Japan, Sweden, or Finland.
This state of affairs means that most countries of Western Europe and America do not allow legalization of judicial acts adopted by the courts included in the judicial system of the Russian Federation on their territory, which somewhat complicates the development of economic relations.

At the same time, the Russian Federation (as the assignee of the USSR), together with more than one hundred and thirty states of the world, ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter - the 1958 Convention). In accordance with the current Russian legislation and subject to the relevant provisions in the rules, the arbitral tribunal considering a dispute in which at least one party is a foreign entity acts according to the rules established for international commercial arbitration. If the parties to the arbitration proceedings are business entities or citizens of different countries and these countries have ratified the New York Convention, then the decision of the arbitration court,

Thus, on the territory of most developed countries, decisions of state courts of the Russian Federation do not have any legal force, but at the same time they are subject to recognition and enforcement of a decision of an arbitration court located in the Russian Federation.

Either he stole, or he was stolen.

In contrast to the consideration of disputes in state courts, where publicity is the main principle of legal proceedings, the arbitration court acts on the basis of full confidentiality of the dispute. This principle applies both to any information communicated to the court by the parties, and to the very fact of appeal to the arbitration court with a claim.

Speed.

Due to:

- multiple lesser workload of judges and the availability of more time for preparation and trial;
- the absence of such a procedural form as a “preliminary meeting”;
- a wider range of methods for notifying and notifying parties;
- In general, less conservative rules for the consideration of a dispute as compared with more strictly regulated and sometimes overly formalized procedural laws;
- competence of judges in the issue under consideration;

Arbitration courts amazingly often fall within the time limits for consideration of a case established by the rules. Usually it is 1-2 months. Let’s add another month to receive the sheet, as a result of 2-3 months and the sheet from you.

So, it was basically the positive part of the description, now let's move on to the negative.

Price.

The amount of the arbitration fee shall be considered tentatively, by a general method, from the amount of the dispute. The plaintiff pays, as usual, reimburses - the guilty one. But if the cost of services of state courts asymptotically tends to zero, then the amount of the fee can be quite large. Moreover, the smaller the amount of the dispute, the greater the relative value of the collection.

Dark stories.

In the 90s and beyond, the arbitration court mechanism was actively used by well-known citizens for all kinds of unseemly events, such as the decision of the insiders, scammers, nagibalovs and a whole host of concepts denoting the profile non-physical effect on the object. The situation was similar with banks, but if dubious banks have been selected licenses at the moment, then the courts haven’t (because of the complete absence of them). So, if you decide to use the services of the arbitration court - choose carefully.

Epilogue.

It will be fair to say that the system of arbitration courts is not without flaws and requires a very responsible approach. We do not offer a panacea, but only hope that we talked about another tool, which in some cases can be extremely useful.

PS
Many thanks to Wife Bogomolov and his organization for an intelligible explanation of the incomprehensible.