An Introduction to Dispute resolution, Russia

In Russia, commercial disputes can be taken to state courts or arbitration tribunals.

State commercial courts resolve the overwhelming majority of commercial disputes. These courts are referred to in Russian as ‘arbitrazh’ courts, but the name is purely historical and does not have any relation to an arbitration procedure as it's understood in the West. Also, a smaller number of cases are resolved in the state courts of general jurisdiction. It is usually the case when one of the parties is an individual who is not engaged in a business activity.

There is no mandatory pre-court procedure the parties have to undergo in Russia before going to court, unless such clause is included in a contract. There is no requirement to undergo any other pre-trial procedure such as mediation.

Proceedings take place in a location where either the defendant or his immovable assets are based. There are first instance state commercial courts in all regions of Russia. The average time for a case to be considered in a court of first instance ranges from three to five months. Court decisions can be subsequently appealed, first to the appeal court and then to the court of cassation. This can take a further three to four months.

Especially complex or significant cases are heard by the Supreme Court of the Russian Federation, which is the highest court in Russia.

The positives of using state commercial courts include such advantages as:

• cases being considered quickly;

• specialist judges hearing particular groups of cases;

• justice is accessible at a minimal expense (the maximum state duty is USD2,500);

• the process is transparent (all information about a case and the court's procedural documents are available online).

Admittedly, the last point is not always seen as a positive given that it makes the dispute public knowledge.

This is one of the reasons parties take their cases to arbitration tribunals. Still, Russian arbitration tribunals handle a relatively small number of cases, mainly because of the uncertainty created by the ongoing reform of rules and procedures relating to such tribunals. Moreover, the law expressly stipulates that certain categories of disputes, such as corporate disputes involving Russian entities, may not be heard by arbitration tribunals. The most popular and respected arbitration tribunals are the International Commercial Arbitration Court at the Russian Federation Chamber of Commerce and Industry and the Maritime Arbitration Commission at the Russian Federation Chamber of Commerce and Industry.

Russian law makes no special provisions or requirements regarding disputes involving foreign companies, apart from a more complex procedure for serving the initial notification of proceedings.

However, it is important to bear in mind, the requirements for documents that relate to a company's status (being included in a national trade register or similar, confirmation of the powers of its management bodies and so on). Additionally, certain rules apply to the evidence foreign companies may submit. Documents in a foreign language must be translated and certified by a notary, whilst foreign official documents must be legalised by an apostille.

Court judgments are recognised and enforced in Russia based on either a mutual legal assistance treaty or, more often, on the principle of reciprocity. However, there is generally no difficulty in having either Russian or foreign court judgment recognised and enforced in Russia.

Russia is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Thus, it is not difficult to enforce a foreign arbitral award in Russia. The overall procedure for having an arbitral award recognised and enforced takes from three to four months.

We believe the most effective way of choosing the jurisdiction for a dispute is by looking at where a court decision can be enforced best. This is relevant to disputes referred to both state commercial courts and arbitration tribunals. To be guided by other factors is to risk making the process less effective and reduce the likelihood of court decisions being enforced efficiently. For instance, starting proceedings against a Russian defendant in a foreign court will substantially drag out the process. It will also be harder to obtain an interim relief and it will take time to have the decision recognised in Russia.

In some cases, this advice can be ignored. For example, when dealing with an especially complex case for which it will be difficult to assemble a panel of arbitrators with relevant experience in Russia. However, in general, the above advice should always be considered when choosing a jurisdiction.

Source - Chambers and Partners