Arbitration in Russia

The Legal Framework

The Federal Law on International Commercial Arbitration, 1993 (the "Law") and amended in 2017 governs international commercial arbitration throughout the entire territory of Russia. Manifestly, this has a unification effect and harmonizes legal practice in Russia.

Russian Law on International Commerical Arbitration (unofficial RAA English translation)

The Law is largely a mirror image of the UNCITRAL Model Law on International Commercial Arbitration (1985) and places Russia on the map of the countries with modern arbitration legislation. In addition, growth of the domestic and international arbitration cases boosted the amount of recognition and enforcement proceedings brought to the state courts. Based on the reported cases, the Supreme Arbitrazh Court (Supreme Commercial Court) outlined the non-binding guidelines for setting aside, recognition and enforcement of arbitral awards. These guidelines, discussed below, are an important legal tool for navigation within the Russian legal environment.

Russia is a party to the New York Convention and has been one of the original member states since 1958 (as USSR).


According to the Law any disputes of commercial nature involving a foreign party, as well as commercial disputes where at least one party is a Russian company with foreign investments, can be referred to international commercial arbitration. The law does not specify the required level of foreign participation in a Russian company with foreign investments for a dispute to be eligible for international arbitration. In practice, even a nominal foreign investment in a Russian company can satisfy this requirement. It is worth noting that commercial disputes arising out of insolvency, registration, reorganization and liquidation of companies, protection of business reputation and, finally, competition issues do not qualify as arbitrable disputes.

Arbitration Agreement

The Law sets out a mandatory provision as to the written form of the arbitration agreement. Exchange of letters, faxes, emails and other means also qualify as evidence of a written arbitration agreement. However, submission by the parties to a dispute of their statements of claim and response without further challenge of the jurisdiction of the arbitral tribunal may effectively evidence the existence of an agreement to arbitrate, even without any written document at hand.

There are several reported court cases analyzing existence and validity of arbitration agreements. Defects in arbitration agreements are often used as grounds for challenging arbitral awards in the state courts. Among the most frequently used arguments are: incorrect or incomplete name of an arbitration institution; and absence of references to the exact set of procedural rules of an institution (arbitration or conciliation). Apparently, these basics should be carefully considered when drafting an arbitration agreement.

The courts recently held that reference should be made to a particular arbitral institution and not just its rules. Therefore, a careful drafting of international arbitration clauses is imperative in Russia as is true for many other jurisdictions.

Arbitration and Arbitrazh

There is a clear understanding in Russia that arbitration is a separate apparatus from the state courts system as it stems from the parties’ decision to submit their disputes to a private dispute resolution mechanism. In Russia though, arbitration should not be confused with “arbitrazh” courts. As a matter of tradition deriving from the Soviet period, the state courts dealing with commercial disputes are called “Arbitrazh Courts”. Arbitrazh courts fall within the state judicial system and have little to do with arbitration, other than being authorized to set aside or recognize and enforce arbitral awards. Despite the fact that “arbitration” and “arbitrazh” bear a phonetic resemble to each other, they are two separate and independent systems of dispute resolution. An arbitral tribunal, in practice, is often referred as “treteyskiy sud” meaning private self-regulating dispute resolution mechanism.

Enforcement of Foreign Arbitral Awards

The legal basis for enforcement of foreign arbitral awards in Russia is the NY Convention. The USSR took a very active role in the drafting of the convention and had already ratified it by 1960. However, there was not a single reported instance of court enforcement of foreign arbitral awards under the NY Convention in Russia until 1992. It could be due to the fact that the parties were state enterprises and were bound to voluntarily comply with the arbitral awards.

Nowadays, Russian courts consider 50-70 applications to gain recognition and enforcement of foreign arbitral awards under the NY Convention annually. Presumably, the rest of the awards are complied with voluntarily. When handling a situation of enforcement of a foreign arbitral award in Russia, one must contemplate an assistance of experienced local counsel at the very outset of the proceedings because this situation requires a diligent approach and knowledge of all formal and procedural requirements of the state courts.