Rules of Procedure for Russia's International Commercial Arbitration Court (ICAC) come into force on May 1, 1995. The rules replace those adopted in 1988. Together with the 1993 Law on International Commercial Arbitration, the Rules signal the Russian Federation's desire to establish an infrastructure for the resolution of disputes with foreign traders and investors.

Rules receive favorable reaction

Published reactions to the rules from foreign observers suggest that some foreign enterprises may now agree to arbitration in Moscow whereas in the past they would have insisted on arbitration in Stockholm.

The new rules contain few surprises. On several important points, they incorporate provisions from the 1993 Law and the "statute" of the ICAC annexed to that Law. The law follows closely the 1985 UNCITRAL Model Law and the rules are consistent with UNCITRAL Rules.

Following the lead of the 1993 Law, the rules confirm that the parties may choose non-Russians arbitrators and conduct proceedings in a language other than Russian with appropriate translation services. They also assure the parties that a choice of a foreign law will be recognized by the arbitrators.

ICAC hears commercial disputes

Parties may refer to the ICAC "disputes arising from contractual and other civil-law relations in foreign-trade and other types of economic relationships, where any of the parties has its place of business abroad, and also disputes between enterprises with foreign investments and international associations and organizations founded on RF territory, disputes between their participants, and disputes with other subjects of RF law."

The rules do introduce some changes and innovations to the repealed 1988 rules. Fees are also changed. The latter are set out in an appendix to the rules.

A list of arbitrators is approved by the Chamber of Commerce and Industry of the Russian Federation. Parties are, however, free to appoint as arbitrators persons who are not on the list. Arbitrators are, in any event, to be persons who have special knowledge about internationalcommercial arbitration. They are to be independent of the person who appoints them and they are to be free of all other conflicts of interest. Challenges to arbitrators may now be made on much broader grounds than previously. A newly-created presidium also has the power to remove any arbitrator who is incapacitated or who has unjustifiably delayed a proceeding.

Counterclaims must now be submitted promptly and are limited to counterclaims arising from the same transaction as the principal claim.

Preliminary relief may be granted both before and after the arbitration tribunal is appointed. Once constituted, the tribunal itself may order preliminary relief. Before then, however, the chairman of the ICAC is authorized to determine "the form of security for a claim." This, it has been suggested, allows the chairman to order not only the posting of security bond, but also a wide variety of interim security measures, including injunctions and the attachment of property.

Formation of ICAC Presidium

The rules create a presidium comprised not only of the Court's chairman and his deputies but also three representatives of persons on the Court's list of arbitrators. The presidium is charged with supervising the administration of the rules, studying arbitration practices, and educating the public about arbitration proceedings. As noted above, among the specific powers of the presidium is the power to remove arbitrators.

Recommended arbitration clause

A note to the ICAC rules recommends that parties to foreign economic contracts include the following clause in their agreement:

Any dispute, controversy or claim which may arise out of or in connection with the present contract, or the execution, breach, termination or invalidity thereof, shall be settled by the International Commercial Arbitration Court of the Chamber of Commerce and Industry of the Russian Federation in accordance with its Rules.

Further information

An English translation of the 1995 ICAC Rules is printed in Arbitration International, vol. 11, pp. 198-217 (1995).

At the August 1995 meeting of the A.B.A. there will be a presidential showcase program reviewing litigation and arbitration in Russia. The published papers for the program will include translations of the 1993 Law and the 1995 rules. There will also be an analysis of the rules by Olga Nikolaevna Zimnekova and Alla Kazakina.