27 September 2013

Promoting Russia as a Seat of Arbitration:What Are the Best Ways Forward?

Peter Pettibone

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Why is the Seat Important?

• The arbitration law of the seat is the law of governing the conduct of the arbitration unless the parties have provided for another law to govern. 

• The local courts of the seat will decide on matters such as

interim measures, the taking of evidence, the appointment and removal of arbitrators, and the confirmation or vacatur of the award. 

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Why is the Seat Important? (cont’d)

• Although hearings may be held wherever the parties select, often the seat is where the hearings are held, which results in an economic benefit to the jurisdiction selected as the seat of an arbitration.  

• A recent survey of the economic impact of arbitration activities in Toronto showed that arbitration activities in Toronto contributed US$256 to its economy in 2012 and are estimated to contribute US$273 million in 2013.

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What are the Most Popular Seats for International Commercial Arbitration?

• According to recent surveys conducted in London and New York, the most commonly referred to (and used) seat is London, followed by Paris, New York, Geneva, Singapore, Stockholm, Hong Kong, Zurich, Tokyo, and Mainland China.

• Moscow did not even make the list in these surveys.

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What are the Factors Influencing the Choice of a Seat?

• The legal infrastructure of the seat, which includes

the usefulness and flexibility of the national arbitration law,

the track record of the courts of the seat in enforcing agreements to arbitrate and awards, and

the neutrality and impartiality of the seat

• The governing law of the contract

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What are the Factors Influencing the Choice of a Seat? (cont’d)

• Convenience, which includes established contacts with lawyers in the seat, the language used in the proceedings, the efficiency of court proceedings, and good transport connections, hotels, restaurants,

etc.

• Cost

• Quality of the hearing facilities, availability of translators, etc.

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Why is Russia not a Preferred Choice?

• Described in detail in the Executive Summary to the ICC Russia 2012 Survey “Russia as a Place for Arbitration.”

• The most significant negative factors are that only very few of those who responded to the survey viewed Russia, and in particular Russian courts, as being arbitration-friendly.

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What can be done to Improve Russia’s Standing?

This is the subject of this panel

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