ResolutionResolution ofof disputesdisputes involvinginvolving insuranceinsurance companiescompanies inin andand outsideoutside ofof RussiaRussia: :

AA comparativecomparative overviewoverview ofof thethe advantagesadvantages andand disadvantagesdisadvantages ofof variousvarious optionsoptions forfor disputedispute resolutionresolution

ResolutionResolution ofof disputesdisputes involvinginvolving insuranceinsurance companiescompanies inin andand outsideoutside ofof RussiaRussia: :

AA comparativecomparative overviewoverview ofof thethe advantagesadvantages andand disadvantagesdisadvantages ofof variousvarious optionsoptions forfor disputedispute resolutionresolution

May 29, 2005May 29, 2005

Leila LitvinovaSenior Associate, Moscow Office

Co-Chair, Russia Insurance Practice Group

RUSSIAN INSURANCE SUMMIT

Tel.: 7-095-737-5000Fax: 7-095-737-5050

INFO@LLGM.RUWWW.RUSSIANLAWS.COM

22

Legal Needs of The Russian Legal Needs of The Russian Insurance MarketInsurance MarketLegal Needs of The Russian Legal Needs of The Russian Insurance MarketInsurance Market Intensive and extensive growth of the Russian insurance

market

International nature of insurance and reinsurance industry

Partner/shareholder disputes

Disputes between various market players

Unsatisfied customers’ claims

33

I. I. OptionsOptions forfor commercialcommercial disputedispute resolutionresolution inin RussiaRussia: : statestate courtscourts, , commercialcommercial arbitrationarbitration, , ADRADR

I. I. OptionsOptions forfor commercialcommercial disputedispute resolutionresolution inin RussiaRussia: : statestate courtscourts, , commercialcommercial arbitrationarbitration, , ADRADR

44

Options for Commercial Options for Commercial Dispute ResolutionDispute ResolutionOptions for Commercial Options for Commercial Dispute ResolutionDispute Resolution

State arbitration (arbitrazh) courtsState arbitration (arbitrazh) courts

Commercial arbitrationCommercial arbitration

International ArbitrationInternational Arbitration

Domestic arbitrationDomestic arbitration

Alternative Dispute Resolution Alternative Dispute Resolution

55

II. II. ProceduralProcedural issues: issues: arbitrazharbitrazh litigation,litigation, civilcivil courtcourt litigationlitigation, , commercialcommercial arbitrationarbitration ( (internationalinternational andand domesticdomestic))

II. II. ProceduralProcedural issues: issues: arbitrazharbitrazh litigation,litigation, civilcivil courtcourt litigationlitigation, , commercialcommercial arbitrationarbitration ( (internationalinternational andand domesticdomestic))

66

Disputes: Procedural IssuesDisputes: Procedural IssuesDisputes: Procedural IssuesDisputes: Procedural Issues

Arbitrazh Litigation – Arbitration Procedure CodeArbitrazh Litigation – Arbitration Procedure Code

Civil Court Litigation – Civil Procedure CodeCivil Court Litigation – Civil Procedure Code

Limited scope for private arbitrationLimited scope for private arbitration

Mandatory Russian law rules; limited scope for choice Mandatory Russian law rules; limited scope for choice of law of law

77

III. Dispute Resolution III. Dispute Resolution Approaches, Including Approaches, Including Commercial ArbitrationCommercial Arbitration

III. Dispute Resolution III. Dispute Resolution Approaches, Including Approaches, Including Commercial ArbitrationCommercial Arbitration

88

Efforts to Resolve a DisputeEfforts to Resolve a Dispute AmicablyAmicablyEfforts to Resolve a DisputeEfforts to Resolve a Dispute AmicablyAmicably

general requirements (to undertake best or general requirements (to undertake best or reasonable efforts) reasonable efforts)

special conciliation procedure set in the contract special conciliation procedure set in the contract (parity commissions, appointment of an expert, (parity commissions, appointment of an expert, etc.) etc.)

mediation mediation

99

Practical Issues to Consider Practical Issues to Consider Practical Issues to Consider Practical Issues to Consider

costs costs

time time

enforceability of an arbitration award or enforceability of an arbitration award or court judgmentcourt judgment

enforcement of an arbitration awardenforcement of an arbitration award(additional time and expenses)(additional time and expenses)

1010

Speed and Complexity of Speed and Complexity of Proceedings Proceedings (alternative arbitration proceedings)(alternative arbitration proceedings)

Speed and Complexity of Speed and Complexity of Proceedings Proceedings (alternative arbitration proceedings)(alternative arbitration proceedings)

small claims procedure small claims procedure

Fast, low cost procedureFast, low cost procedure

full-scale arbitration processfull-scale arbitration process

1111

Interpretation of a Dispute Interpretation of a Dispute Resolution ClauseResolution ClauseInterpretation of a Dispute Interpretation of a Dispute Resolution ClauseResolution Clause

if an arbitration clause (or agreement) is if an arbitration clause (or agreement) is absent (litigation or arbitration) absent (litigation or arbitration)

if an arbitration clause or agreement is if an arbitration clause or agreement is invalid invalid

if an arbitration clause is vague (any need to if an arbitration clause is vague (any need to argue over jurisdiction?) argue over jurisdiction?)

place of dispute proceedings place of dispute proceedings

1212

Specifics of Arbitration Specifics of Arbitration Clause ApplicationClause Application Specifics of Arbitration Specifics of Arbitration Clause ApplicationClause Application

exclusive language and permissive languageexclusive language and permissive language

the possibility of a multiparty disputethe possibility of a multiparty dispute

potential/necessary intervention of local courts potential/necessary intervention of local courts (statutory requirements, interim relief, etc.) (statutory requirements, interim relief, etc.)

no incorrect reference to arbitration rulesno incorrect reference to arbitration rules

1313

The Significance of The Significance of International TreatiesInternational TreatiesThe Significance of The Significance of International TreatiesInternational Treaties

several alternatives given to the parties in an several alternatives given to the parties in an arbitration clause arbitration clause

applicability of international treatiesapplicability of international treaties

the law that determines the legal authority of the law that determines the legal authority of the parties the parties

1414

IV. Scope of Dispute IV. Scope of Dispute Resolution Resolution IV. Scope of Dispute IV. Scope of Dispute Resolution Resolution

1515

Issues to Be ResolvedIssues to Be Resolved Issues to Be ResolvedIssues to Be Resolved

keeping the arbitration clause as broad as keeping the arbitration clause as broad as possible (excluding for matters that cannot be possible (excluding for matters that cannot be submitted to arbitration) submitted to arbitration)

the jurisdictionthe jurisdiction

the law regulating procedure for the arbitration the law regulating procedure for the arbitration

if there is a conflict between applicable if there is a conflict between applicable substantive laws, the law under which said substantive laws, the law under which said conflict is to be resolvedconflict is to be resolved

1616

all pre-arbitration efforts have been all pre-arbitration efforts have been exhaustedexhausted

all commercial issues have been considered all commercial issues have been considered

a full legal review has been completeda full legal review has been completed

When to Commence Litigation/ When to Commence Litigation/ Arbitration Arbitration When to Commence Litigation/ When to Commence Litigation/ Arbitration Arbitration

1717

Amicable settlements (reasons for success)Amicable settlements (reasons for success)

International International vsvs Domestic Domestic

  Russian courts: practice in the making Russian courts: practice in the making

Survey and analysis of current Survey and analysis of current dispute resolution trends in dispute resolution trends in Russia Russia

Survey and analysis of current Survey and analysis of current dispute resolution trends in dispute resolution trends in Russia Russia

1818

Court Practice – Also Consider:Court Practice – Also Consider:Court Practice – Also Consider:Court Practice – Also Consider:

Specifics of Russian Court Practice Specifics of Russian Court Practice

Fighting corruption at all levels Fighting corruption at all levels

Litigation as a “negotiation” tool: greenmailLitigation as a “negotiation” tool: greenmail

Security measures: how they can be abused Security measures: how they can be abused

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