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What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
Under Article 31 of the International Arbitration Law, an award must be made in writing, signed at least by a majority of the tribunal, and state the date and place and the reasons for the award.
Institutional rules may provide further details as to the form and content of an award.
Under the International Arbitration Law, an award need not be reviewed by any body other than the tribunal. The award should be translated into Russian before submission for recognition or enforcement by a Russian court.
Timeframe for delivery
Are there any time limits on delivery of the award?
The International Arbitration Law sets no timeframe for delivery of the award. Certain institutional rules may address this issue. For example, under the International Commercial Arbitration Court (ICAC) Rules, the tribunal must complete the arbitration proceedings within 180 days of the date of its composition. The ICAC Presidium may, and routinely does, extend this deadline.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
There are no express limits on the remedies available. However, various practical considerations require a cautious approach towards the use of certain remedies. For example, parties are normally cautious about requesting specific performance because of the difficulty of enforcement. Tribunals are also cautious about excessive damages that may be characterised as punitive, since such awards may be held to be against Russian public policy.
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
Russian courts are entitled to grant interim measures in aid of any arbitration proceeding, whether in or outside Russia, including those that have not yet commenced or where the tribunal has not yet been constituted. Parties can request any measure that they believe will achieve their legitimate aims. Notably, however, Russian courts are conservative in granting interim measures.
Russian courts will not enforce a tribunal’s interim orders tribunals. The parties must thus submit all relevant documents to the court for an independent decision on the need for interim measures. Such proceedings are generally public.
Can interest be awarded?
Russian procedural law does not vest arbitrators with the authority to award interest. Such entitlement may derive from an agreement (applicable arbitral rules) or from applicable substantive law.
At what rate?
If Russian substantive law applies, then interest may be awarded at a rate equal to the average interest rate for short-term deposits in the respective currency of the creditor’s place of residence. Commercial parties may agree on compound interest.
Is the award final and binding?
An award which terminates the arbitration proceedings is assumed to be final. The tribunal may designate its other rulings as final, but the Russian courts may reject this designation and refuse enforcement of interim awards.
The International Arbitration Law does not provide specific procedures for the award to become binding; mere issue of the award by the tribunal is sufficient. However, the law does not restrict the parties from specifying extra conditions for the award to enter into force.
What if there are any mistakes?
The award may be corrected or interpreted on the request of a party or at the tribunal’s own initiative. The procedure for doing so is set out in Article 33 of the International Arbitration Law.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
Article 34(1) of the International Arbitration Law (as amended) empowers the parties to an arbitration administered by an arbitral institution to waive (by express agreement) the right to challenge the award in court. An arbitration agreement establishing that the award is final will be treated as an express waiver.
What is the procedure for challenging awards?
Article 34 of the International Arbitration Law provides that recourse to a court against an arbitral award is possible only through an application to set aside the award; no appeal or other means of recourse is allowed.
An application to set aside an award may be made to a court of first instance by a party to the proceedings or by an interested third party within three months of the date on which the applicant received (or learned of) the award. The judgment of the court of first instance may then be appealed. A court may suspend proceedings to set aside an award for no longer than three months and allow the tribunal to resume the arbitration proceedings and eliminate the grounds for setting aside of the award.
On what grounds can parties appeal an award?
The grounds to set aside an award, as stipulated in Article 34(2) of the International Arbitration Law, reflect the grounds stipulated in Article V of the New York Convention (except for Article V(1)(e)).
What steps can be taken to enforce the award if there is a failure to comply?
An application for enforcement of an award may be filed with a Russian state court. Russian state courts will generally enforce an international award if:
- it was issued either in Russia or in any other state that is party to the New York Convention; and
- it meets the requirements for enforcement under the New York Convention.
The application must be filed within the statutory deadline (three years after the award was issued).
Russian state courts may also enforce an international award issued in a state which is not party to the New York Convention, provided that the state in which the award was issued would provide reciprocal treatment to awards made in Russia.
If an arbitration award is enforced by a Russian state court, compliance with the award may be then compelled through Russian bailiffs.
Declaratory awards that do not require enforcement are recognised automatically, unless an interested party petitions a court to refuse recognition within a month of the party becoming aware of the award. The grounds for refusing recognition are the same as those stipulated in Article V of the New York Convention in this regard.
Can awards be enforced in local courts?
Yes – both domestic and international arbitral awards may be enforced in Russian state courts.
How enforceable is the award internationally?
Russian international arbitral awards are enforceable in other New York Convention member states and some countries that are not members to the Convention but have executed other international treaties with Russia affording recognition to the arbitral awards (e.g., Iraq, Yemen).
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
Sovereign jurisdictional immunity may be waived by an express and unambiguous stipulation; an arbitration agreement signed by a state entity may qualify as such a stipulation. Immunity against execution may also be waived; however, a separate, express and unambiguous stipulation is required for this.
Article 6(2) of the recently adopted 2015 Federal Law on Jurisdictional Immunities of a Foreign State and Property of a Foreign State provides that by concluding an arbitration agreement, a foreign state waives its jurisdictional immunity in relation to this dispute. Article 6(6) clarifies that such a waiver does not constitute a waiver of immunity from interim measures or execution. Article 15(3) denies immunity from execution to state property used for non-sovereign purposes.
Are there any other bases on which an award may be challenged, and if so, by what?
The enforcement of awards may be refused based only on an exhaustive list of grounds which are stipulated in Article V of the New York Convention. Historically, Russian courts tended to apply the public policy exception broadly. However, after the Supreme Arbitrazh (Commercial) Court issued guidelines to restrict the application of the public policy exception in 2013, the number of cases in which the public policy exception is applied has declined.
How enforceable are foreign arbitral awards in your jurisdiction?
By operation of the New York Convention and Article 36 of the International Arbitration Law, international arbitral awards – whether issued in Russia or in any other New York Convention member state – may be enforced in Russia by the Russian courts. Russia is a party to a number of other international treaties that provide for the mutual recognition of arbitral awards with countries that are not members to the New York Convention (eg, Iraq and Yemen).
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
Under Article V(1)(e) of the New York Convention, Russian courts may refuse to enforce an award that has been set aside in the country of origin. Article IX of the European Convention of 1961 further provides that Article V(1)(e) of the New York Convention may be invoked only if the award has been set aside in the country of origin based on grounds which are stipulated in Articles V(1)(a) to (d) of the New York Convention.
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