6 September 2024
Trade and economic ties with the countries of the
Asia-Pacific region are rapidly growing. As a result, arbitration institutions
are gaining strategic significance across the globe. Despite sanctions, legal
disputes involving companies from unfriendly countries are continuing to be
heard, which makes it all the more important to be able to review cases
impartially. The development of commercial arbitration necessitates
strengthening international cooperation, establishing new alliances, and
developing unified principles for interaction in the legal sphere. Those were
the conclusions reached at a session entitled Development of International
Commercial Arbitration in Asia-Pacific Countries, which took place as part of
the Eastern Economic Forum (EEF).
KEY CONCLUSIONS
The International Commercial Arbitration Court (ICAC)
fulfils a vital role amid growing economic ties with Asia-Pacific nations
“We are currently witnessing a rapid
increase in economic and related interactions within the Asia-Pacific region.
International commercial arbitration is designed to ensure effective, prompt,
and independent dispute resolution, which makes it a key tool in this region.
The ICAC and the MAC [Maritime Arbitration Commission – ed.] at the
Chamber of Commerce and Industry of the Russian Federation are endeavouring to
contribute to this process,” Alexey Kostin, Chairman, The International
Commercial Arbitration Court at the Chamber of Commerce and Industry of the
Russian Federation.
“In July, we signed a cooperation agreement
with the International Commercial Arbitration Court of Russia. This is a
well-known organization in Russia, which has been operating for a long time. We
therefore hope that this agreement paves the way for a lasting partnership with
this prestigious organization. Alongside the agreement with Russia, we also
signed similar agreements with Vietnam and Malaysia. These agreements aim to
foster collaboration in arbitration cases involving businesses in the
Asia-Pacific region,” Hemant Gupta, Chairman, Indian International Arbitration
Center.
“We are handling more disputes than leading
European arbitration institutions such as the London or Stockholm arbitration
centres. Each year, we handle both international and domestic corporate
disputes. And over recent years, despite the challenging situation, the number
of international cases has been growing,” Dmitriy Podshibyakin, Director,
Arbitration and Mediation Center of the Chamber of Commerce and Industry of the
Russian Federation.
“A number of studies have been conducted on
international dispute resolution, and the volume of such disputes is rising. It
is essential to make international courts more efficient,” Prashant Kumar,
President, The Bar Association of India.
Despite the sanctions, Russian
jurisdiction plays a key role
“The ICAC handles both small cases [where
amount being claimed is – ed.] under USD 10,000, and large cases in
excess of USD 10 million. Of course, most of the disputes we see involve
Russian companies, which generally specify in their contracts that Russian
jurisdiction and law shall be applied. However, we also have cases where
contracts directly reference the laws of other countries, such as the UK and
Belarus recently, as well as Kazakhstan, Germany, Estonia, Mongolia, and
Georgia,” Dmitriy Podshibyakin, Director, Arbitration and Mediation Center of
the Chamber of Commerce and Industry of the Russian Federation.
“We have 10 members in the ICAC presidium,
two of whom are foreign arbitrators – one from Germany, and one from the United
States. We also have two foreign arbitrators in the committee that appoints
arbitrators – one from Germany, and one from the Czech Republic. Despite the
ongoing upheavals surrounding our country, they continue to work – none have
resigned,” Sergey Katyrin, President, Chamber of
Commerce and Industry of the Russian Federation.
“We are observing increased interest in
maritime law in Russia. There are a few obvious reasons for this, but those
aside, I think this trend is down to the fact that maritime law is
predominantly private, and private law has significantly evolved in Russia in
recent decades. This is due to there being a strong interest in and study of
foreign experience, as well as an understanding of the nuances of Russian
private law and the Russian legal system as a whole. It appears as though these
trends are now extending to maritime law, and we expect things to develop and
improve apace in Russia, with experience being incorporated not only from
Western countries, but Eastern ones as well,” Anna
Arkhipova, Deputy Chairman, Maritime Arbitration Commission at the Chamber of
Commerce and Industry of the Russian Federation.
“We are here to foster friendly relations,
establish connections, and work together with our esteemed Russian colleagues
and friends from other countries. As for international cooperation, there is a
Russian arbitration agency that has been to Singapore. We have even
incorporated such events into our official calendar. It marked the first time a
foreign arbitration organization was included in the Singapore Centre’s
official calendar of activities,” Cunyuan Zhang, Head (China), Singapore
International Arbitration Centre.
“At our branch, the geographical aspect of
arbitration provisos [a contractual or separate
agreement made by the parties when concluding an international commercial
contract – ed.] is quite extensive. I know that companies from
these countries are using our provisos in their contracts with Russian
companies. Whereas in the early years our work primarily focused on
popularizing arbitration and raising awareness among businesses, by 2023 we
began receiving cases. To date, we have concluded four cases, three of which
were international commercial disputes,” Natalia Prisekina, Executive
Secretary, Branch of the International Commercial Arbitration Court at the
Chamber of Commerce and Industry of the Russian Federation in Vladivostok.
PROBLEMS
The resolution of disputes involving
Russian companies in unfriendly jurisdictions
“We are paying a high price today. That is
because issues concerning large Russian companies and their assets are very often
being resolved not by Russian courts or arbitration bodies, but in the courts
and arbitration bodies of unfriendly countries. This gives rise to significant
challenges in terms of access to justice. <…> We are also facing
difficulties in finding suitable experts who can put forward a position and
offer their insight. The same is true of legal professionals and lawyers who
can represent our interests. That is because although there is no formal
prohibition on handling disputes with companies under sanctions, with SWIFT
being disconnected, it has become very difficult to make payments. Many legal
professionals refuse to take cases – they fear for their reputation, because
they are subject to external pressure and cancel culture. <…> I believe
that for several years to come, we will continue to see key disputes over
assets taking place in unfriendly jurisdictions. It is for this reason that we
greatly welcome the development of ties with alternative forms and arbitration
bodies,” Igor Krasnov, Chief Lawyer, Head of Legal Unit, VEB.RF.
“The failure to fulfil obligations is the
result of sanctions. This is mainly about the financial sector. Payments cannot
be made because banks refuse to process the transactions or are under sanctions
themselves. Alternatively, an organization may refrain from fulfilling their
obligations due to the threat of secondary sanctions. Sanctions are often cited
as force majeure, though this claim is not always upheld when cases are
considered,” Dmitriy Podshibyakin, Director, Arbitration and Mediation Center of
the Chamber of Commerce and Industry of the Russian Federation.
A shortage of neutral arbitrators
“When organizations lodge a case in neutral
jurisdictions, costs can escalate, and difficulties can occur. If a case is
heard in a foreign jurisdiction, the cost may be 80% higher than in a home
jurisdiction. Neutral arbitrators exist, but they can come at a premium. There
is a monopoly on handling international disputes, and international courts can
be overloaded. If we endeavour to increase the number of international
arbitration organizations, we need local expertise and must engage local
companies and experts. This practice will continue to expand,” Prashant Kumar,
President, The Bar Association of India.
SOLUTIONS
Fostering cooperation between arbitration institutions
and the expansion of maritime law
“The new era requires us to set new objectives.
Proactive international cooperation in the business sphere means getting
arbitration institutions to work together actively, and not just bilaterally,
as has traditionally been the case. The time has come to think about how to
establish multilateral cooperation in this area,” Alexey Kostin, Chairman, The
International Commercial Arbitration Court at the Chamber of Commerce and
Industry of the Russian Federation.
“We propose establishing a centre for
resolving maritime disputes. <…> I would like to suggest that the
international community consider India as the location for an arbitration court
specializing in maritime, arbitration, and commercial disputes. We are looking
to establish such a centre in Mumbai,” Hemant Gupta, Chairman, Indian International
Arbitration Center.
“Some time ago, a branch of the
International Commercial Arbitration Court opened in Vladivostok, and, I should
say, it has been remarkably successful. The branch is already operating
successfully and boasts partnerships on the international stage. Today, I
should announce another important event. The upcoming meeting of the maritime
arbitration commission presidium is set to discuss and decide on the opening of
a branch of the maritime arbitration commission in Vladivostok. This would make
it the second branch of its kind, with the first located in St. Petersburg,”
Alexey Kostin, Chairman, The International Commercial Arbitration Court at the
Chamber of Commerce and Industry of the Russian Federation.
“We would like to invite various
organizations from the BRICS countries to join us in the creation of a network
of affiliated arbitration organizations, which will carry out their duties in
line with their workload. This will expand the pool of arbitration experts,
create a unified set of rules, and help determine arbitration costs. In doing
so, we will bridge the gap between different arbitration markets and raise the
availability of local expertise. We will work to develop this further,”
Prashant Kumar, President, The Bar Association of India.
* This is a translation of material that was
originally generated in Russian using artificial intelligence.
For more information, visit the Roscongress
Foundation’s Information and Analytical System at roscongress.org/en