Russian Parliament passes Bill on arbitration at first reading

The Russian Parliament has passed the Bill “On Arbitration” and “On the amendments to certain legislative acts” at the first reading.

Maxim Kulkov (Managing Partner) and Elena Zaltser (Associate), KK&P

On 1 July 2015, the State Duma (the lower house of the Russian Parliament) passed the Bill “On Arbitration” and “On the amendments to certain legislative acts” (Arbitration Bill) at the first reading. However, the State Duma Committee on Civil, Criminal, Commercial and Procedural Legislation (Committee) has indicated that some changes are necessary.

The government of the Russian Federation introduced the Arbitration Bill into the Russian Parliament in May 2015 (see Legal update, Russian government introduces new Bill on arbitration (www.practicallaw.com/96136106).

The Committee has now set out its opinion on the required changes to the Arbitration Bill. For instance, the Committee pointed out the difficulties in deciding which provisions are applicable to foreign arbitration centres (for example, it is not clear whether the procedural requirements for arbitration centres to obtain permits apply to foreign arbitration centres).

The Committee also considers that the provisions regarding civil liability of arbitrators need to be improved. It argues that, even if an arbitrator is immune from civil liability, except in criminal cases, he should still have to repay his fees where he has refused to perform his duties as an arbitrator.

Regarding the Arbitration Bill on amendments to certain legislative acts, in particular, to the Law on International Commercial Arbitration, the Committee noted that the new definition of an arbitrable dispute under that Law is too broad (it applies to disputes where a substantive part of the obligations between the parties are to be performed outside the Russian Federation). The Committee considered that this definition leaves too much room for interpretation.

Overall, the Committee’s changes are fairly minor and the main framework of the Arbitration Bill remains the same. However, the correction process may lead to a delay in the adoption of the Arbitration Bill as a law and, therefore, it may come into force later than originally anticipated (which was 1 September 2015).

This article has previously been published by Practical Law Arbitration on 15 July 2015