Arbitral Tribunals for Foreign Trade in Socialist Countries

Abstract

The beginnings of commercial arbitration in the socialist commonwealth are directly connected with the early Soviet resort to private arbitration in commercial disputes with the capitalist countries.1 While the Soviet Union planned to expand its foreign trade, its judicial system was totally unfit to handle disputes where the law of the market, which the revolutionary state planned to abolish, provided the only valid standard for a decision. The Soviet Union was faced with the necessity either of reforming its laws and judicial system or resorting to some other method of dispute settlement acceptable to foreign traders who, as a matter of principle, were suspicious of the impartiality of Soviet courts. For the solution of its commercial disputes with foreign countries, Russia turned to private arbitration. At no time, however, was the Soviet counterpart of commercial arbitration as practiced in the capitalist world truly private.2 Since the early days of the Soviet state the monopoly of foreign trade had been one of the important instruments of its economic policy. Business organizations established to maintain economic relations with foreign business circles were private only in the sense that they did not aspire to the status of government agencies. While in the capitalist world commercial arbitration was the creation of private interests and business organizations, in the Soviet Union it was the creation of the state.