International Commercial Arbitration in Russia: Results of the Reform

Abstract

September 2021 marks five years of the arbitration reform in Russia. During this period, fundamental changes have occurred in this area, affecting both arbitration institutions that are authorized to administer disputes on the territory of Russia, and the distribution of categories of arbitrable disputes between permanent arbitration institutions and arbitration tribunals created to resolve a specific dispute (ad hoc arbitration tribunals). The paper attempts to analyze the main results of the reform and assess its impact on Russia’s attractiveness as a place of arbitration. The author comes to the conclusion that, despite some positive consequences of the reform (such as "pocket" arbitration courts leaving the market, resolving the issue of arbitrability of corporate disputes, empowering state courts with the functions of promoting and monitoring the activities of arbitration courts, etc.) a number of problems remained unresolved, and the attitude towards Russia as a place of arbitration remainedalmost unchanged. Moreover, innovations that relate to the procedure for creating arbitration tribunals and obtaining the right to administer disputes on the territory of Russia and apply, among other things, to foreign arbitration institutions, have led to attempts to circumvent the requirements of Russian law both by the parties and by the arbitration institutions that failed to obtain appropriate permission. An equally important problem resulting from the reform includes leaving the market by regional arbitration courts that used to be popular among small and medium-sized businesses that are often not ready to pay rather high arbitration fees set by large arbitration centers. Thus, most of the goals set by the reform ideologists have not been achieved, which indicates the need for further improvement of legislation in this area.