Your Business Dispute Will Be Heard in a State Arbitrazh Court

Close-Up View of a Wooden Gavel

No one starts a business expecting to end up in court to resolve a dispute, but it is always best to be prepared for anything when you are running your own business, especially in a foreign country where you may not be familiar with the judicial system. In Russia, disputes involving commercial enterprises, legal entities, or self-employed entrepreneurs are handled in the state arbitrazh court. Even though the name sounds like the English word “arbitration,” this system is not an arbitration tribunal, but is an independent branch of the court system that deals primarily with commercial disputes.

The Origins of the Arbitrazh Court

The arbitrazh court is rooted in the old Soviet system. Under communism, there were no privately owned businesses—all enterprises were owned by the government—therefore, any disputes that arose between socialist enterprises were settled by the state arbitrazh, a government institution acting as an intermediary. After communism, this system evolved into the current arbitrazh court which follows the principles of European procedural law, but is a little less formal than courts of general jurisdiction and deals only in commercial disputes.

Levels of State Arbitrazh Courts

Arbitrazh courts differ from other courts in that they favor written documentation over hearing from witnesses or experts. Arbitrazh courts have four levels, as follows:

  • Trial court. Proceedings in the trial court begin with a statement of claim and a decision must be rendered by a judge within three months. Judgments may be appealed within one month.
  • Court of appeal. Trial court findings may be appealed due to issues of law or because of mistakes made in establishing the facts of the case. Before an appeal hearing, all parties may submit written responses to the court of appeal. Most appeals are heard within a month or two after the initial filing.
  • Court of cassation appeal. Appeals to this third-level court may only be made based on issues of law or procedure. The original decision may be upheld, reversed, or amended, or the case may be sent back for a re-trial.
  • Court of supervisory appeal (Supreme Court). The next level of appeal is a two-tier process. Before an appeal is heard, a Supreme Court judge will determine if the appeal has merit. If the case is determined to have merit, it will be heard by the Supreme Court, whose decision will be final.

As you can see, the arbitrazh court is similar to other court proceedings. The main difference is that the court deals only in commercial disputes. There is currently legislation being considered that would make the arbitrazh court a part of the courts of general jurisdiction, so changes may be ahead.

Summary Proceedings

If your business dispute is relatively small or is undisputed, you may be able to request a summary proceeding from the arbitrazh court, which is an expedited and less expensive process. The case will be decided based on written submissions with no hearing. The examination of the case is done electronically and all parties will receive an access code to review the findings. No minutes are kept and no postponements are allowed, although the findings can still be appealed with cause. This is a viable option for a minor business dispute.

Jurisdiction Over Foreign Respondents

Russian arbitrazh courts have jurisdiction over foreign respondents if the respondents’ assets are held in Russia or if they have a representative or branch office located in Russia. If the dispute arose out of actions or relationships taking place in Russia, the court also has jurisdiction. The Russian court also has jurisdiction if the dispute involves state property, trademarks registered in Russia, Russian debtors or legal entities, or a Russian state agency. Foreign respondents may also agree in writing to have their case heard by the arbitrazh court as long as the agreement does not violate the jurisdiction of a foreign court.

Jus Privatum Will Represent Your Interests in Court

Under Russian law, you have the right to be represented by an attorney in state arbitrazh court. No matter where you are in the legal process, if you don’t have an attorney, connect with our office through the link on this page to find out how we can help. Don’t go it alone in a foreign court. Contact us today.

 

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