by the Arbitration Association

Why arbitration reform in Russia failed?

Сентябрь 26, 2019


Creation of a normal, world-class system of arbitration

The principal goal of the Russian arbitration reform was the establishment of a "normal, world-class system of arbitration".2

The term “world-class” should obviously be understood to refer to such centers of international arbitration as England, France, Switzerland, the USA, Germany, Sweden, Singapore and Hong Kong (the countries of the "First Group"). 

And, most likely, “world-class” should not be understood as referring to such countries as Costa Rica, Ecuador, Nicaragua, Panama, Peru, Angola, Mozambique, Zambia, Uganda, Bahrain, Ukraine, Latvia and Uzbekistan, where the government directly or indirectly controls the formation of arbitration courts3 (the countries of the "Second Group").

Unfortunately, as will be demonstrated below, the measures introduced in Russia as a result of the arbitration reform were borrowed from the practice existing not in countries of the First Group, but in those of the Second one.

Four components of the success of an arbitration venue 

Success of arbitration venue is based on four pillars:

  1. Liberal arbitration law;

  2. Arbitration-friendly judiciary;

  3. A qualified and mature arbitration community;

  4. Reliable arbitral institutions. 

Full version is available at this link.

Vladimir Khvalei1

1 The analysis presented below constitutes the author's personal point of view, not related to his activities in various companies and organizations. This article presents an updated version of the note sent to M. L. Galperin in December 2017. 

2 M. G. Galperin Presentation at Conference ICC Russia 28 November 2017: "The final result, business as a consumer of arbitration services posed the question to the government of creating in our country a normal system of arbitration on a world-class level. In turn, this assignment was put forth by the President and the Government to the Ministry of Justice." 

3 G. Zhukova Arbitration institutes: legal status, creation, binding requirements, and oversight// "Treteisky sud", № 2/3 2016, p.55-75.