Lecture 2.

Disadvantages of voluntary arbitration are related to the fact that arbitration is a private institution. It is based entirely on the agreement of the parties to the dispute. When the dispute is resolved the problem of its execution arises. If the dispute is resolved by the state court there will be no problem to enforce the decision of the state court committed by FSSP. But FSSP services are only available when you enforce state court decision.

Bailiff service of enforcement of arbitral award will only act on the basis of some ruling of the state form. It is impossible to enforce foreign arbitral award w/out certain assistance provided by the state court.

Therefore, some interconnection, some cooperation between voluntary forms on the one hand and state courts on the other is inevitable, and it is somehow regulated.

State court judgment may be enforced with the assistance of bailiff services. But arbitral proceedings does not provide the litigants with such a possibility without the assistance of state courts.

Since we have touched the cooperation of arbitral tribunal and state court we should also not that this cooperation is not limited with only the sphere of enforcement.

It becomes reasonable and even necessary to take some interim security measures when you resolve the dispute in state courts. Otherwise it may create a problem to enforce the judgment. State courts do have a possibility upon the litigants' motion to take some interim security measure.

The question is - whether an arbitral tribunal is entitled upon the litigants' motion to take any security measures? Yes, it is. But due to the voluntary nature of arbitral tribunal the tribunal may only request to do so. But there is no possibility to make litigant to follow this requirement. State court may render some assistance in taking interim security measures.

Furthermore, there is a problem of submission and disclosure of evidence in arbitration. GPK and APK provide a power to court to require evidence by any person. But court is an agency of public power. The situation with arbitral tribunal is completely different. It may only request litigants and other persons to provide evidence. Unfortunately, arbitral tribunal has no authority to bind the parties to provide such evidence. State court may assist upon litigants' or tribunal's motion and issue an order to provide relevant evidence. This order will be binding for everyone.

State court is entitled to some extent to check arbitral award. State court is not entitled to review the arbitral award on its matters. But court is under statutory obligation to check whether some requirement contained in the exhaustive list are complied with. If not then enforcement of award may be refused.

To that extent state court enjoys some controlling fuctions on arbitral tribunal.

Voluntary arbitration exists in two possible organisational forms. There are institutional arbitration, i.e. arbitrations which are created as permanent institutions (Maritime Arbitration Comission, ICAC of CCI, Voluntary arbitration court of SPb CCI). There are also ad hoc arbitration form. Ad hoc means 'na odin raz'. They are created to resolve specific dispute.

Both kinds of arbitration are admitted by norms of international law as well as by norms of national law.

We need to mention the most important international and national rules regulating arbitral proceedings.

First of all, New York Convention on the recognition and enforcement of foreign arbitral awards (1958). The number of its participants amounts more than 100 countries including Russia.

Art.1 of New York Convention - Convention shall apply to recognition and enforcement of awards in other country than the country where the award was sought. Party to arbitration proceedings may be both natural persons and legal entities. Furthermore, basically the parties whose dispute is subject of this Convention should be located in different states. Still it shall also apply to awards not considered as domestic awards. What does it mean?

We should look to our APK. It has a special chapter 13 - Proceedings in cases of challenging of arbitral awards. This chapter provides, inter alia, as follows. Art. 230 - Rules established in this paragraph shall apply in challenging of awards of voluntary arbitrations and international commecial arbitration, which awards are issued in the territory of Russia.

So, regardless of the fact that ICAC and MAC are situated in Russia, according to Art.230 the awards of these institutions should be deemed as awards to which New York Convention should be applied.

The term "arbitral awards" should include not only awards issued by ad hoc tribunals but also by permanent arbitral institutions - New York Convention provides this rule.

This Convention also contains some rules concerning the procedure and the reasons on which arbitral award may be enforced or not to be enforced.

There is also European Convention on international commercial arbitration (1961). The number of this Convention is much less than New York Convention. 26 countries are participants of this Convention, including Russia and Cuba.

This Convention contains rules concerning form of arbitral agreement as well as some rules identical to New York Convention (rules on enforcement).

Agreement on procedure of dispute resolution related to forms of business activity (Kyiv, 1992). It regulates activity of both state courts and international arbitrations. To some extent it simplifies the proceedings of enforcement of awards among litigants situated in these countries (Russia, Belarus etc.).

UNCITRAL Model Law on international commercial arbitration. It was adopted by United Nations Commission on International Trade Law. It is a model law which means that its norms are recommended for different states to adopt. These norms are not mandatory.

Each state has a discretion either to adopt this law or not to adopt it. Russia adopted the law which is almost completely a translation of this Model Law. Why 'almost'? Some Model law rules have a discretional character. States may change them.

There are two versions of Model Law - original (1985) and amended (2006). Russian law is entirely based on original version. Why we refrained to amend our law after the issue of amended version? It will be explained further.

There are 1996 English arbitration act, 1999 Swedish arbitration act, 1925 US arbitration law, 1995 Chinese arbitration law, Special chapter designated specifical to arbitral proceeding of Swiss civil procedural code 2012.

Each permanent arbitration institution has its own rules. For instance, as for ICAC has its own 2006 rules. There are also 2010 LCIA Rules, SCC (Stocholm) Rules etc.

Few words about literature. There are some textbooks on ICA. Korabel'nikov Boris Romanovich - barrister, arbitrator - Textbook on ICA 2012. Very interesting book. Skvortsov Oleg Yurievich - 2004 Resolution of commercial disputed in arbitral institution in Russia. Skvortsov and Musin's textbook on ICA 2013.

The very presence of arbitral agreement is binding for state court which is obligated in the presence of this agreement to leave the claim w/out considetation. That's why arbitration have some public functions.