Jurisdiction of ica.

ICA may only deal with only civil law disputes. But in 1919 in Russia arbitral tribunal could deal with some crimes (case of private accusation).

APK allows to refer the dispute arising out of civil law relations to arbitration.

First of all, currently only civil law disputes may be available for resolution by voluntary arbitration.

Second, when a dispute is already in the course of consideration by state arbitration court such a disputed may be referred to voluntary arbitration by parties' agreement, but only when this dispute is in the trial court (first instance). Why so? Musin does not know. They should be granted with such possibility. But dura lex sed lex.

If, for example, cassation refers the case to new consideration to new trial court, are the parties entitled to refer the dispute to arbitration? Yes. No specific restriction is contained in procedural law.

There's a book - "Russian law in brief. Digest for foreign investors" - Kropachev & Musin.

Currently, the jurisdiction of voluntary arbitration courts is limited with civil law disputes. There are law suit proceedings, special proceedings, proceedings in cases arising out of public relations. It should be noted that as for jurisdiction of voluntary arbitration currently it only includes and limited with law suit cases.

This matter is specifically mentioned in ruling of CC 26.06.2012 (we repeated it yesterday). CC RF, inter alia, mentioned, that cases to be considered in the course of special proceedings are not available for voluntary arbitration.

Moreover, arbitration courts cannot deal with the disputes in the sphere of public law.

Example. One day, our executive secretary came to Musin and submitted a statement of clam for his review - whether the arbitration may accept this statement. Due to confidentiality of arbitral proceedings we cannot name the parties. But it doesn't matter. A claimant was federal institution located in SPb. Very authoritative institution.

This institution in its statement of claim would like to sue the Finance Minister of Russia. The amount of the statement of claim was several billions of ruble. The thing was that Ministry refused to provide money to the institution.

Voluntary arbitration may only consider a case on basis of voluntary agreement, which is attached to the statement of claim. According to that agreement both parties refer the dispute to arbitration where Musin was an arbitrator.

Musin had to decide whether this statement of claim can be accepted. Musin concluded that the dispute arose out of public relations (financial law relations). Hence, it cannot be resolved by voluntary arbitration despite arbitration agreement.

Art.4 of APK (about 'civil law relations') is a mandatory since there are no exception 'unless otherwise is agreed by parties'.

As for public law disputes the situation is quite different. According to case-law of Presidium of SCA amicable agreements are possible. At least in disputes related to taxes. In sphere of public law dispute to some extent amicable agreement is possible, but when the proceedings is in state court.

The problem is - the only civil law disputes may be referred to voluntary arbitration. Still APK provides that the exception may be provided by federal law (art.4(6) of APK). Hence, federal law may state that civil law disputes may not be referred to arbitration. For example, bunkropsy disputes may not be referred to voluntary arbitration.

Until recently there was a hot discussion related to the ruling of CC 26.05.2011. Civil law disputes may have a different character. They may be connected with movable and immovable property (real estate). In terms of the latter group of civil law disputes the complicating factor is due to the fact that origin, transfer etc. of real estate are subject of registration (right in rem - veschnoe pravo).

Certainly, a transfer of right in rem may take place on the ground of civil law contract (sale and purchase agreement and so on). But it is connected with state registration. The civil contract is certainly a kind of civil law relations. But state registration is of public nature.

Sale contract with regard to real estate object is connected with state registration of transfer of right in rem.

Disputable situation arose in judicial practice. To what extent (if any) disputes arising out of civil law contract of real estate may be referred to voluntary arbitration? And if it is referred to what extent (if any) arbitral award is binding to registering body? Courts for several years had an opinion that such disputes are not available for voluntary arbitration. The discussion was so hot that the Presidium of SCA approached a constitutional court with the request to what extent (if any) in the light of our Constitution it is possible to transfer such disputed to voluntary arbitration which do not belong to the state court system?

CC RF thoroughly and deeple researched this problem. To summarize the ruling it came to the following approach. Any contract related to transfer of right in rem is of civil law relations. CC RF distinguished the private aspects and public aspects of this situation.

The transfer of title on the basis of any civil law contract is still a matter of civil law. State registration of the tranfer of title is a matter of public law. We should distinguish disputes between the parties to the contract and disputes between the parties and registering body.

Since the tranfer of title which occur on the basis of civil law contract such a dispute is still of civil law nature and may be referred to voluntary arbitration. If a dispute arises between party to civil law contract on the one hand and the registring body on the other such a dispute cannot be referred to arbitration.

If transfer of title resulted from civil law contract and this dispute is available for resolution by arbitration and arbitration did resolve this dispute, whether the award would be binding for registering body?

CC RF stated that just an award is insufficient to register transfer of right. The award should be confirmed (recognised and enforced) by state court.

The parties of sale contract related to real estate object cannot register a transfer of right relying only on the award rendered by arbitration. There should also be a confirmation by state court.

Che-to nihera ne ponyal. Nado pochitat' to reshenie CS: nado inforsit' award ili ne nado, chtoby pravo zaregistrirovat'.

The specific rules on jurisdiction of ICA contained in UNCITRAL Model law on ICA and in Russian law on ICA. The legend of both laws is similar but not identical.

UNCITRAL Model Law - Scope of Application - Article 1 - the term 'commercial' should be given a wide interpretation covering all relationships of commercial nature, whether contractual or not. These relationships include any trade transaction on supply, exchange of goods or services, factoring, leasing, construction of works, consulting, engeneering, licencing, investment, banking, insurance, exploitation, joint venture, other forms of cooperation, carriage of goods and so on. The list is not exhaustive. It is a scope of jurisdiction of ICA as it is described in UNCITRAL Model Law.

Our law is actually just a traslation of Model Law, but in some aspects, including scope of application, the wording is slightly different. Art.1 of Russian Law on ICA provides, that upon agreement of the parties the following disputes may be referred to ICA: disputes arising out of contractual and other civil law relations, arising in the course of perfomance of foreign trade and other kinds of international economic activities, if one of entreprises of parties is located abroad, if there is a foreign investment and so on (koroche v stat'e napisano).

What are other civil law relations? E.g. tort relations. But the condition precedent to such a submission of a dispute is that at least one of the parties should have its business located abroad.

Para.2 of Art.1 is more complicated ('foreign investments, joint venture etc.'). If 2 of 3 parties of joint venture have a dispute and they are russian, is the dispute referrable to ICA?

There's no doubt that dispute with an involvment of foreign partner of joint venture may be referred to ICA. In order to submit dispute to ICA this dispute should be somehow connected with some foreign element. But this connection may have a different character. The very fact that disputing parties are russian is not sufficient that there is no foreign element. What is more, the very fact that these russians participate in joint venture shows the foreign element is present. But it is only in the case where the disputes between russians is related to their activity in joint venture. If the disputes between them is related to other civil law relations, which do not have a foreign element, then the dispute arising out of these relations cannot be referred to ICA.

So, our Law on ICA is more liberal than the Model Law.