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Limitations on Arbitrability in the Russian Federation from a Legislative and Judicial Perspective

Publication at Faculty of Law |
2019

Abstract

The vast majority of European countries impose some limits on what may be legally subject to arbitration, although the particular limitations vary significantly: some countries endorse a relatively liberal approach, whereas others are more stringent; in some countries the approach to this issue has been very stable in time, but in some others it has been the object of a recent dynamic development. This article describes and analyses the status quo of non-arbitrability rules in the Russian Federation against the backdrop of legislative and judicial developments after 1990.

The purpose is to understand the functional reasoning behind these rules and explain their development during the last 25 years. The article takes into account the new Federal Act on Arbitration, which became effective as of 1 September 2016, and examines the relevant case-law of both the Supreme Commercial Court and the Constitutional Court of the Russian Federation, including the cases Moscow Health Department v ArbatStroi (holding that government contracts have a strong public law basis, thus rendering them unfit for adjudication by private arbitral tribunals) and Aldega v Urban Settlement Krasnozavodsk (holding that disputes arising out of investment agreements with Russian authorities are not arbitrable).

As far as the subject-matter is concerned, four general areas of non-arbitrability are covered: real estate disputes, corporate disputes, disputes related to government contracts and disputes concerning public policy exceptions.