Conflicts inevitably arise between participants in economic activity. Even if the subjects tried to ensure proper fulfillment of obligations, it is likely that someone will violate the agreed conditions. In such cases, the participant in respect of which the obligation has not been fulfilled has the right to demand adequate compensation. If the conflict occurred on the domestic market, then it can be resolved using legal mechanisms provided for by state legislation. The situation is somewhat different in the foreign market.
International economic relations are rapidly developing in an unstable and vast space. There is currently no permanent international court, no international procedure for the settlement of commercial disputes. There are no generally accepted norms of economic law. The normative regulation of international trade activity is carried out by several conventions, which are not ratified by all states and can be applied only in certain areas of the world economy. In such circumstances, the parties to the dispute may resort to such a legal institution as international commercial arbitration. This body is formed by the will of the parties to remove the dispute that arose between them from the competence of the national court of both general and special jurisdiction. Let us further consider the features of this institution.
The concept of international commercial arbitration
It is primarily used to refer to a dispute resolution mechanism. Secondly, the concept of international commercial arbitration is used as the name of the body (organization) formed to consider economic disputes. In addition, the term refers to the specific composition of the arbitrators who are considering a particular dispute.
It should be noted that the concept of "international" has a very conditional character. The fact is that such arbitration is created or established in accordance with the rules of national law. They regulate the activities of international commercial arbitration.
This institution must be distinguished from the mechanism for the settlement of economic disputes arising between states, provided for by international law. We are talking about disputes considered in the framework of the International Court of Justice of the United Nations, etc. Unlike mechanisms that deal with interstate disputes, international commercial arbitration is an institution that serves to resolve economic private legal disputes (between private individuals - legal and physical).
Specificity
By its nature, international commercial arbitration is a national legal mechanism, as disputes between legal entities and individuals relate to domestic jurisdiction. The term “international” refers exclusively to the nature of the dispute. The competence of international commercial arbitration includes the settlement of disputes arising in the framework of foreign economic activity.
Normative base
The legal regulation of international commercial arbitration in Russia is carried out mainly by the provisions of the Federal Law No. 5338-1. In addition, there are other regulations governing its work.
I must say that international commercial arbitration is not the only mechanism used in considering international private law disputes. Such conflicts can be dealt with within the framework of the state arbitration court system. Of course, this is allowed if national legislation provides for this. For example, in Soviet times, state arbitration was not vested with the right to consider international economic disputes. They could resolve cases arising solely from economic relations between socialist enterprises. Today the situation has changed.
On the basis of the agro-industrial complex of 1995, arbitration could consider not only domestic disputes, but also cases in which foreign organizations, enterprises with foreign investments, foreign citizens and international organizations participate. This approach has been preserved in the new Code of 2002.
In addition, international economic disputes can be resolved by national arbitration courts. The Provisional Regulation on the activities of such instances, approved by the Resolution of the Supreme Court of 1992, provided for the possibility of referring disputes subordinate to national arbitration to the arbitration court. There was a special disclaimer in this regulation. If there is an agreement between the parties, a dispute may be submitted to the arbitration court in which one of the participants is located in another state or is an organization with foreign investment.
In Federal Law No. 102 there is no direct reference to the competence of arbitration courts to hear international economic disputes. But, based on the content of this normative act, this authority is assumed. First of all, any dispute arising from civil legal relations can be referred to this authority. In addition, giving the national arbitration tribunals certain procedural rights when considering disputes, the law limits the scope of their jurisdiction. Among them are international economic disputes.
National courts of general jurisdiction can also consider cases arising from foreign economic activity, in accordance with the rules on jurisdiction enshrined in the laws of the state to which the lawsuit is filed, or in accordance with international agreements involving this country. Meanwhile, as practice shows, the parties give preference to international commercial arbitration. When resolving disputes in this instance, participants do not have to follow a strictly regulated national order regarding the jurisdiction of a particular court, the applicable rules and procedures of the proceedings.
Institute Benefits
Dispute resolution by international commercial arbitration is carried out according to a special procedure. It has several advantages in comparison with the judicial. First of all, it should be noted that the activities of international commercial arbitration are very democratic in nature. This body acts as a public entity, not included in the system of administrative, judicial or other state bodies.
The parties to the dispute can influence all stages of the proceedings. According to the Law of the Russian Federation "On International Commercial Arbitration", a prerequisite for filing a claim is the consent of the parties. Participants have the right to choose arbitrators, entrust the conduct of the case to a specific person (it is not necessary at all that he be a lawyer, the main thing is that he knows the specifics of the corresponding economic sphere). The parties are given the opportunity to determine the place and language of the proceedings, the review procedure itself (partially or fully). In addition, participants can withdraw a dispute from the legal field and resolve it on an equitable basis.
Procedural moments
The Law of the Russian Federation "On International Commercial Arbitration" describes the process of considering cases quite simply. A key advantage is the lack of strict regulation of numerous legal norms and conventions. International commercial arbitration in this regard resolves cases as soon as possible.
Substantive cases are usually held in closed meetings. This ensures the confidentiality of information provided by the parties to the dispute. The laws of most states do not allow the publication of decisions of international commercial arbitration. Persons authorized to resolve a dispute must maintain confidentiality of information about it.
The main principle of arbitration is the finality of the decision. It is mandatory for participants, not subject to change and revision. The possibility of compulsory execution of decisions of international commercial arbitration is provided additionally by a huge number of interstate agreements on mutual recognition and implementation of decisions of foreign arbitrations.
In the Guidelines on Arbitration, the International Chamber of Commerce notes that this institution acts as a means of resolving disputes using the procedure agreed by the parties to the agreement. The arbitral award is binding on the participants, has the force of law and can be carried out in a manner similar to that provided for the execution of court orders.
Nuances
By virtue of the Law on International Commercial Arbitration, this body is not included in the state judicial system and does not depend on it. The appeal of the subjects to this instance or the existence of an agreement on this excludes the jurisdiction of the court. This means that even if one of the parties nevertheless appeals to the court, it should, at the request of the second participant or on its own initiative, refuse to accept the claim or terminate the proceedings that have begun. State bodies have no right to interfere in the work of arbitration.
Meanwhile, the institution is not isolated from the national judicial system. In any case, 2 procedural actions may be performed by the authorities. The first is the implementation of coercive measures aimed at enforcing a claim. Typically, the arbitration tribunal can independently take them if there is a request. However, if the interested participant makes a similar request to the court, then it will not be regarded as not corresponding to its authority.
The second action concerns the execution of the decision. If the parties do not execute it voluntarily, then only the national court has the authority to initiate the enforcement process. In cases stipulated by law regarding violations of procedural rules, the national court may reverse the decision at the request of one of the parties to the dispute.
Types of international commercial arbitration
In practice, one-time institutional arbitration operates. The latter is permanent. It is formed at the national chambers of commerce, associations, exchanges, societies, unions and other organizations, which are also functionally international. In the structure of institutional arbitration there is a permanent body that does not participate in the consideration of cases. He performs control, administrative and technical, advisory tasks. His work is governed by a special provision. The standing body draws up lists of arbitrators. In addition, he is responsible for drafting regulations governing the rules of doing business.
The second type of international commercial arbitration - one-time (ad hoc) - is formed for the trial of a specific case. After a decision is made on the merits, his work ceases. The parties to the dispute choose the venue of the meeting, determine the procedure for the election of arbitrators and the conduct of the hearing. At the same time, the parties enjoy almost unlimited independence. They are entitled to agree in detail on all the stages of the procedure, to be guided by the rules of any existing institutional arbitration. In addition, they may agree to use a model regulation approved by intergovernmental organizations specifically for ad hoc.
Today, the number of permanent international arbitrations is growing. Currently, more than a hundred of such organs are working in the world. The most famous are the ICC Arbitration Court in Paris, the London International Arbitration Court, the Arbitration Institute at the Stockholm Chamber of Commerce, etc. The Maritime Arbitration Commission and the International Commercial Arbitration Court operate in Russia.
The problem of unification of rules
The increasing role of arbitration in international economic disputes, significant discrepancies between the norms of national law governing such proceedings, cause the need for streamlining and achieving uniformity in procedural issues. As a result, the importance of international law in the field of ensuring the normal operation of the institution is growing.
The role of international legal norms in resolving economic disputes arising from foreign trade and other economic activities is manifested in several directions. The unification of procedural provisions is necessary to ensure uniformity in the process of commercial litigation in arbitration instances of different countries. A regulatory framework is needed for the recognition and enforcement of decisions made in one state in the territory of others. The creation and implementation of a legal framework for the work of specialized international institutions authorized to consider economic disputes of a certain type is required.
1961 Convention
The unification of rules is an urgent problem for the international community. Several regulations have been issued in this area. They have a specific content, legal force and method of application. Many of these acts have been issued within the UN. First of all, it is worth noting the Convention governing the work of foreign trade arbitration of 1961. This regulatory act went beyond the regional framework due to the accession of non-European countries. The Russian Federation has been a party to the Convention since 1962.
This normative document establishes the procedure for creating arbitration, the rules of proceedings, making decisions, the conditions and consequences of their invalidity. The Convention applies to both one-time and institutional arbitration if the parties are located in different countries.
The regulatory act enshrines a number of important rules:
- In the proceedings of the dispute, not only citizens of the state in which the case is being considered may act as arbitrators, but also foreigners.
- Legal entities that are subject to public law in accordance with national law are entitled to submit disputes to arbitration.
- The parties have unlimited independence in choosing the law used. If the participants were unable to determine which rules will be applied, the arbitration tribunal elects them in accordance with the conflict of laws provisions, which, in his opinion, are applicable in a particular case.
- The arbitrators, by agreement between themselves, may make a decision as "friendly intermediaries."
For all the significance of the provisions enshrined in the Convention, it has not been widely adopted in practice. Moreover, many European countries have not joined it. Of course, the Convention cannot be perceived as a kind of international arbitration code. Nevertheless, it contributes to the effective work of the institute.
Model law
Not all countries of the world seek to bind themselves with international obligations. This is confirmed by the history of the Convention, which was mentioned above. However, the activities of commercial arbitration should in any case be subject to some rules. In 1985, the UNCITRAL Model Law was approved. This is not an international treaty and, accordingly, is not endowed with a binding force. However, this law plays a significant role in the unification of the arbitration procedure.
The drafters of the act assumed that uniformity would be achieved through the adoption of domestic rules based on uniform rules formulated in the Model Law and recognized by the international community. Many countries have put in place the necessary legal documents, including the Russian Federation and Eastern European countries.
UNCITRAL Regulation
This document is most widely used in practice. The rules for the establishment of arbitration and the settlement of disputes are enshrined in it in such a way that, if there is an agreement between the parties to transfer the dispute to a one-time arbitration, the proceedings will necessarily take place.
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In the Rules, procedural issues regarding the language and place of the proceedings, the rules for filing a lawsuit, objections to it, providing evidence, the order of hearing the case, and also making decisions are quite flexible. The multivariance provided for in this act ensures a quick and effective hearing.