Arbitration Agreement

The dispute can be referred to ICAC if arbitration agreement is concluded. Arbitration agreement can be included in the contract as a separate term or can be an individual agreement. It can be concluded at any time, for example for resolution of existing dispute.

Specification of the order of proceedings is of special importance when foreign economic contracts are made and executed.
As practice shows, this is often a neglected matter in foreign trade and other foreign economic activities. The reason is that, during contract negotiations, the parties are primarily concerned about agreeing on material terms (contract subject, price, term, etc.) and often do not pay enough attention to the dispute resolution procedure. Each party expects its counterpart to discharge its obligations under the contract in good faith. This is not always the case. When a party makes sure that its rights have been violated, the question arises as to the method of remedy, venue of action, and claims.

For the consequences of the lack of an arbitration agreement, see the section Advantages of ICAC.

The ICAC Rules recommend the following wording for the arbitration clause (here you may download it's translation to other languages):

“Any dispute, controversy or claim which may arise out of or in connection with the present contract (agreement) or the execution, breach, termination or invalidity thereof, shall be settled by the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation in accordance with its Rules”.

International agreement or national legislation of the majority of states usually provides that state court is to leave without consideration statement of claim if arbitration agreement is concluded.

State courts leave the claim without consideration in Russia if:
а) petition was made not later than the first declaration on the dispute was;
b) there is no foundation to find out that the agreement is "invalid, has no power or unenforceable"
(para 3 of art. II Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in New York in 1958, p.2 art.8 Law of the Russian Federation “On International Commercial Arbitration”, enacted on July 7, 1993, p. 8 art. 148 Arbitration Code of Practice of Russia).

There are two main principles of arbitration agreement established by art. 16 of the Law of the Russian Federation “On International Commercial Arbitration”: “jurisdiction- jurisdiction” and “the autonomy of arbitration agreement”.
The first principle means the right of the Arbitral Board (after the suit and in the course of proceedings) to decide the question of its own jurisdiction without opinion of the state court, that exercises only the “subsequent control” with regard to such a decision within the limits set by the law and in accordance with the procedure at the appropriate stages referring to setting aside/execution of the arbitral award.

The second one means that the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as independent agreement of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.