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A.1       Legislation

International arbitration in Russia continues to be governed by the Law on International Commercial Arbitration.[1] Certain issues in relation to international commercial arbitration such as requirements for arbitral institutions administering disputes in Russia, and resolving corporate disputes, are governed by the Federal Law on Arbitration in Russia (“Domestic Arbitration Law.”)[2]

A.2       Institutions, rules and infrastructure

As of February 2022, there are the following licensed[3] Russian arbitral institutions:[4] the ICAC[5] and the MAC at the Russian CCI,[6] Arbitration Center at the RSPP,[7] Russian Arbitration Center (RAC),[8] National Centre of Sports Arbitration at Sports Arbitration Chamber ANO,[9] Arbitral institution at the All-Russian Industrial Association of Employers’ “Russian Engineering Union” (since July 2021),[10] Arbitral Institution at the Autonomous Non-Commercial Organization “National Institute of Developing Arbitration in the fuel and energy sector” (since August 2021).[11] As regards foreign arbitral institutions, 2021 saw two more foreign arbitral institutions obtain the status of permanent arbitral institutions in Russia and thus be able to administer international arbitration proceedings seated in Russia – ICC[12] and SIAC.[13] Therefore, as of February 2022, the list of foreign licensed arbitral institutions[14] includes HKIAC, VIAC, ICC and SIAC.

The issue of enforcing awards by foreign arbitral institutions without a license, as well as other notable cases state courts’ practice on matters related to arbitration proceedings and application of foreign law, were considered in the Review of Russian case law on arbitration matters and transboundary legal proceedings, prepared by Russian Arbitration Association.[15]


B.1       Imposition of sanctions sufficient for granting anti-suit injunction against foreign proceedings (“Uraltransmash case”)”[16]

As discussed in detail in the 2020-2021 edition of Baker McKenzie International Arbitration Yearbook, in June 2020 amendments were made to the Code of Arbitrazh (Commercial) Procedure (CAP) introducing exclusive jurisdiction of Russian state commercial courts in disputes involving sanctioned entities and/or based on sanctions.[17] Where parties have a dispute resolution agreement providing for proceedings in a foreign jurisdiction, the exclusive jurisdiction under article 248.1 of CAP arises where such agreement is unenforceable due to imposition of restrictive measures by a state, a union of states or an authority of such state or union, which create obstacles to that party’s access to justice.[18] The provisions inter alia enabled a party in such a dispute to file for an anti-suit or anti-arbitration injunction precluding the other party from initiating or continuing proceedings in a foreign jurisdiction, as well as provided for penalties for failure to comply with the injunction.[19] Court practice on applying these provisions started to develop in 2020. In particular, the present case dealing with claims for an injunction and penalties was first discussed in the 2020-2021 Yearbook.[20] However, since then there have been major changes to the position of courts as to grounds for issuing the injunction. In particular, in December 2021 the Supreme Court ruled[21] that imposition of sanctions was enough to render the arbitration agreement unenforceable, whereas the previous finding of the cassation court in March 2021 had been that the claimant had to prove that sanctions created obstacles to the claimant’s access to justice and the claimant failed to discharge this burden of proof.[22] The court noted that the imposition of restrictive measures (including personal sanctions) on Russian individuals and legal entities adversely affects their reputation in the very least and thus places them into an inferior position as compared to the other individuals or entities. This is because the measures are aimed at a particular person and are public in nature, that is, are compulsory and based on the public authority. Therefore, it is reasonable to have doubts whether sanctioned individuals and entities will be granted the same level of protection as the other individuals and entities. The panel disagreed with the respondent that complying with such an injunction would have resulted in grossly violating the respondent’s right to access to courts. It reasoned that in case of an injunction the respondent would have to terminate arbitration proceedings but it was not prevented from seeking judicial relief from a Russian state court, given that in terminating the arbitration the respondent was complying with a court’s order. As regards the outcome of the case, the Supreme Court ruled that the courts had no grounds to dismiss the claimant’s claims and reversed the judgments of lower courts.[23] However, the Supreme Court did not grant the claimant’s application for the anti-arbitration injunction given that the SCC award was issued in May 2021, whereas the review by the Supreme Court took place in November and December 2021.

The Supreme Court reasoning demonstrates that Russian courts view their exclusive jurisdiction in sanctions-related disputes as a means to ensure that the targets of sanctions are not infringed in their rights to access to justice. Parties to contracts with sanctioned Russian legal entities or individuals as well as their affiliates that are covered by sanctions need to be aware that any dispute resolution provisions in their contracts providing for a foreign jurisdiction or arbitration may, in certain circumstances, be found unenforceable by Russian state commercial courts upon an application by their counterparty and the dispute eventually will be resolved by Russian state commercial courts. Of course, the chances of enforcing such Russian court judgments outside Russia would be very questionable.

B.2       Sanctions found to be valid reasons for the lapse of the limitation period (“Power Machines case”)[24]

This case is also based on the newly introduced exclusive jurisdiction of Russian state commercial courts in disputes involving sanctioned entities and/or based on sanctions. However, here no claims for an injunction or penalties were filed, as the respondent had not initiated or threatened to initiate foreign proceedings. Rather, the claimant, PJSC Power Machines, filed a claim on the merits arguing that the agreed SCC arbitration clause was unenforceable due to the imposition of sanctions against the claimant.[25] Whereas in the Uraltransmash case the arbitration was underway at the time the sanctioned party was asking for an injunction, here the claimant provided proof of bank refusals to transfer money to pay the SCC registration fee due to sanctions and the eventual termination of the planned SCC proceedings because of failure to transfer the fee to the SCC Institute.[26] In opposing the unenforceability of the arbitration clause, the respondent relied on the same reasoning as discussed in the Uraltransmash case, namely, that the claimant failed to discharge the burden of proof that the imposition of sanctions created for it obstacles in its access to justice. However, the trial court dismissed these arguments referring to the proof of bank refusals provided by the claimant.[27] By the time of the appeal proceedings, the ruling of the Supreme Court in the Uraltransmash case had been issued and the appeal court repeated almost word for word its reasoning.[28]

The merits of the case concerned the recovery of monies for the works performed as well as penalties under two contracts with “DTEK Vostokenergo” for modernization of a steam generating unit and a turbo generating unit at the Lugansk power electric station. The respondent argued that it failed to honor its payment obligations as its paying bank refused to effect the transactions under the contracts because of US and Ukraine sanctions imposed on PSJC Power Machines and its ultimate beneficial owner. The respondent argued these facts constituted force majeure events. The court dismissed the arguments inter alia finding that the respondent failed to provide proper evidence to substantiate the occurrence of force majeure events in accordance with the contractual provisions. The court refused to accept documents in a foreign language without translation into Russian.[29]

Also, the respondent argued that the one-year limitation period with regard to the claim for penalties under article 258(2) of the Civil Code of Ukraine had lapsed. The court found that PJSC Power Machines was not able to exercise its right to seek judicial remedies as a result of US and Ukraine sanctions and thus its right of recourse to courts only arose after the Federal law introducing exclusive jurisdiction under article 248.1 of the CAP took effect. Therefore, the court agreed with the claimant that sanctions were objective circumstances that made it impossible to timely file the claim, and thus the claims for penalties are enforceable.

B.3       Party entitled to judicial penalties for failure to comply with a judicial act (“Sovfracht case”)[30]

Similar to the Uraltransmash case, this case deals with a sanctioned party seeking an injunction and penalties based on the exclusive jurisdiction of state commercial courts introduced in June 2020. Here the dispute arose out of a contract for performing refurbishment services at properties located in the UK that the claimant, JSC Sovfracht, had entered into with “Prosperity Estate Ltd” (contractor). The contract provided for the jurisdiction of the English courts. The claimant argued that due to sanctions it was in an inferior position as compared to the foreign counterparty as regards defending its rights in the agreed foreign forum. Among the difficulties, the claimant mentioned that it was restricted in seeking legal assistance from foreign lawyers, and obtaining the OFAC authorization was time-consuming. Also, according to the claimant, certain law firms refuse to work for SDNs. The respondent countered that there was no court practice restricting access to the English courts for sanctioned entities. The court agreed with the claimant that it was substantially restricted in defending its rights in a foreign jurisdiction due to US sanctions and is only able to defend its rights within Russian territory and jurisdiction. Also, the court relied on articles 2, 18 and 75 of the Russian Constitution noting that the actions of Russian public authorities could not further exacerbate the position of sanctioned entities. The court granted the injunction sought by the claimant to initiate or continue proceedings in a foreign court but refused to award penalties for failure to comply with the injunction.[31] The court reasoned that awarding penalties was the court’s right and not an obligation. In addition, no proof of foreign proceedings was available and it was the amount in dispute in the case filed against the sanctioned entity that served as the threshold for the maximum amount of penalties.[32] The cassation court overturned the findings of the lower court on the issue of penalties and sent the case for a retrial by the first instance court.[33] The cassation court established that, based on the literal interpretation of article 248.2[34] of the CAP, the penalty the claimant was seeking represented judicial penalties to be awarded to the claimant for failure to comply with the court judgment (the injunction) and therefore the court could not refuse to award such penalties. The lower court also failed to assess the letter of request for service on JSC Sovfracht of English court’s documents that was resolved in separate proceedings.[35] . The cassation court instructed the first instance court to ascertain at retrial whether the claim was filed and to establish the amount sought from the claimant.

These decisions demonstrate that Russian state commercial courts are resolving a number of disputes falling under the newly introduced CAP provisions establishing exclusive jurisdiction of Russian courts in disputes involving sanctions or sanctioned entities. The courts in such disputes usually take the position that sanctions place claimants at a disadvantage and make Russian state courts the only available forum. Also, a draft law amending article 248.1 of the CAP is pending[36] and is aimed at further strengthening[37] the guarantees offered to sanctioned Russian citizens and legal entities. Such developments are likely to further disrupt the contractually agreed dispute resolution mechanisms and foreign parties should review their contracts to identify potential risks of having to litigate their disputes in Russia.

B.4       Awards by unlicensed foreign arbitral institutions in Russia-seated proceedings are considered awards issued in ad hoc arbitrations[38]

This case was briefly mentioned in the 2020-2021 Yearbook and concerned an important issue of enforcement in Russia of an award rendered in Russia-seated proceedings administered by a foreign unlicensed arbitral institution.[39] The dispute arose out of a services agreement for supervision over the mounting and commissioning of equipment dated 21 October 2014, entered into between Siemens LLC (a Russian subsidiary of Siemens) as contractor and Caspian Energy Projects LLC as the customer. The customer filed for SCC arbitration seated in Russia in March 2019. In June 2019 the parties confirmed[40] that SCC is entitled to administer the dispute, and the administering of the dispute fully complied with the requirements of the Domestic Arbitration Law.[41] The tribunal dismissed the customer’s claims and awarded Siemens LLC approximately USD 300 000. At the enforcement stage, the customer argued that SCC was not entitled to administer the dispute based on a general prohibition in paragraph 20 of article 44 of the Domestic Arbitration Law.[42] The trial court agreed and refused enforcement based on public policy violation.[43] The cassation court ordered a retrial[44] referring, inter alia, to the special regulation that awards issued by unlicensed foreign arbitral institutions are considered to be awards issued in ad hoc proceedings.[45] In the course of further proceedings, this position was upheld and the award enforced.[46] The courts did not agree that enforcement violated the general prohibition for unlicensed arbitration courts to perform any functions in administering Russia-seated arbitration proceedings (as argued by the petitioner).[47] Rather, the courts found that special regulation for awards by foreign arbitral institutions applies, namely that such awards are considered on the territory of Russia as awards issued in ad hoc arbitration proceedings.[48] For this provision to apply, the parties did not need to enter into a separate arbitration agreement for ad hoc arbitration, as argued by the petitioner. The Supreme Court refused to reconsider the decisions of the lower courts.[49]

This is an important case reducing uncertainty with regard to enforcement of awards issued by unlicensed foreign arbitral institutions in Russia-seated proceedings. It upholds the interpretation of the law that enables enforcement of such awards and thus contributes to supporting arbitration in Russia.

B.5       Unlicensed foreign arbitral institutions able to perform separate functions in Russia-seated ad hoc arbitration proceedings[50]

In this case, the court was deciding whether ICC was able to perform functions in administering ad hoc arbitration prior to obtaining the license.[51] The Ministry of Labour and Social Relations of Kazakhstan (“Agency“) challenged a positive ruling on having jurisdiction issued in Moscow by the sole arbitrator appointed by the ICC as appointing authority. The arbitration agreement entitled the ICC to appoint the sole arbitrator[52] where one of the parties (here it was the Agency) failed to appoint its arbitrator within the agreed term. Amongst others, the Agency argued that the general prohibition in article 44(20)[53] prevented an unlicensed arbitral institution from performing separate administering functions in ad hoc arbitration, including the appointment of the arbitrator. The court disagreed and found that there is no prohibition for unlicensed foreign arbitral institutions to perform separate functions of administering ad hoc arbitrations seated in Russia, including the appointment of the arbitrator. The court further relied on the earlier [54] Supreme Court decision where it stated that it found a violation of the law where certain administrative functions were performed by an unlicensed institution. However, in that case, there was an appearance of ad hoc proceedings while in reality the case was administered by a sham arbitral institution (Helsinki International Commercial Arbitration Court) and the proceedings took place in Russia.[55] However, in this case, there was no such evidence. Thus, the court dismissed the applicant’s challenge of the award on having jurisdiction.[56]

This case is notable as it further clarified the contradictory regulation in the Domestic Arbitration Law regarding the consequences of administering arbitrations by unlicensed foreign arbitral institutions. In addition to the previous case, this court practice confirms that the purpose of introducing the license was to fight unreliable arbitration courts and not to create unnecessary obstacles for reputable foreign arbitral institutions.

B.6       Restricted arbitrability of a broader category of corporate disputes possible in Russia[57]

This case deals with enforcement of a corrected[58] final arbitral award dated 23 February 2021 rendered in LCIA proceedings[59] whereby the claimants’ unilateral termination of the option agreement[60] for the purchase of shares in “DL Management Limited” was found lawful and respondents were found to be jointly and severally liable to pay damages of USD 49 million.[61] The respondent (Bogatikov A.A.) opposed enforcement, arguing that when calculating the damages, the tribunal arbitrarily amended EBITDA, without relying on the available evidence, but rather adapted the figure to fit the pre-determined result called the amount of damages.[62] The court ruled that arbitrarily awarding damages without taking into account the actual damages violates the principle of proportionality of civil law liability as well as the equality of rights of parties in civil law relations. In addition, it violates the principle of legality and is contrary to fundamental basic legal principles of the Russian Federation as well as the constitutional legal remedies of Russian citizens. Therefore, the court refused enforcement based on public policy.

In addition to the above grounds, the court also upheld the respondent’s argument that the dispute resolved by the LCIA was not arbitrable. Thus, though the parties to the dispute were foreign companies and the target was also a foreign holding company having equity in a Russian entity, the court ruled that it was, in fact, a Russian corporate dispute in relation to the establishment of a Russian legal entity, management and participation in such legal entity.[63] The court noted that the option agreement established the obligations of the parties as to distribution and ownership of shares in Russian companies, and also provided for exercising corporate control and determining the procedure for managing the Russian companies. The court added that the foreign holding structure for managing Russian companies was of a technical nature and the parties have in fact concluded the option agreement to regulate participation in Russian companies and management thereof, thus, the dispute was non-arbitrable under Russian law. Further, Russian law only allows for arbitration of corporate disputes where the arbitration agreement was entered into after 1 February 2017. As the option agreement was signed on 27 February 2015 the dispute provisions are unenforceable and the parties’ dispute was to have been resolved by a Russian state court, which had exclusive jurisdiction. The trial court’s ruling was not challenged and entered into force.

The case is important because it broadens the scope of restricted arbitrability of corporate disputes in Russia. Before this decision, the Russian law was read to be applicable only in relation to Russian legal entities only, rather than those concerning Russian assets held through an offshore structure.

B.7       Law of the seat applies to arbitration agreement where parties have not made the choice[64]

In this case, a sub-contractor company filed claims with a Russian state commercial court against a contractor for the return of façade panels transferred to the contractor in the course of performing a subcontract in relation to the construction of a business center in St. Petersburg. The courts of four levels left the claim without consideration due to a valid and enforceable arbitration agreement providing for ICC arbitration seated in London.[65] In so doing, the courts dismissed the claimant’s arguments that the arbitration clause was invalid and unenforceable. Importantly, the courts agreed that as the arbitration clause provided for London-seated arbitration and did not specify the law applicable to the arbitration agreement, then the law of the seat, that is, English law, applies to the issues of validity and enforceability of the arbitration agreement.

The courts accepted an English law legal opinion prepared by an expert and submitted by the respondent. The legal opinion clarified inter alia: (1) Under English law, a company’s bankruptcy does not directly influence the validity of an arbitration agreement signed before being declared bankrupt; (2) English law does not establish any requirement that there should be any connection between the parties and/or subject-matter of arbitration proceedings on the one hand, and England and Wales, on the other hand, for an arbitration agreement to be valid under English law.

This case is important because there has not been established court practice in Russia on the issue of the law applicable to the arbitration agreement in the absence of an express agreement by the parties. Though the issue remains unsettled in a number of jurisdictions, while in others the courts vary in their approach,[66] identifying the law of the seat of arbitration as an implied choice of the law applicable to the arbitration agreement will contribute to certainty on this issue.


[1] Law N 5338-1 dd. 07.07.1993 (as amended on 25 December 2018).

[2] Federal Law No382-FZ on Arbitration (Arbitration Proceedings) in the Russian Federation dd. 29 December 2015 (as amended on .

[3] In order to administer arbitrations in Russia, since November 2017 an arbitral institution is to obtain a special authorization (“license”). The license is issued by the Ministry of Justice upon a recommendation of a Council for Improvement of Arbitration provided the statutory criteria (Article 44 of the Domestic Arbitration Law) are met.

[4] See the list at the website of the Russian Ministry of Justice at:

[5] International Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation,

[6] Maritime Arbitration Commission at the Chamber of Commerce and Industry of the Russian Federation,

[7] Arbitration Center at Russian Union of Industrialists and Entrepreneurs,

[8] Russian Arbitration Center at the Russian Institute of Modern Arbitration (RAC),




[12] Included into the list on 18 May 2021.

[13] Included into the list on 18 May 2021.

[14] The list is available at:

[15] See Overview in Russian at:

[16] JSC “UralTransmash” (Ural Transport Machinery Construction Company JSC) v. Pojazdy Szynowe PESA Bydgoszcz SA (“PESA”), case file at:

[17] See Section A of the 2020-2021 Baker McKenzie International Arbitration Yearbook at:

[18] Article 248.1(4).

[19] Article 248.2 of the CAP. For further detail See Section A of the 2020-2021 Baker McKenzie International Arbitration Yearbook at:

[20] See Case B.2 of the 2020-2021 Baker McKenzie International Arbitration Yearbook at:, JSC “UralTransmash” (Ural Transport Machinery Construction Company JSC) v. Pojazdy Szynowe PESA Bydgoszcz SA (“PESA”), (“Uraltransmash case”), case file at:

[21] Ruling of the Supreme Court’s Economic Panel dd. 9 December 2021.

[22] The court found that sanctions did not prevent claimants from retaining foreign qualified lawyers and did not require claimants to obtain any authorizations from Swedish authorities, including for making payments to the Arbitration Institute. The court also dismissed the claimants’ arguments that the award would likely be unfavorable to them due to sanctions and the resulting attitude to sanctioned Russian entities. See Ruling of Arbitrazh Court of Sverdlovsk region dd. 24 November 2020 in case А60-36897/2020, upheld by the cassation court on 17 March 2021.

[23] Ruling of the Supreme Court’s Economic Panel dd. 9 December 2021 in case А60-36897/2020.

[24] PJSC Power Machines v. “DTEK “Vostokenergo” LLC, case number А56-57238/2020, case file at:

[25] Power Machines PJSC and its ultimate beneficial owner were included into the Ukraine and US lists of sanctions.

[26] Thus, Sberbank letter № 186 dd. 08.07.2019 confirmed the refusal to transfer the payment in Euro due to the refusal of the Helaba bank; Sberbank letter of 28.02.2020 stated the payment to the account of the SCC Institute could not be effected via Sberbank’s swiss subsidiary; VTB Bank letter of 26.06.2019 confirmed the refusal to transfer payment in Euro to the SCC Institute’s account. SCC Institute by letter of 30.04.2020 informed the claimant of the termination of proceedings due to failure to pay the registration fee.

[27] Judgment of Arbitrazh Court of St. Petersburg and Leningrad region dd. 29 April 2021.

[28] Resolution of the 13th Arbitrazh Court of Appeal dd. 30 December 2021.

[29] Those documents allegedly were certificates of Ukrainian Chamber of Industry and Commerce.

[30] JSC Sovfracht v. “Prosperity Estate Ltd.”, case А40-156736/20-68-1037, case file at:

[31] Judgment of Arbitrazh Court of Moscow dd. 8 October 2021.

[32] Under Para. 10 Article 248.2 of the CAP the amount of penalties an applicant is entitled to under the provisions could not exceed the amount of stated claims in foreign proceedings and judicial expenses borne by a party.

[33] Resolution of Arbitrazh Court of Moscow Circuit dd. 25 January 2022.

[34] See Para. 10 Article 248.2 of the CAP: Arbitrazh court based on principles of fairness, adequacy and prevention of profiteering from unlawful or mala fide activities, may upon an applicant’s request award in its favour monies to be recovered from a party against whom an injunction to initiate or continue foreign proceedings has been issued, in case the party fails to comply with the injunction. The amount of monies to be awarded by the arbitrazh court shall not exceed the amount of stated claims filed in a foreign court, international commercial arbitration proceedings outside Russia and judicial expenses borne by a party to the dispute.

[35] The Russian Ministry of Justice sent to the court the letter of request from the Competent authority for England and Wales of the UK asking for serving court documents on JSC Sovfracht. The representative of JSC Sovfracht refused to take the documents during the hearing on 22 September 2021 and thus the letter of request could not be executed. See case file at:

[36] Draft Law No. 25200-8 On amendments to the Arbitrazh Procedure Code of the Russian Federation.

[37] In particular, the Draft Law provides for granting such persons an unconditional right of access to Russian state commercial courts in order to defend their rights against foreign individuals and legal entities that:

(1) have either directly or indirectly contributed to the imposition of restrictive measures, or (2) have obtained unfair preferences as a result of restrictive measures, or (3) have unjustly benefited from the imposition of restrictive measures, or (4) failed to perform or unduly performed an obligation in relation to restrictive measures. or (5) suspended / declined to cooperate with sanctioned parties, thus causing such parties to incur damages and suffer other adverse effects.

[38] Siemens Neftegaz i Energetika LLC v. Caspian Energy Projects LLC Case number А06-2352/2020; case file at:

[39] See the last paragraph of the 2020-2021 Baker McKenzie Yearbook at:

[40] Agreement on Procedural Issues dd. 18 June 2019.

[41] The Domestic Arbitration Law introduced restrictions on administering arbitrations in Russia, such as licensing of arbitral institutions.

[42] See Article 44(20) of the Domestic Arbitration Law stipulates that “Unlicensed arbitration courts are prohibited from discharging functions of administering arbitration, including appointment of arbitrators, ruling on challenges and termination of arbitrators’ mandate as well as from performing other actions in relation to conducting arbitration by an ad hoc arbitral tribunal (processing arbitration costs and fees, providing premises for hearings etc)…In case of breach of the above prohibition the arbitral award, including that by an ad hoc tribunal is considered to have been issued in breach of the arbitration procedure stipulated by this Federal Law.”

[43] Ruling of Arbitrazh Court of Astrakhan region dd. 30 July 2020.

[44] Resolution of Arbitrazh Court of Povolzhsky Circuit dd. 16 October 2020.

[45] Para.3 Article 44 of the Domestic Arbitration Law.

[46] Ruling of Arbitrazh Court of Astrakhan region dd. 03 December 2020; Resolution of Arbitrazh Court of Povolzhsky Circuit dd. 11 March 2021.

[47] See Article 44(20) of the Domestic Arbitration Law, footnote 45 above.

[48] See Article 44(3) of the Domestic Arbitration Law. At that, the court dismissed the respondent’s objections that for the special provisions to apply the parties should have entered into an ad hoc arbitration agreement.

[49] See Ruling of the Supreme Court dd. 29 June 2021.

[50] Kazakh Ministry of Labour and Social Relations v. Unicon Ltd., case number А40-228640/21-68-1456, case file at:

[51] ICC obtained the license in May 2021, whereas it appointed sole arbitrator in this case on 1 October 2020.

[52] The arbitration agreement in Clause 45.1.1.(b)-(c) of the special conditions of contract stipulates “that where the parties do not agree that the subject-matter of a dispute is a technical issue, then both the customer and the consultant appoint one arbitrator, and those two arbitrators jointly appoint the third arbitrator who is to serve as chairperson. Where in a dispute in accordance with clause (b) above one of the parties fails to appoint its arbitrator within thirty (30) days after the appointment by the other party of its arbitrator, then the party that appointed an arbitrator is entitled to request that the ICC, Paris appoint a sole arbitrator to resolve the dispute, and the arbitrator so appointed will serve as the sole arbitrator in such dispute.

[53] See above.

[54] Para.50 of the Supreme Court’s Plenum Resolution #53 dd. 10 December 2019.

[55] For more information, See Case B.4 of the 2020-2021 Baker McKenzie Yearbook at:

[56] Ruling of the Moscow Arbitrazh Court dd. 14 February 2022.

[57] Caledor Consulting Limited v. Bogatikov A.A., case number А56-25416/2021, case file at:

[58] The initial arbitral award was issued on 21 January 2020 and awarded USD 58 million to the claimants. The enforcement of the original award was refused on 25 November 2020 (case number А56-20377/2020) due to a mistake in the award.

[59] The claimants in LCIA proceedings were Caledor Consulting Limited and Khabarov M.V., and respondents were Doglemor Trade Limited, DL Management Limited and Bogatikov A.A.

[60] The option agreement for purchasing shares dd. 27 February 2015 was entered into between Caledoar and Khabarov of the one part, and Doglemor and Bogatikov of the other part in relation to shares in “DL Management Limited” that was to become sole owner of a group of Russian companies “Delovye Linii”. Doglemor was seller under the Agreement, Caledor was Buyer. Bogatikov and Khabarov acted in the Agreement as beneficial owners and controlling persons of seller and buyer respectively. The option could be exercised as from 3 years and until 5 years since the conclusion date.

[61] The subject-matter of the arbitration was the evaluation of the value of business of the holding company as of 1 March 2018. Claimant’s (buyer’s) damages were to be determined as a difference between the actual value of 30% of the holding company’s business and the price of the option – USD 60 million, but were not to exceed USD 60 million. In order to establish the actual value of the holding company’s business experts were involved in LCIA proceedings, nominated by both parties. These experts agreed on the general model of calculating the value of the holding company’s business and the amount of claimants’ damages. According to this model, the total value of the holding company’s business calculated based on discounted cash flow analysis as of 1 March 2018 was to be corrected, inter alia by subtracting tax risks of Russian companies controlled by the holding company. Thus, the total value of the holding company’s business of USD 300 million had to be reduced by USD 90 million, according to the tribunal. However, in the final award the amount of tax risks was not deducted from, but added to the value of the holding company business. LCIA admitted the mistake but did not correct it. Subsequently, the High Court of Justice overturned the award due to serious violation and sent the case back to the arbitration. The tribunal then corrected the mistake but at the same time increased EBITDA without obtaining or assessing new evidence from 9.5% to 12.5%.

[62] See Ruling of Arbitrazh Court of St. Petersburg and Leningrad Region dd. 21 October 2021.

[63] Paras. 2-5 of Article 225.1 of the CAP.

[64] “Waagner Biro RUS” LLC v. JSC Renaissance Construction, case number А56-77023/2020, case file available at:

[65] See Judgment of Arbitrazh Court of St. Petersburg dd. 9 February 2021; Resolution of the 15th Arbitrazh Court of Appeal dd. 15 April 2021; Resolution of North Western Arbitrazh Court

[66] Thus, in certain jurisdictions the law of the contract would be the first implied choice, whereas in others – the law of the seat.


Vladimir Khvalei is a partner in Baker McKenzie's Moscow office and heads the firm’s CIS Dispute Resolution Practice Group. He is Vice Chairman of the ICC Commission on Arbitration and ADR, Council Member of the ICC Institute of Business Law, Chairman of the Board of the Russian Arbitration Association and Board Member of the ICCA.


Irina Varyushina is a professional support lawyer in Baker McKenzie's Moscow office.