A. LEGISLATION AND RULES
A.1 Legislation
International arbitration in Belarus continues to be governed by the Law on the International Arbitration Court[1] (“International Arbitration Law“), which was enacted on 9 July 1999. This law is based on the UNCITRAL Model Law, and no significant amendments have been made since its enactment. In addition, the Economic Procedural Code, adopted on 15 December 1998, contains provisions relating to challenging and enforcing local and foreign arbitral awards.
Belarus is a party to a number of international and regional treaties that relate to arbitration proceedings, including the New York Convention, the Geneva Convention, and several CIS treaties.
Over the past year, the Belarusian government has taken significant steps to develop and promote ADR for the settlement of disputes between parties.
In particular, under the amendments to the Law on Advocacy and Advocacy Activity in the Republic of Belarus adopted in July 2017, it was clarified that local advocates, as well as mediators, are allowed to act as arbitrators in international and domestic arbitrations.
In addition, in January 2018, the Belarusian Parliament adopted amendments to the Civil Procedural Code, which, among other things, provide for the settlement of cases via mediation in appellate court proceedings.
Meanwhile, the government is also considering amendments to the local laws that are supposed to increase state control over domestic arbitration courts. In particular, these amendments should, among other things, prohibit the use of “pocket arbitration institutions” for the settlement of disputes by affiliated parties.
At the same time, the Belarusian Parliament adopted in 2023 a new law that, among other things, sets forth the exclusive jurisdiction of the Belarusian courts over disputes involving Belarusian companies that are sanctioned by foreign countries, or disputes arising from foreign sanctions despite of the fact that there is a choice-of-court or arbitration agreement referring to foreign courts/arbitrations. In addition, this law allows sanctioned companies to apply to Belarusian courts seeking anti-suit measures, which should prevent foreign companies from commencing or continuing legal actions in foreign courts or arbitration institutions. While there is no well-established court practice yet, we assume that local courts will follow the very broad approach used by the Russian courts in applying the similar provision of the “Lugovoi Law” adopted by Russia in 2020.
A.2 Institutions, rules and infrastructure
After the adoption in July 2011 of the Law on Domestic Arbitration Courts[2] and the relevant sub-laws regulating the procedure of the establishment and registration of arbitration institutions, the number of arbitration institutions registered in Belarus increased significantly. There are currently more than 30 arbitration institutions, the oldest and most popular of which is the International Arbitration Court at the Belarusian Chamber of Commerce and Industry (IAC), which was established in 1994.
The IAC handles all types of commercial disputes between local and foreign companies, except disputes that are non-arbitrable under Belarusian law (e.g., disputes relating to rights over immovable property located in Belarus, privatization contracts, IP rights, etc.). The IAC also reviews commercial disputes between local companies.
In addition, another international arbitration institution, the Chamber of Arbitrators at the Belarusian Union of Lawyers, renewed its activity in 2020 and adopted its new arbitration rules, which are based on UNCITRAL Arbitration Rules. It has the same broad jurisdiction as the IAC and is supposed to be its main competitor.
B. CASES
Belarusian court decisions are usually not publicly disclosed. Generally, Belarusian courts take an arbitration-friendly approach, although they have relatively limited experience in dealing with arbitration-related cases, which may lead to controversial court practices.
With regard to investment arbitration cases, there are currently at least two pending arbitration proceedings commenced by foreign investors against Belarus: Delta Belarus Holding BV (2018) and GRAND EXPRESS (2018).
In 2023, the Belarus government announced that it defeated the investment claim of UAB Pavilnių and UAB Modus grupė relating to alleged violations of investors’ rights during the implementation of the construction project in the Minsk Region. This confirms the recent trend of Belarusian authorities acting aggressively in connection with foreign investors.
In addition, Belarus adopted in January 2023 the Law on Seizure of Property, which allows the government to seize assets of companies owned or controlled by companies/persons from “non-friendly jurisdictions” (i.e., jurisdictions that imposed or joined sanctions against Belarus). Among other things, this law allows local state authorities to ignore interim measure awards issued by arbitral tribunals sitting in these jurisdictions.
It is believed that the enforcement of this law will lead to additional investment claims against the Republic of Belarus.
[1] Law of the Republic of Belarus No. 279-Z on the International Arbitration Court dated 9 July 1999 (as amended).
[2] Law of the Republic of Belarus No. 301-Z on Domestic Arbitration Courts dated 18 July 2011.
