The Arbitration Rules 2021 of the Russian Arbitration Center: What Is New?

William Hogarth

Bambridge on Trial for Murder by a Committee of the House of Commons, 1729

The Arbitration Rules 2021 of the Russian Arbitration Center: What Is New?

On 13 December, the Russian Arbitration Center at the Russian Institute of Modern Arbitration (RAC) has published the new Arbitration Rules 2021. There is a first major revision of the RAC Rules since the beginning of 2017, when the RAC had obtained the status of a permanent arbitration institution in Russia.

In 2020, the RAC carried out a comprehensive examination of the rules and procedures conducted involving the Dechert arbitration team from London, Washington and New York. The comments, given by experts led by Arif Hyder Ali, partner and co-chair of Dechert’s International Arbitration Group, provided the basis of the new Arbitration Rules 2021. In June-July 2021, the RAC published a draft of the Arbitration Rules 2021 and launched the public consultations.

General Description

The new Arbitration Rules have become shorter compared to the previous version, the Arbitration Rules 2017. The Arbitration Rules 2021 contain 100 articles, which is 8 articles less than the previous Rules. The provisions of the Arbitration Rules 2017 copying the provisions of the Russian legislation on arbitration were deleted. Meanwhile, the structure and the general scope of the chapters of the Arbitration Rules 2021 remained almost unchanged.

It is also important to note that the numbers of articles of the Arbitration Rules 2021 shifted due to deleting several articles and implementing some. For instance, the provision regulating commencement of arbitration (Article 10. Request for Arbitration) of the Arbitration Rules 2017 turned into Article 9 of the Arbitration Rules 2021.

In general, the text of the Arbitration Rules 2021 is more simplified and flexible, which allows better adapting them to evolving circumstances and different seats of arbitration.

Calculation of Value of Claims Which Are Not Subject to Monetary Evaluation

The Arbitration Rules 2017 provided for the fixed value of claims which cannot be evaluated in a monetary form, which equaled to 30 million Rubles for domestic disputes and 500 thousand US dollars for international arbitration.

Establishing the fixed value of claim without considering circumstances of a specific case could be viewed as a quite rigid regulation. In some cases, it may have led to an unfair arbitration fee, either too large or too small.

To avoid this, in Arbitration Rules 2021 the RAC has implemented much more flexible approach to evaluation of the value of such claims. According to Article 8.2, if the claim is not subject to monetary evaluation, the Board determines the value of the claim, taking into account the circumstances of the particular dispute.

Commencement of Arbitration by a Short Request for Arbitration

The Arbitration Rules 2017 provided for the opportunity to commence arbitration in two different ways, by filing either a short request for arbitration or a claim which includes a detailed position.

In practice, as a result, either parties did not know of such an opportunity to split their procedure into two stages, or they just followed the more conventional way and filed the claim.

To avoid this confusion, the Arbitration Rules 2021 by default consider any submissions made by the claimant and the respondent at the commencement stage as the request and the answer to request. Thus, the parties can exchange their detailed memoranda (claim and response) in any case after constitution of the arbitral tribunal according to the procedural schedule.

The Arbitration Rules 2021 also provide that these first submissions (the request and the answer to that) will be deemed as the claim and response automatically if the parties do not file their separate detailed memoranda after the tribunal’s constitution.

Presiding Arbitrator is Chosen by Co-Arbitrators by Default

As a default rule, the Arbitration Rules 2017 provided that both sole arbitrators and presiding arbitrators shall be appointed by the RAC’s Board.

The caseload of the RAC grows rapidly, and with that, the workload of the Board, so, to avoid longer time limits for appointing process, we decided that the presiding arbitrator would be chosen by the co-arbitrators by default. Besides, it corresponds to the international best practices.

The Arbitration Rules 2021 also grant to the Board an authority to reject in exceptional cases the candidates, whether nominated by the parties or co-arbitrators.

Constitution of Arbitral Tribunal in Case of Multy-Party Arbitration

The Arbitration Rules 2021 provide for a special order of constitution of the arbitral tribunal if there are co-claimants or co-respondents in the proceedings. According to Article 17, when constituting the panel of arbitrators, the co-claimants (co-respondents) may jointly designate the arbitrator. If they fail to do that, the Arbitral Tribunal shall be appointed entirely by the Board. It allows to avoid unequal treatment of the parties.

Disclosure under the RAC Rules

Article 35.5 of the Arbitration Rules 2021 indicates directly that the Arbitral Tribunal, taking into account the opinion of the Parties, may establish the schedule for the disclosure of evidence, as well as order the production of evidence by a Party upon a reasoned request of the other Party.

Tribunal’s Authority to Conduct Online Hearings

As a response to the pandemic restrictions all around the world, the Arbitration Rules 2021 directly provide for the authority of the arbitral tribunal to use videoconferencing for the hearings. According to the wording of Article 37.7, the arbitral tribunal can executive this authority even in the absence of a parties’ consent.

New Provisions on Interim Measures

The Arbitration Rules 2021 became the first rules of the Russian arbitral institution that allow appointing an emergency arbitrator to decide on emergency interim measures (Article 48).

Besides, the Arbitration Rules 2021 suggest the parties using an instrument under which the party may file an additional claim for awarding a monetary amount for non-compliance with the interim measures (astreinte-like mechanism). The party obtains such a right under two conditions: first, the interim measures shall be granted or confirmed by the arbitral tribunal; second, the parties shall agree upon this mechanism in their arbitration clause.

New Expedited Arbitration Procedure

The Arbitration Rules 2021 are much more flexible in the context of expedited arbitration; for instance, they provide for the parties’ opportunity of transition from the expedited procedure to the standard one and vice versa.  The parties may agree that three arbitrators shall consider their disputes. Unless the parties expressly agree otherwise, in some cases the hearings may be held even under the expedited procedure.

Under the RAC Arbitration Rules 2021, a claim of any value may be referred to the expedited arbitration. The period of expedited arbitration shall not exceed 70 days for domestic cases and 90 days for international ones from the date when the arbitral tribunal is constituted.

Med-Arb Procedure

Now the Arbitration Rules 2021 specifically provide for the right of the party to the mediation agreement to apply to arbitration for its confirmation as an arbitral award on agreed terms. For such a request, a sole arbitrator is appointed to verify the terms of the mediation agreement and render an award within 40 days from the date of the Arbitral Tribunal’s constitution.

Third-Party Funding Regulation

The Arbitration Rules 2021 expressly provide for the third-party funding mechanism. The Rules on Arbitration Fees and Arbitration Costs include the provisions on disclosure of the existence of the TPF agreement and the finder’s identity.

The issue of TPF is now on the agenda of the arbitration community. In the spring 2021, the task force was created to conduct the research on Third-Party Funding (TPF) in Russia. The task force includes the leading Russian and international legal experts in arbitration. The research is conducted with the support of the RIMA.

Strict Rules on Conflict of Interest for RAC Board and Administrative Office

The Arbitration Rules 2021 provide that the Board’s members may be appointed as arbitrators by the Board under exceptional circumstances. These limitations do not apply if the Board’s members are designated by a Party, agreed upon by Parties or chosen by co-arbitrators.

The Internal Rules of the RAC also establish a mechanism to avoid the conflict of interest of the Executive Administrator.

RAC’s Arbitration Fees

As an example of different arbitration and other fees under the RAC’s Rules, please find below the tables with calculations of the arbitration fees depending on the value of claim and the procedure chosen.

To calculate the arbitration fees, please use the Calculator page on the RAC’s website.

Domestic Disputes

Value of Claim (in Rubles) Administrative Fee Arbitrator’s Fee Arbitration Fee (in total)
10 000 000[1] 58 000 155 000 213 000
50 000 000 350 000 850 000 1 200 000
200 000 000 570 000 1 700 000 2 270 000
1 000 000 000 830 000 3 350 000 4 180 000
10 000 000 000 1 250 000 8 750 000 10 000 000

If the sole arbitrator considers the case:

Arbitration Fee Depending on Value of Claim (in Rubles) Three Arbitrators Sole Arbitrator
50 000 000 1 200 000 1 030 000
200 000 000 2 270 000 1 930 000
1 000 000 000 4 180 000 3 510 000
10 000 000 000 10 000 000 8 250 000

If the expedited procedure is chosen:

Arbitration Fee Depending on Value of Claim (in Rubles) Standard Procedure Expedited Procedure[2]
50 000 000 1 200 000 812 500
200 000 000 2 270 000 1 560 000
1 000 000 000 4 180 000 2 927 500
10 000 000 000 10 000 000 7 187 500

Emergency arbitrator’s fee: 200 000 Rubles.

International Arbitration

Value of Claim (in US dollars) Administrative Fee Arbitrator’s Fee Arbitration Fee (in total)
200 000[3] 5 350 15 120 20 470
1 000 000 9 100 29 600 38 700
5 000 000 12 100 47 100 59 200
20 000 000 15 600 66 600 82 200
50 000 000 18 600 111 600 130 200

If the sole arbitrator considers the case:

Arbitration Fee Depending on Value of Claim (in US dollars) Three Arbitrators Sole Arbitrator
1 000 000 38 700 32 780
5 000 000 59 200 49 780
20 000 000 82 200 68 880
50 000 000 130 200 107 880

If the expedited procedure is chosen:

Arbitration Fee Depending on Value of Claim (in US dollars) Standard Procedure Expedited Procedure[4]
1 000 000 38 700 26 750
5 000 000 59 200 41 375
20 000 000 82 200 57 750
50 000 000 130 200 93 000

Emergency arbitrator’s fee: 5 000 US dollars.

[1] If the value of claim is less than 30 000 000 Rubles, a sole arbitrator is appointed. The arbitrator’s fee calculated for the whole tribunal.

[2] If a sole arbitrator is appointed.

[3] If the value of claim is less than 500 000 US dollars, a sole arbitrator is appointed. The arbitrator’s fee calculated for the whole tribunal.

[4] If a sole arbitrator is appointed.