ICC and SIAC Receive “Permanent Arbitration Institution” Status in Russia

On 19 May 2021, it was reported that the International Court of Arbitration of the International Chamber of Commerce (ICC) and the Singapore International Arbitration Centre (SIAC) have received from the Russian Ministry of Justice the right to act in Russia as permanent arbitration institutions (PAI).¹ At the time of preparing this update the ICC and the SIAC have confirmed this information on their websites², but the Russian Ministry of Justice has not yet published an updated list of PAIs.

Previously only two foreign arbitration institutions have received PAI status in Russia (in addition to Russian PAIs): the Vienna International Arbitration Centre (VIAC) and the Hong Kong International Arbitration Centre (HKIAC).

PAI status will grant the ICC and the SIAC the following advantages and opportunities:

• The ICC and the SIAC will be able to administer international arbitration proceedings seated in Russia. ICC / SIAC awards in Russia-seated arbitrations will no longer be recognised as having been issued by ad hoc tribunals, which reduces risks related to the enforcement of such awards in Russia.
  
  However, in order to administer internal disputes, foreign PAIs need to have a representative office in Russia, although neither the VIAC nor the HKIAC have offices in Russia. The ICC and the SIAC have not publicly announced any plans to set up offices in Russia.

• A number of disputes can be referred to arbitration under ICC / SIAC Rules: for example, corporate disputes regarding sale and purchase agreements in respect of shares/participation interest in Russian legal entities, or shareholder agreements in relation to Russian companies.
  
  

  Nonetheless, in order to administer certain corporate disputes,³ PAIs need to adopt and register with the Russian Ministry of Justice special Rules of Arbitration of Corporate Disputes. Currently no foreign PAI has done this.

Overall, the receipt by the ICC and the SIAC of PAI status will naturally increase their popularity in Russia-related deals and disputes. We advise you to consult your legal counsel to understand how the abovementioned news may work in your situation.

¹Pursuant to Article 44 of Federal Law dated 29 December 2015 No. 382-FZ “On Arbitration (Arbitral Proceedings) in the Russian Federation” (Law on Arbitration).
²Russian Ministry of Justice grants ICC Permanent Arbitration Institution status and SIAC Licensed to Administer Disputes in Russia
³For example, on challenging transactions of the legal entity; related to the appointment or dismissal of persons in the management and control bodies of the legal entity; as well as the others set out in Part 4 of Article 45 of the Law on Arbitration and Parts 3 and 4 of Article 225.1 of the Arbitrazh Procedure Code of the Russian Federation.