The Hong Kong International Arbitration Centre (HKIAC) has been made a permanent arbitral institution in Russia. It is the first foreign arbitral institution to be granted such status.
The Russian Council for the Development of Arbitration recommended the HKIAC on April 4 and Russia’s justice ministry will grant the permission by April 25.
Reforms introduced in September 2016 mean that institutional arbitrations seated in Russia and arbitrations concerning certain types of corporate disputes with Russian companies can only be submitted to a permanent arbitral institution, which can only be granted to an institution with “widely recognised international reputation”.
“By obtaining the status of a PAI under Russia’s amended arbitration law, HKIAC has taken the steps necessary to offer parties in certain Russian-related cases access to the services of an internationally recognised foreign arbitral institution,” said Matthew Gearing, chairperson of HKIAC. “From HKIAC’s perspective, we believe that parties will benefit from more options to resolve their disputes.”
HKIAC will become the first international arbitral institution authorised to administer international disputes seated in Russia; disputes between parties from any special administrative region as defined under Russian law or disputes arising from agreements to carry out activities in any such region; and certain types of corporate disputes in respect of a legal entity in Russia.
Certain other corporate disputes such as derivative claims may only be administered by institutions with permanent status and special rules for corporate disputes. HKIAC does not currently have special rules for corporate disputes.
HKIAC also lacks a separate division in Russia that, in addition to permanent status, is a requirement for a foreign arbitral institution to administer domestic arbitrations.
“The community of Russian general counsels and in-house lawyers welcomes HKIAC — the first international arbitration institution to have received permission to facilitate disputes in Russia,” said Alexander Smirnov, head of legal and compliance at Moscow Exchange Group. “I do believe that this is a significant step in the development of arbitration in Russia.”
With growing economic activity between Russian and Asian parties, HKIAC is emerging as a preferred institution for disputes involving Russian parties. HKIAC’s Administered Arbitration Rules are available in the Russian language and 35 Russian-speaking arbitrators are listed on HKIAC’s various panels of arbitrators.
Hong Kong has not imposed sanctions against Russian entities and does not require visas for Russian visitors.
“With its status as a PAI under Russian law, HKIAC is committed to providing its dispute resolution services to a broad range of Russia-related disputes in accordance with the Federal Law,” said HKIAC in a statement.