Jurisdiction of the Arbitrazhnii Courts

A quick and somewhat superficial look at jurisdiction is necessary in order to continue our exploration of the Arbitrazhnii Court of the Russian Federation. I am leaving out the specific references to the articles of the APC. If you are interested in them, please send me an email and I will forward them to you.

The Arbitrazhnii Courts handle economic disputes in Russia. Perhaps the best way to approach this discussion is with an examination of their jurisdiction to hear matters in the Russian Federation. As stated, the rules and principles that govern the arbitrazhnii courts are codified in the Arbitrazhnii Procedural Code ("APC") (pronounced Arbitrazhnii Protzessualnii Kodex, in Russian).

The arbitrazhnii courts have jurisdiction to hear cases concerning economic disputes and other disputes connected with entrepreneurial activity. Article 247 specifically mentions that cases with the participation of foreign parties does not bar the court from hearing the case.

The code enumerates the specific requirements that will satisfy jurisdiction. A litigant must satisfy the requirements of podvedomstvennost and podsudnost. Any party desiring to bring the claim to the arbitrazhnii courts must demonstrate that the court has "kompetenzia" to hear the case. Kompetenzia requires two sub-jurisdictional requirements: "Podevedomstvennost" is stated by Part (razdel) 1 Chapter 4 §1 of the APK. This section governs the types of claims such as economic dispudisputesputes between branches of government, between legal entities, and foreign parties. The second requirement, Podsudnost, found in Part 1, Chapter 4 §2 generally governs the doctrine which U.S. attorneys would most closely equate to venue requirements. This section also enumerates the claims which may be brought directly to the Supreme Arbitrazhnii Court in Moscow. Article 36 of §2, Chapter 4 allows the plaintiff to bring the claim in any court it desires as long as the personal jurisdiction requirements are satisfied. Article 38 gives exceptions to these articles.

Once the court believes that the matter satisfies the benchmark jurisdictional issues, they turn their attention to more jurisdictional requirements including:

Whether The defendant is located on the territory of the Russian Federation;
Whether a representative office, or branch of the foreign party is located in the RF;
Whether or if the dispute arose from an agreement whose execution must take place in the RF; and
A final catch-all clause exists any other occurrences in whose presence there is a tight Connection of the legal relations from the territory of the Russian Federation.

Generally, the plaintiff must bring the claim to the court in the jurisdiction of the defendant's residence or place of business. Parties may also bring claims under this section by an agreement executed in accordance with article 249 of the code, which allows the parties to bring disputes in courts under whose jurisdiction they would not be in any other context of the code. However, this section still requires that the dispute economic in nature, or be between commercial entities. Any such agreement must be in writing in order to bind the court.

Chapter 33 is titled "Particularities of Examining Cases with the Participation of a Foreign Party." This section essentially points out exceptions to the code which are applicable due to the participation of the foreign party. Perhaps the most important article under this heading provides that any cases with the participation of a foreign party are to be governed by the code unless an international agreement applies. The code mandates that should a foreign party participating in the case be outside the Russian Federation, the court may nonetheless proceed once it has documents that prove that the foreign party has received notice of the case. From the author's experience, the majority of these cases proceed without the foreign party ever appearing. Of course, these were cases where the amount in dispute was too low for their appearance to be practical.

Another important exception is the term during which the case must be decided is extended from two to six months. Finally, the code requires that the court leave a claim without action should it be proven that the case is proceeding before a court in another country.