Recent developments in Russian proceedings concerning international disputes

1. Recent developments in Russian proceedings concerning international disputes 17 October 2013 Dmitry KurochkinPartnerdmitry.kurochkin@dechert.com

2. Contents • Alternative arbitration clauses • Disputes among Russian companies in foreign arbitration courts • Waiver of the right to respond • Interim relief in support of foreign court proceedings • Jurisdictional agreements in favor of foreign courts

3. Alternative arbitration clauses • "CJSC Russian Telephone Company (RTC) v. Sony Ericsson Mobile Telecommunications Rus LLC" (2011-2013) • Dispute to be resolved by three arbitrators under the ICC Rules of Conciliation and Arbitration.Seat of arbitration: London. Sony Ericsson also had the right to apply to a court of competent jurisdiction. • RTC filed a claim with the Moscow Arbitrazh Court. During proceedings in the court of first instance, Sony Ericsson referred to the arbitration clause. The court dismissed the claim (RF APC, Art. 148). Appellate and cassation courts upheld the decision. The RF SAC revoked all judicial acts and remanded the case to the court of first instance for a new examination. • RF SAC: 'a dispute resolution agreement may not provide a party … to a contract with a unilateral right to apply to the competent state court and deprive the other party … of such a right. Should such an agreement be made, it is null and void for breaching the balance of the parties' rights'. • The courts proceeded to consider the dispute on its merits. RTC's claim was upheld by the courts of all three instances.

4. Disputes among Russian companies in foreign arbitration courts • Same as 'RTC v. Sony Ericsson' • Arbitration clause between CJSC and LLC to arbitrate before ICC in London • None of the courts of all four instances were confused! • Can a dispute between Russian companies be subject to foreign arbitration?

5. Waiver of the right to respond • The party did not challenge the arbitrator despite him having been repeatedly nominated by the counterparty in other disputes, which he disclosed (Circular Letter of the Presidium of the RF SAC No.156, Clause 11) • The party participated in the proceedings and did not challenge the jurisdiction of the Russian arbitrazh court before making the first statement on the merits of the dispute (Circular Letter of the Presidium of the RF SAC No.158, Clause 7)

6. Interim relief in support of foreign court proceedings • RF APC does not expressly provide such an option • Provides only for interim relief 'on the motion of a party to arbitral proceedings' • Circular Letter No.158 (Clause 30) – interim relief by a Russian court having 'effective jurisdiction'

7. Jurisdictional agreements in favor of foreign courts • Previously there was no statutory basis for a Russian court to refuse to consider a dispute despite the parties’ agreement subjecting it to the exclusive jurisdiction of a foreign court • Circular No. 158 (Clause 6) • Leaving a claim without consideration pursuant to clause 5, Part 1 of Art.148 of the RF APC by analogy • Except where the dispute is subject to the exclusive jurisdiction of the Russian court

8. Contacts Dechert Russia LLCul. Gasheka 7 str. 1123056 MoscowТ: +7 499 922 11 00F: +7 499 922 11 11www.dechert.com

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