Post by Sergey Usoskin FCIArb

Russian court refers parties to LMAA arbitration In the era of Lugovoy law-based jurisdiction the decision of Nizny Novgorod Commercial Court may appear surprising. At first. AAS Amur Assets Shipping Company (Cyprus) commenced proceedings before the court seeking RUR 409 mln in past due hire payments under 15 BIMCO BARECON form charters for tugs and barges entered into with Nizhegorodskaya Logistics Company LLC. The respondent asked the court to dismiss proceedings and refer parties to LMAA arbitration provided in the charters. The court sided with the respondent finding that (a) the arbitration clause was clear enough even though it provided for LMAA arbitration only choosing para 30(a) option of the BARECON 2001 form. (b) the claimant failed to establish conditions for application of Art 248.1 APC, i.e. that any of the parties to the contract was sanctioned or that the claimant, a company incorporated in Cyprus, faced any obstacles in accessing the selected forum. In this area - Russian proceedings commenced by foreign claimants - the Russian courts' practice is mixed. In many cases, Russian courts point to the fact that foreign claimants retain access to foreign fora and should proceed there. In few others, Russian courts agree with claimants that the Russian respondent would face obstacles in the foreign forum so the litigation should proceed in Russia. The real question is whether the foreign award obtained by the foreign claimant would be enforceable in Russia. The line of cases created by Supreme Court's Thywissen decision suggests that an arbitration seated in an unfriendly jurisdiction, administered by an institution registered there or including unfriendly states nationals as arbitrations should be presumed to lack impartiality. To date, no claimant referred to such arbitration "returned" to Russia to enforce the resulting award so it remains to be seen what the outcome in the outcome in the enforcement proceedings would look like and whether the claimant would be able to argue estoppel or bad faith against any objections to enforcement from the respondent.