Analytics Publications

The new Procedural Rules of the Maritime Arbitration Commission came into force on January 1 2007, replacing rules which had been in force since 1982. The commission, which has existed since 1930, has the status of a permanent arbitration tribunal under the Law on International Commercial Arbitration and has competence to consider cases relating to maritime law. The new rules apply to disputes submitted for resolution after January 1 2007, unless the parties agree otherwise. This update summarizes the main features of the commission's dispute resolution procedure.

Jurisdiction

The commission acts under the jurisdiction of the Russian Chamber of Trade and Commerce and considers claims involving both Russian and foreign companies arising out of contracts or other relations in areas of maritime law, including:

• chartering and cargo carriage, whether by sea or in mixed navigation (eg, carriage by sea and river);
• sea towage;
• marine insurance and reinsurance;
• ship sale and purchase, hypotheque and repairs;
• pilotage and icebreaker assistance, agency services and other related services;
• the use of vessels for scientific research, the extraction of minerals and hydrotechnical and other operations;
• salvage;
• the raising of sunken vessels and other property;
• collisions and damage to port installations, navigation signs and similar objects; and
• damage to fishing nets and gear and other damage caused in relation to commercial fishing.

The chairman of the commission is entitled to grant preliminary security measures, such as the arrest of a vessel or cargo in a Russian port.

The commission accepts claims for consideration if an agreement between the parties can be shown to exist. The rules do not specify whether such an agreement must be in writing, but the law requires that arbitration agreements be made in writing, either in the form of a single document signed by all parties or by an exchange of documents. The commission's previous practice will no doubt continue to be observed: a case in which a party submits a claim to the commission and the other party does not dispute the commission's jurisdiction will be taken to fall within its competence. The question of whether the commission has competence to consider the subject matter of the dispute will be resolved by the arbitrators considering the case.

Statements of Claim

Proceedings are opened by the submission of a statement of claim.

A statement of claim must include:

• the names and addresses of the parties;
• the particulars of the claim, including the sum at issue;
• the claimant's signature;
• a substantiation of the commission's competence to consider the claim;
• a statement of the facts of the claim;
• the name of the arbitrator chosen by the claimant or a request to the chairman to appoint an arbitrator;
• a list of the documents accompanying the statement;
• proof of payment of the arbitration fees; and
• a document confirming the signatory's authority to act for the claimant (ie, power of attorney).

The parties may appear at the arbitration or be represented by duly authorized parties. Russian law states that a document conferring power of attorney must bear the date of issue and is valid for three years fr om that date.

All documents submitted to the commission in substantiation of the claim must be provided in Russian, in the language of the contract originally concluded between the parties or in the language in which the parties corresponded. Written evidence must be provided in its original form or as a duly certified copy; the arbitrators may demand a translation of such evidence if they consider this appropriate. Sufficient copies of all documents must be supplied to allow the commission to distribute them among the arbitrators and the other parties as appropriate, unless it can be shown that the parties have already received such copies. Statements of claim, defence submissions and notifications of hearings, awards and other rulings must be sent by recorded mail. All other documents may be sent by ordinary mail.

On receiving the statement of claim, the commission informs the defendant and forwards copies of all relevant documents, unless such documents have already been sent by the claimant. The commission asks the defendant to provide submissions within 30 days of receipt of the notification.

Appointment of Arbitrators

The commission has a list of 25 arbitrators, all of whom are recognized maritime law specialists. Arbitrators are nominated to the list for five years. Individuals not on the list may be appointed as arbitrators, unless they are otherwise ineligible for reasons stated in the rules. The chairman is elected by the arbitrators to represent the commission in Russia and abroad.

The claimant may either appoint an arbitrator or ask the chairman to do so. The defendant must appoint an arbitrator within 30 days of receiving notification or ask the chairman to do so. The parties are free to choose reserve arbitrators. If the choice of an arbitrator is delegated to the chairman, he or she must choose from the listed arbitrators.

Cases are usually considered by two arbitrators. If the arbitrators are unable to agree, they have 10 days in which to choose a third arbitrator to chair the arbitration tribunal. The third arbitrator may be chosen from among the listed arbitrators or, if the parties so agree, may be an unlisted expert. Alternatively, the parties may agree to ask a single arbitrator to take sole responsibility for resolving the dispute. If the parties or arbitrators are unable to agree on a sole arbitrator or chairman of the arbitration tribunal, or if more than one party nominates the same arbitrator, the chairman takes responsibility for the appointment.

Hearings

The parties must be informed of the date of the hearing at least 30 days in advance, although this period may be shortened by mutual agreement. The hearing is confidential and persons not involved in the dispute may not attend without the permission of all parties.

If one of the parties is not represented or in attendance, the hearing may still proceed, provided that the party was properly informed of the hearing and no application for postponement on valid grounds has been received.

As a rule, hearings are conducted in Russian, but the parties may agree to designate another language.

The parties may agree that the dispute be resolved on the basis of written evidence only. An oral hearing can be initiated by the arbitrators if they consider the written evidence insufficient.

Awards

The award is decided in closed session and announced once the arbitrators have completed their deliberation. The award and the arbitrators' reasons must be forwarded to the parties within 30 days of the final hearing. This period may be extended by the chairman if necessary.

The award must be rendered in writing, signed by the arbitration tribunal and certified with the commission's stamp. The award must mention:

• the place of arbitration;
• the date(s) of the hearing;
• the names of the arbitrators;
• the circumstances of the case and the reasons for the decision;
• the tribunal's decision either to satisfy or to reject the claim in whole or in part; and
• the arbitration fees and costs and their apportionment between the parties.

The date of the award is the date on which the last member of the tribunal signs it.

Once notified, the parties have 30 days in which to ask the commission to correct any misprints, calculation errors or other mistakes. The commission must make reasonable amendments within 30 days of receiving the request. The tribunal may also amend the award on its own initiative up to 30 days after sending notification to the parties.

Enforcement

Unless executed voluntarily within the stated period, the award is subject to compulsory execution in accordance with the Russian regulations. The claimant must apply to the state arbitration court at the place wh ere either the debtor or its assets are located in order to obtain an execution list, which must be presented to the court bailiff. An award may be enforced up to three years after coming into force.

Fees

Arbitration fees must be paid by the claimant when submitting the statement of claim. The fees due are equal to 3% of the claim, but may not be less than Rb45,000 if the claim is made in roubles or $1,500 if the claim is made in another currency. The commission has discretion to increase its fees depending on the complexity of the case.

Depending on the currency of the claim, the fees are payable in either roubles or US dollars. All currencies other than dollars must be converted into dollars at the Central Bank of Russia rate on the date of payment, although claimants may be allowed to arrange payment in a different currency.

The fees will be reduced:

• by 20% if the dispute is resolved by a single arbitrator;
• by 25% if the proceedings are discontinued at the first hearing before an award is rendered; and
• by 50% if the proceedings are discontinued because the claimant recalls the statement of claim or the parties refuse to begin proceedings.

The fees are paid by the losing party. If the claim is satisfied in part, the fees are paid proportionally by the parties. An application for security measures must be accompanied by a non-refundable fee of $500, payable in dollars or roubles. Amounts are considered paid on the date on which the full sum is credited to the Chamber of Commerce and Industry's bank account. The payer is liable for all bank charges.