By: Alexander Korobeinikov1Alexander Korobeinikov is a senior associate in Baker & McKenzie’s Almaty office and a member of the Firm’s International Arbitration Practice Group.
A. Legislation, Trends and Tendencies
A.1 Legislation
International arbitration in Belarus continues to be governed by the Law on the International Arbitration Court2The Law of the Republic of Belarus on the International Arbitration Court No. 279-Z dated 9 July 1999 (as amended). (the “International Arbitration Law”), which was enacted on 9 July 1999. The law is based on the UNCITRAL Model Law, and since its enactment, no significant amendments have been made to it. In addition, the Economic Procedural Code adopted on 15 December 1998 contains provisions relating to challenging and enforcing local and foreign arbitral awards.
In December 2014, the Plenary Session of the Supreme Court of the Republic of Belarus issued Resolution No. 18 On Application by Courts of Legislation on Recognition and Enforcement of Foreign Judgments and Arbitral Awards3Under Belarusian law, Resolutions of the Plenary Session of the Supreme Court are a part of local laws and are mandatory for local courts. (the “Resolution”).
Among other things, this Resolution provided guidelines for the enforcement of foreign arbitral awards by commercial courts and common courts.4In Belarus, commercial courts act as courts of first instance and appellate courts for reviewing commercial disputes, and these proceedings are governed by the Commercial Procedural Code. Common courts review noncommercial civil cases and criminal cases, and their proceedings are regulated by the Civil Procedure Code or the Criminal Procedure Code accordingly. In particular, it clarified that the three-year limitation period for the enforcement of foreign judgments or arbitral awards (which is set forth in the local Commercial Procedural and Civil Procedural Codes) does not apply to cases where parties seek the enforcement of arbitral awards under the New York Convention 1958, because this Convention does not provide any limitation period for enforcement.
A.2 Trends and Tendencies
The Belarusian government continues to take measures to attract foreign investors to Belarus. In this regard, the Belarusian Parliament is considering a draft Law on Public-Private Partnership, which will set forth rules for cooperation between investors and the state on infrastructure projects.
Among other guarantees provided in this law for investors, it will allow foreign investors to settle their disputes with their state partners in arbitration under UNCITRAL Arbitration Rules or the ICSID Convention unless: (i) otherwise agreed by foreign investors and their state partners; or (ii) disputes are covered by the exclusive jurisdiction of the Belarusian state courts.
This law passed the lower chamber of the Belarusian parliament in 2015 and is therefore expected to be adopted at the beginning of 2016. If the final version of the law keeps these dispute resolution provisions, it will be a significant improvement of the investment climate in Belarus.
B. Cases
Belarusian court decisions are not publicly disclosed. Therefore, we are not aware of any significant court decisions in Belarus in relation to arbitration in the last year. However, Belarusian courts usually take an arbitration-friendly approach, though they have comparatively limited experience in dealing with arbitration-related cases.
C. Costs in International Arbitration
C.1 Allocation of Costs
Under Article 15 of the International Arbitration Law, issues relating to allocation and recovery of arbitration costs should be addressed in applicable arbitration rules or an ad hoc arbitration agreement between the parties to the dispute.
In line with the Arbitration Rules of the oldest and most famous international arbitration institution of the Republic of Belarus, the International Arbitration Court at the Belarusian Chamber of Commerce and Industry (“IAC Arbitration Rules”), generally, the Tribunal should allocate costs between parties in proportion to claims that were granted or declined by the Tribunal. However, the Tribunal may grant a claim by a party for reimbursement of its costs regardless of the result of the case if these costs are caused by the mala fide behavior of another party.
C.2 Security for Costs
Neither the International Arbitration Law nor the IAC Arbitration Rules contain any special provisions relating to security for costs. Nevertheless, if costs are included in the total amount of the claim, a party has a right to seek interim measures to secure its costs, along with security for the main claim.
C.3 Recovery of Costs
As already stated, issues relating to the recovery of costs are regulated by the applicable arbitration rules or the agreement between parties to ad hoc arbitration.
Under the general provisions of the IAC Arbitration Rules, the Tribunal has a right to order the recovery of parties’ reasonable, actually paid costs, including representation costs, in proportion to granted or declined claims.
While this issue is not addressed in the Arbitration Rules, local arbitrators usually do not consider costs of a party’s in-house counsel and other members of a party’s staff as recoverable, except travel and accommodation expenses.
The IAC Arbitration Rules do not set forth any limits or guidelines for the determination of the amount of representation costs that can be recovered by parties. Therefore, these issues are settled by an arbitral tribunal on its own discretion based on the reasonableness and necessity of such costs. In practice, local arbitrators are reluctant to order the full recovery of legal fees charged by international law firms. The amount of costs should be proved by relevant evidence, such as engagement agreements, invoices, bank statements, etc.