BELARUS

Alexander Korobeinikov

A. LEGISLATION AND RULES

A.1      Legislation

International arbitration in Belarus continues to be governed by the Law on the International Arbitration Court[1] (International Arbitration Law), which was enacted on 9 July 1999.

This law is based on the UNCITRAL Model Law and, since its enactment, no significant amendments have been made.

In addition, the Economic Procedural Code, adopted on 15 December 1998, contains provisions relating to challenging and enforcing local and foreign arbitral awards.

Belarus is a party to a number of international and regional treaties that relate to arbitration proceedings, including the New York Convention, the European Convention 1961 and several CIS treaties.

Over the past year, the Belarusian Government has taken further steps to develop alternative dispute resolution (ADR).

In particular, under the amendments to the Law on Advocacy and Advocacy Activity in the Republic of Belarus adopted in July 2017, it was clarified that local advocates, as well as mediators, are allowed to act as arbitrators in international and domestic arbitrations.

In addition to that, in January 2018, the Belarusian Parliament adopted amendments to the Civil Procedural Code which, among other things, provide for the settlement of cases via mediation in appellate court proceedings.

Therefore, the Belarusian Government has taken significant steps for promoting ADR in the settlement of disputes between parties.

However, from the other side, the government is considering amendments to local laws that are supposed to increase state control over domestic arbitration courts. In particular, these amendments should, among other things, prohibit the use of so-called “pocket arbitration institutions” for the settlement of disputes by affiliated parties.

A.2      Institutions, rules and infrastructure

After the adoption of the Law on Domestic Arbitration Courts[2] in July 2011 (and the relevant sub-laws regulating the procedure of the establishment and registration of arbitration institutions), the number of arbitration institutions registered in Belarus significantly increased. There are currently more than 30 arbitration institutions, the oldest and most popular of which is the International Arbitration Court at the Belarusian Chamber of Commerce and Industry (IAC), which was established in 1994.

The IAC handles all types of commercial disputes between local and foreign companies, except disputes that are non-arbitrable under Belarusian law (e.g., disputes relating to rights over immovable property located in Belarus, privatization contracts, IP rights, etc.,). The IAC also reviews commercial disputes between local companies.

B. CASES

Belarusian court decisions are usually not publicly disclosed. Generally, Belarusian courts take an arbitration-friendly approach, although they have relatively limited experience in dealing with arbitration-related cases, which may lead to controversial court practice.

B.1 If the arbitration agreement does not contain the correct name of the arbitration institution, it may be viewed as non-enforceable.

In August 2019, the Supreme Court of the Republic of Belarus upheld lower court decisions that recognized the arbitration agreement between the parties as non-enforceable.

The position of the Belarusian courts was based on the fact that the arbitration agreement only consists of references to the “Arbitration Court of Riga City,” even if no such arbitration institution exists in Riga and more than 50 arbitration institutions have similar names.

Therefore, local courts decided that the arbitration agreement does not allow parties to determine the exact arbitration institution for the settlement of their disputes.

The above position of the Belarusian court is disputable as it contradicts provisions of the European Convention, which allows parties to determine the arbitration institution even if the arbitration agreement is ambiguous.

B 2. Belarusian courts took a conservative position in interpreting the scope of the arbitration agreement

In 2019, the Supreme Court of the Republic of Belarus upheld a conservative interpretation of the arbitration clause that referred all disputes arising out of the contract between parties to arbitration.

The Supreme Court decided that this clause does not cover claims relating to the collection of so-called “unjust enrichment,” (i.e., amounts received by the defendant without proper grounds) even if these amounts were paid within the framework of the contractual relations between parties.

Based on the above conclusion, the Supreme Court set aside the arbitration award. This decision is another example of a disputable and controversial local court practice which is not in line with the general pro-arbitration trend.

 

[1] Law of the Republic of Belarus No. 279-Z on the International Arbitration Court dated 9 July 1999 (as amended).

[2] Law of the Republic of Belarus No. 301-Z on Domestic Arbitration Courts dated 18 July 2011.