Proceedings in cases of challenging decisions of arbitration...

Proceedings on disputes over decisions of arbitration courts

Chapter VII of the Law on Arbitration Courts provides for the possibility of challenging the decision of the arbitral tribunal. A similar rule is also contained in the Law on International Commercial Arbitration. However, the Civil Procedure Code of the RSFSR of 1964 and the Arbitration Procedural Code of the United States of 05.05.1995 No. 70-FZ, the mechanism for challenging decisions of arbitration courts and the procedure for reviewing these categories of cases in state courts did not provide for, which created significant problems in practice.

At present, with the adoption of the acting CCP and the AIC, the named normative gap has been eliminated, which resulted in the unification of the domestic legislation on arbitration proceedings.

The norms of the Law on International Commercial Arbitration and the Law on Arbitration Courts, the AIC and the CCP, providing for identical grounds for challenging and canceling the decision of the arbitration court, regulate also the procedure for dealing with cases of this category.

In accordance with Art. 418 CCP, the decision of the arbitration court adopted in the territory of the United States can be challenged by the parties to the arbitration proceedings by filing an application for its cancellation to the court in whose territory it was adopted. In this case, it is necessary to take into account the norm of Art. 40 of the Law on Arbitration Courts, according to which the decision of the arbitral tribunal can be contested only if its finality is imperatively not fixed by the parties to the arbitration proceedings in the agreement on the arbitration court. If the parties to the arbitration proceedings have reached an agreement on the finality of the future decision of the arbitral tribunal and recorded it in the agreement on the arbitration court, such a decision is not subject to challenge.

The interested party to the arbitration proceedings - the applicant (or his duly authorized representative) may file an application for cancellation of the decision of the arbitral tribunal within three months from the date of receipt of the impugned decision, paid by state duty in accordance with sub. 13 p. 1 of Art. 333.19 NC in the amount of 1.5 thousand rubles.

The application for cancellation of the decision of the arbitration court is submitted in writing. In it in accordance with the requirements of Art. 419 CCPs should contain:

- the name of the court in which it is served;

- the name of the arbitration court that made the decision;

- name and coordinates of the applicant and the party to the arbitration proceedings;

- date and place of adoption of the impugned decision;

- the date the applicant received the impugned decision.

If the decision of the arbitration court is taken in a city that has an administrative-territorial division into districts, the application for its cancellation, along with the city name, must also specify the name of the district on whose territory the decision was adopted. This requirement is determined by the fact contained in Part 2 of Art. 418 CCP by the norm on determining the territorial jurisdiction of this category of cases to specific regional courts, depending on the place of decision.

Specifying the date of receipt of the decision of the arbitration court by the applicant is of significant importance, since it begins with calculating the three-month time limit for its challenge.

In the descriptive part of the application for the cancellation of the decision of the arbitral tribunal, the applicant must set out the grounds for its repeal, the exhaustive list of which is contained in Art. 421 CCP, as well as the reasoning behind the existence of these grounds. No other grounds for canceling the decision of the arbitral tribunal (for example, its groundlessness, lack of evidence, etc.) can not be indicated and taken into account.

To the application for cancellation of the decision of the arbitration court, documents specified in Part 3 of Art. 419 CCP.

In the event of non-compliance by the applicant with any requirements of Art. 419 ГПК the judge taking into account their character has the right to return the application under the rules of art. 135 ГПК or leave it without movement under the rules of art. 136 GPC.

Subject to all legal requirements, the judge in accordance with Part 1 of Art. 420 ГПК single-handedly considers the application on cancellation of the decision of the arbitration court within a month from the date of its receipt. As V. M. Zhuikov rightly notes, the judge of the competent court checks only the compliance of the arbitral tribunal with procedural matters and has the right to cancel the decision of the arbitration court solely on the grounds established in the law.

In the process of preparing the case for trial, the judge, at the request of the applicant and the parties to the arbitral proceedings, has the right to demand from the arbitral tribunal the materials of the case, the decision on which is being challenged. Some authors (E.V. Kudryavtsev) note that this requirement should not be interpreted too literally and unambiguously, otherwise the request for materials from the arbitral tribunal will be virtually impossible. However, as follows from the content of Part 2 of Art. 420 ГПК, this rule is mandatory and, consequently, the judge can not claim the materials of the case from the arbitral tribunal at the request of only the applicant or the party to the arbitration proceedings. Many authors (EA Vinogradova, TN Neshataeva, VV Yarkov) rightly point out that such a right for a court arises only if there is a petition of both parties.

It should be noted that:

- only the judge of the competent district court, considering the case on cancellation of the decision of the arbitration court, has the right to demand from the arbitral tribunal the materials of the case itself;

- the reclamation of the case materials from the arbitration court is possible only at the stage of preparing the case for trial and is inadmissible directly during the trial;

- the judge can not, by his own will, claim from the arbitral tribunal the case materials, since the initiative of such an action is the sole prerogative of the parties to the arbitration proceedings;

- the right to demand the materials of the case from an arbitration court from a judge of the competent court arises in the only case - if there is a mutual petition of the parties to the arbitration proceedings on this matter. It seems that such a request must be made in writing or recorded in the record of the court session. The application of one of the parties to the arbitration proceedings on the demand for the materials of the case from the arbitral tribunal (without consent or with the objection of the other party) can not be regarded as the basis for such an action.

When demanding the materials of the case from an arbitration court, one should take into account the fact that this is permissible only with reference to the procedure for reclamation of the case materials from a permanent arbitration court, since the ad hoc arbitration court in accordance with Cl. 39 of the Law on Arbitration Courts, after taking a decision within a month, sends it along with the case file for storage to the competent court. Thus, the norms of the Code of Civil Procedure do not provide for the possibility of demanding the materials of an ad hoc arbitration court case.

The applicant and the party to the arbitral proceedings are duly notified of the time and place of the hearing, but their failure to appear does not prevent the case from being considered.

A specific feature of considering this category of civil cases (as well as cases of issuing an enforcement order for the enforcement of an arbitral award) is the principle of confidentiality enshrined in the Arbitration Courts Act.

It is caused by the following:

1) in accordance with Part 1 of Art. 1 Civil Procedure Procedure in the federal courts of general jurisdiction is defined along with other sources and federal laws;

2) in part 3 of Art. 1 ГПК it is noted that civil legal proceedings are conducted in accordance with federal laws that are in force for the consideration and resolution of civil cases;

3) in part 2 of Art. 10 ГПК it is directly specified, that proceeding in the closed hearings is carried out on affairs if it is directly stipulated by the federal law.

In all three of these cases, we have in mind, among other things, the Law on Arbitration Courts, which is currently in effect.

Thus, the court, considering applications for the cancellation of the decision of the arbitral tribunal (or on issuing an enforcement order for its enforcement), should be guided by the provisions of the Law on Arbitration Courts, which establish the principle of confidentiality, and conduct a hearing in a closed court session. A similar point of view is occupied by EV Kudryavtseva, SA Kurochkin and other scientists.

In the course of the court session, by examining the evidence provided, the presence or absence of grounds for canceling the decision of the arbitration court is established.

The grounds, in the presence of which the court cancels the decision of the arbitration court, are fixed in an imperative form in art. 421 ГПК and in art. 42 of the said Law. When considering a case on an application for cancellation of an arbitral award, a judge of a district court may establish only the presence or absence of such grounds. This circumstance is extremely significant, since:

- does not allow the judge of the competent court to go beyond the limits specified in the Law on Arbitration Courts, interfere with the activities of the arbitration court;

- make an independent reassessment of the evidence used in the arbitration proceedings;

- to revise essentially the decision of the arbitration court or the case itself (this circumstance is also indicated by the Federal Arbitration Court of the North-West District in its decision of 09.01.2003 in case No. A56-30789/02: current legislation does not provide for the possibility of interference of state courts in activity of arbitration courts).

All grounds for canceling the decision of the arbitral tribunal can be conditionally divided into two groups: the grounds for which the applicant is required to prove, and grounds that do not require special proof by the applicant.

To First group are:

1) the invalidity of the agreement on the arbitration court on the grounds provided for by the federal law (clause 1, part 2, article 421 of the Civil Procedure Code).

When applying this basis, it is first of all necessary to take into account the norm of Art. 7 of the Law on Arbitration Courts, according to which invalidation should be understood as non-compliance with the written form when concluding an agreement on an arbitration court. In addition, to resolve the issue of invalidity of the agreement on arbitration, it is necessary to verify whether it meets the requirements provided for by civil law in relation to transactions (see § 2 of Chapter 9 of the Civil Code), such as: is it incapable of incapacitation (Article 171 GK) or limited in capacity (Article 176 GK), under the influence of deceit, violence or threat (Article 179 GK), under the influence of error (Article 178 GK), etc.,

2) failure to properly notify the parties to the arbitral proceedings of the election or appointment of arbitrators or to review the case in an arbitration court, including the time and place of the arbitral tribunal, as well as cases where the party could not, for other valid reasons, present to the arbitral tribunal to the court the explanations (item 2 of item 2 of item 421 ГПК).

In accordance with paragraphs 1 and 2 of Art. 10 of the Law on Arbitration Courts, the composition of the arbitral tribunal in a standing arbitration court can be formed in various ways: a) by choosing arbitrators as the parties to a disputable legal relationship; b) by appointment by the management of the arbitral tribunal; c) by appointment of arbitrators by the management of the arbitration court in case of failure to exercise their election as a disputable legal relationship between the parties. In this regard, along with other evidence of the grounds for canceling the decision of the arbitral tribunal, it is necessary to provide the court with the rules of a permanent arbitration court (or a fixed agreement of the parties on the above issues when considering the case in an ad hoc arbitration court). This is due to the fact that it is in these documents and only in them that the order of formation of the composition of the arbitration court will be contained and, therefore, only through their investigation, it will be possible to establish the legitimacy of the order of formation of the composition of the arbitral tribunal, whose decision is contested.

Under other valid excuses it is necessary to understand such circumstances that do not depend on the will or behavior of the party that has taken all possible measures to provide its explanations to the arbitral tribunal. As an illustration of "other valid reasons", in our opinion, one can cite an example where arbitrators were denied oral hearings, as a result of which the parties were deprived of the opportunity to present their explanations to the arbitral tribunal, which was subsequently reasonably interpreted by a competent court as a violation of the right to represent his position (B. R. Karabelnikov);

3) the facts of the arbitration court's decision on a dispute not provided for by the agreement on the arbitration court or not falling under its terms, as well as cases of taking decisions on issues that go beyond the agreement on the arbitration court (Section 3, Part 2, Art. 421 CCP).

These grounds can be combined with a single concept - the lack of an agreement on an arbitration court, since in fact the arbitral tribunal decided on issues in respect of which the parties did not agree on their resolution in the arbitration court. As evidence of this ground for canceling the decision of the arbitral tribunal, an agreement on the arbitration court (an arbitration agreement together with the contract to which it applies or a document containing an arbitration clause) should be submitted, from which it will be seen which disputes the parties agreed to refer to the arbitration court, which arbitration court, as well as the decision of the arbitral tribunal itself, by comparing the resolutive part of which with the agreement on the arbitration court it will be possible to make an appearance etc. on the presence or absence of the commented base.

If it is possible to divide the decision of the arbitral tribunal on issues falling under the agreement on the arbitration court from issues not covered by this agreement, the judge of the competent court may cancel the contested decision of the arbitral tribunal only in the part containing decisions on issues not covered by the arbitration agreement court;

4) cases of inconsistency of the composition of the arbitral tribunal or the procedure of arbitration proceedings to the agreement of the parties or to the federal law (paragraph 4, part 2 of Article 421 of the Civil Procedure Code).

When applying this ground to cancel the decision of the arbitral tribunal, it is necessary to take into account the norms of Ch. III and V of the Law on Arbitration Courts, which respectively established the procedure for the formation of the composition of the arbitral tribunal and the requirements for arbitrators, as well as the mechanism for considering the case in an arbitration court.

Particular difficulty in practice is the question of who exactly has the right to be an arbitrator, which is due to the almost mass participation in arbitration proceedings, in particular, notaries, lawyers, etc.

In paragraph 7 of Art. 8 of the Law on Arbitration Courts requires that "an arbitrator can not be an individual who, in accordance with his official status, as defined by federal law, can not be elected (appointed) by an arbitrator". This positive norm, which was absent in the earlier legislation on arbitration proceedings, is extremely necessary and is aimed at the unification of domestic legislation.

However, the very formulation of the item being analyzed, being a reference, appears to be unclassified and undeveloped, creating real prerequisites for its various interpretations.

1. In modern domestic legislation, regulating the impossibility of performing a particular job by different categories of citizens due to their official status, only in clause 3 of Art. 3 of the Federal Law "On the Status of Judges in the United States" contains an imperative indication that the judge is not entitled to be an arbitrator. In no other normative acts such restrictions are not fixed. Thus, it may seem that any person whose official status is not covered by this law (including lawyers) can perform the duties of arbitrators.

2. The Presidium of the Supreme Arbitration Court of the United States in its decision of 31.03.2009 in case No. 17412/08 indicated that if the law regulating advocacy does not contain an imperative prohibition on performing the functions of an arbitrator, lawyer, has the right to fulfill them. Such an approach could be accepted, but then it automatically turns out that state and municipal employees of any rank, notaries, prosecutors and leading employees of courier services can also perform the duties of arbitrators, and this, at least, is nonsense.

3. In the legislation regulating the official status of lawyers, as well as other officials listed above, there is really no direct prohibition on the performance by these persons of the functions of the arbitrator. However, they can not engage in any other work, except for the basic professional activity. The norms of the relevant laws contain wording that these officials "can not engage in entrepreneurial, other paid activities, except for teaching, scientific and other creative activities", "not entitled to engage in any activity related to the receipt of income other than scientific and teaching and the like.

Actually, these instructions consist of two interrelated parts: 1) the specified persons can engage in (except for the main job) on a fee-based basis scientific, teaching and other creative activities, but the activity of the arbitrator can in no way be attributed to any of the admissible types of activities; 2) any other (except for the main) paid activity by these categories of persons can not be performed, but the activity of the arbitrator is a paid activity.

This conclusion is supported by the fact that in paragraph 1 of Art. 15 of the Law on Arbitration Courts among costs related to the resolution of a dispute in an arbitration court, in the first place is the fee of arbitrators. In clause 3-5 of the same article, the mechanism for calculating the arbitrator's fee for the consideration of a specific case is described in detail. A similar approach to the issue of remuneration of labor of arbitrators is contained in all the provisions and regulations of the permanent arbitration courts of our country without exception.

4. The Supreme Arbitration Court of the United States in the said decision, along with the absence of a direct regulatory prohibition on the performance by a lawyer of the duties of an arbitrator, motivated his position by the fact that a lawyer can perform the functions of an arbitrator if not connected by client relations with one of the parties to a disputable legal relationship. However, this is already a different basis for the impossibility of performing the functions of an arbitrator, which equally applies to any arbitrator - a violation of the principle of independence and impartiality of arbitrators set forth in Art. 18 of the Law on Arbitration Courts.

5. The position of the Supreme Arbitration Court of the United States is not only unreasonable, but extremely inconsistent. Thus, the Supreme Arbitration Court of the United States in paragraph 25 of the information letter No. 96 of 22 December 2005, without any motivation, drew the attention of lower-level arbitration courts to the fact that a person replacing a civil servant in a judicial body (not subject to the Federal Law " , On the status of judges in the United States "), is also not entitled to perform the duties of an arbitrator.

The Federal Arbitration Court of the Moscow District, in turn, in one of the cases concluded that the notary (although there are no direct legislative prohibitions on him to be an arbitrator also), by virtue of the Law on Arbitration Courts, is not entitled to exercise functions of the arbitrator (see the decision of the Federal Arbitration Court of the Moscow District of 03.07.2006 in case No. KG-A41/5942-06).

Thus, the Supreme Arbitration Court of the United States considers, on the one hand, that only persons subject to the direct effect of the Federal Law "On the Status of Judges in the United States" can not be arbitrators, and all others can, if not depending on the party of the disputable legal relationship; on the other - that persons who are not covered by the said Law can not also be arbitrators.

If the applicant has any of the listed grounds, the decision taken by the arbitration court is subject to cancellation.

To second group are:

1) the dispute, considered by the arbitration court, in accordance with the federal law could not at all be the subject of arbitration proceedings (clause 1, part 3, article 421 of the CCP).

Currently, the current US law does not contain any direct prohibitions on consideration of any types of disputable legal relations in arbitration courts in any normative act (except for cases of mandatory fixation of issues of jurisdiction, for example, in Article 6 of the Federal Law of October 26, 2002 No. 127-FZ "On insolvency (bankruptcy)"), and as a general rule, what is not prohibited by law is permitted. Thus, this basis is difficult to apply in practice. The only, in our opinion, possible case of its application may be the interpretation in the narrow sense of the norm of paragraph 2 of Art. 1 of the Law on Arbitration Courts. It stipulates that any dispute arising out of civil legal relations can be transferred to the arbitration court by agreement of the parties to the arbitration proceedings, and the CCP in a number of articles (see, for example, Article 2, item 1, part 1, article 22) delimits civil relations from labor, family, housing, land, environmental, etc., while emphasizing that only a dispute from civil relations can be transferred to an arbitral tribunal by agreement of the parties, unless otherwise established by federal law (see Part 3 of Article 3 of the GP ).

As a result of this logical construction it turns out that in an arbitration court only disputes from civil in the narrow sense of the word of legal relations can be the subject of the proceedings, as a result of which the decision of the arbitration court on a dispute from any other legal relationship is illegal and must be abolished.

However, this is not entirely true, since a number of normative acts regulating non-civil legal relations in the narrow sense of the word, nevertheless directly provide for the possibility of their resolution in the arbitration court (see, for example, the current versions of the KVVT - Article 128, 129, 138, KTM - Articles 342, 343, 352, etc.).

Thus, when applying the commented reason for canceling the decision of the arbitral tribunal, it is necessary to establish the following: a) from which legal relations the dispute was considered by the arbitral tribunal; b) if not from the civil in the narrow sense of the word, then does the law regulating the data of legal relations allow the possibility of considering such a dispute in an arbitration court. Otherwise, for this reason, the decision of the arbitration court can not be revoked;

2) the decision of the arbitration court violates the fundamental principles of United States law (clause 2, part 3, article 421 of the CCP).

The list of fundamental principles of United States law in domestic normative acts as such is not directly fixed. However, the theory of law includes the following principles: social justice, equality of citizens, the unity of rights and duties, humanism, a combination of persuasion and coercion, and some others, i.e. in fact, the principles that found their consolidation in a general form in the Constitution (see, in particular, Articles 17, 19, 21, 23, 26, 34-36 and other Constitutions).

Thus, when determining whether or not the impugned decision of the arbitral tribunal violates the fundamental principles of United States law, it should be based on the comparison and conformity of the contents of the decision with constitutional principles. As rightly noted in the decision of the Federal Arbitration Court of the North-West District of 16.01.2003 in case No. A56-33172/02, the competence of the state court considering the application to annul the decision of the arbitration court is not to verify the correctness of the application by the arbitral tribunal of substantive law, but compliance with the fundamental principles of law, i.e. its basic principles, which have a universality, a higher imperative and a special universality.

These two grounds do not require special proof by the applicant. Verification of their availability is the responsibility of the legislator to the court, in the positive case they are the unconditional ground for canceling the decision of the arbitration court.

Based on the results of the consideration of the case on challenging the decision of the arbitral tribunal and examining the evidence submitted, the judge in the advisory room passes a ruling on refusal to cancel the arbitration award or to cancel it.

In the definition, along with the usual information provided for in Art. 225 GPC, in accordance with Part 2 of Art. 422 GPC should contain:

- information about the disputed decision of the arbitration court and the place of its adoption;

- the name and composition of the arbitration court that adopted the impugned decision;

- the name of the parties to the arbitral proceedings, indicating their procedural status, as well as their place of residence and (or) location;

- an indication of the cancellation of the decision of the arbitration court in full or in part or for refusal to abolish it. In the case of a ruling on partial cancellation of a decision of an arbitration court, the judge must specify which conclusions of the arbitral tribunal he cancels (separating them from those conclusions of the arbitral tribunal for which he refuses in cancellation) with the justification of the reasons for which he came to such a conviction.

This definition can be appealed by the applicant or the party to the arbitration proceedings to a higher authority (the court of the subject of the United States) within 15 days of the general rules of civil proceedings.

The legal consequences of the cancellation of the decision of the arbitration court are directly dependent on the regulatory grounds that led to it. In part 4 of Art. 422 of the CCP contains an indication that if the decision of the arbitration court is revoked on the grounds provided for in Clauses 1 and 3 of Part 2 of Art. 421 CCP, the parties to the arbitral proceedings for resolving the dispute may apply to the court under the general rules of civil proceedings. A similar norm is also contained in Art. 43 of the Law on Arbitration Courts. In all other cases of cancellation of the decision of the arbitration court of the party to the arbitration proceedings, in accordance with Part 3 of Art. 422 ГПК, has the right to appeal again to the arbitration court if such a possibility is not lost. Thus, from the analysis of Art. 422 CCP follows that in case of cancellation of the decision of the arbitration court and for reasons provided for by Part 3 of Art. 421 of the CCP, the parties to the arbitration proceedings may re-apply to the arbitral tribunal to resolve the dispute, which directly contradicts the grounds contained therein. In our opinion, even with the cancellation of the decision of the arbitration court for reasons stipulated in Part 3 of Art. 421 CCP, parties to the arbitration proceedings must act in accordance with the procedure provided for by Part 4 of Art. 422 GPC, i.e. to go to court, but not to arbitration.

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