12/06/2018 | Press release | Distributed by Public on 12/06/2018 21:00
Building magazine has published 'Legal: From Russia without love,' an article written by Akin Gump international arbitration partner Hamish Lal, which looks at a refusal by Russian courts to enforce an arbitration clause in an International Court of Arbitration standard form.
Lal writes that the decision by the Russian Supreme Court in a case involving a Luxembourg-based dredging and maritime management company and a Russian construction company, 'has placed enforceability in serious doubt,' with consequences that are 'significant.' Those who have 'the standard ICC arbitration clause in their contract, appointment or supply contract with a Russian party,' he writes, 'should consider amending it (and the standard arbitration clauses of any arbitral institution) to make it clear that all disputes shall be referred to arbitration and administered by a specific named arbitration institution as recorded in that institution's rules.'
Lal continues by observing that while the judgment from the Russian court 'does not set an automatic binding precedent under Russian law, it may well have a strong persuasive effect and perhaps indicate a Russian response to more recent geo-political issues and the sanctions.' This, he says, has caused concern within the arbitration world.
As a result, Lal advises that contractors and consultants on international projects think carefully and strategically about how they will get paid and where they would enforce an arbitration award if things go wrong.