RF Supreme Commercial Court Does not Trust Arbitration Tribunals to Consider Disputes Arising from State Contracts, June 2014

Who needs to know:
Company directors and directors of corporate legal departments.

Why it is important:
When state contracts are signed and executed, there is always a risk that a dispute may arise with the state client. For many foreign and Russian companies, it has become common practice to include an arbitration clause in the text of state contracts, stipulating that disputes be considered by an internal arbitration tribunal or international commercial arbitration. However, in view of the legal position recently taken by the RF Supreme Commercial Court, disputes arising from state contracts will no longer be arbitrable.