the St. petersburg international commercial arbitration court:

 A tool to protect foreign business IN St. petersburg

The St. Petersburg International Commercial Arbitration Court (SPICAC) started operations in St. Petersburg in the beginning of 1997. In this time, the Court has decided several commercial disputes with American, German and joint-venture companies.

SPICAC • was begun by the Foundation for Protection of Investments, a non-commercial organization founded in 1995 by the city of St. Petersburg. The Yakovlev Administration supported the Foundation as part of its general plan to serve the genuine interests of the city by creating favourable conditions for foreign investment.

The St. Petersburg International Commercial Arbitration Court was established through the joint efforts of the Foundation for Protection of Investment, the Chairman of the Legal Committee of St. Petersburg, Mr. Dmitri Kozak, American lawyer Mr. Arthur L. George, until recently the head of the St. Petersburg office of Baker & McKenzie, SPIBA members and the Moscow office of USAID, which secured financing for the Court operation. Presently, SPICAC is enjoying the active support from the American Bar Association (ABA).

Due to active assistance from both the International and local organizations and the city authorities, St. Petersburg has received an effective and reliable international arbitration court, which serves as a new tool to protect and to support international investment and foreign trade in the city. Now, parties to a dispute do not have to go to Moscow or to Stockholm. Resolution of disputes is less costly and more efficient as most evidence and witnesses are located where the disputes arise.

The Court conducts arbitrations pursuant to the 1993 Russian Law on International Commercial Arbitration, which conforms with the arbitration rules of the United Nations Commission on International Trade Law ("UNCITRAL").

If compared with the State Arbitration Court, the main advantages of the International Commercial Arbitration Court are essentially the following:

1. More efficient. No multi-instance system.

2. Confidentiality of disputes.

3. Greater flexibility in the choice of arbitrators and, consequently, more trust to the arbitrators as they are appointed by the disputing parties themselves. The list of arbitrators contains well-known Russian lawyers as well as lawyers from Austria, the United Kingdom, the USA, Germany and other countries. Many of the' foreign arbitrators on the list are fluent in Russian and are experienced in Russian law.

4. Arbitral awards of the Court are enforceable both within and outside Russia pursuant to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitration Awards, to which Russia is a party.

5. Arbitral awards of the Court may be challenged in a very limited number of cases within the existing legislation.

The President of SPICAC is appointed by the Supervisory Board of the Foundation for Protection of Investments, which consists of city officials and independent legal specialists. In 1997, Mr. Alexander Sergeev, the Head of the Civil Law Department of the St. Petersburg State University, was appointed to the position.

In order to resolve disputes at the Court of Arbitration, the contracting parties must include an arbitration clause when concluding their contract:

"Any dispute, controversy or claim arising out of or in connection with this agreement, or with the termination or alleged breach or invalidity thereof, shall be finally resolved by binding arbitration in St. Petersburg, Russia, in accordance with the Rules of the St. Petersburg International Commercial Arbitration Court. The arbitration tribunal shall consist of (three arbitrators/a sole arbitrator). The language to be used in the arbitration proceedings shall be_____________________."

The parties may also include a governing law clause into the contract:

"This agreement shall be governed by the substantive laws of without reference to its conflict-of-laws principles."

For more information about the St. Petersburg International Commercial Arbitration Court, please contact the SPICAC office by telephone at (812) 318 1233, or by fax at (812) 318 1484, address: St. Petersburg, 190000 Admiralteiksii Prospect 12.