In Stockholm and Moscow during 80 years

Гернандт Ю., адвокат, партнер юридической фирмы "Винге" (г. Стокгольм), председатель правления Арбитражного института Торговой палаты г. Стокгольма, председатель Стокгольмского центра коммерческого права при факультете права Стокгольмского университета, председатель Управляющего совета шведского Центрального банка, арбитр МКАС при ТПП РФ.

The International Commercial Arbitration Court at the Russian Chamber of Commerce and Industry (the "ICAC") was founded in 1932, while the Arbitration Institute of the Stockholm Chamber of Commerce (the "SCC") was founded some years earlier in 1917.

At that early period of time, the services of the SCC were mainly for domestic purposes. The number of cases was not too impressive. However, it was a service that the chamber wished to provide for its members in order to arrange for quick and confidential resolution of Swedish disputes and conflicts. Arbitration before non-professional and professional judges has been conducted in Sweden for "as long as can be remembered". Settling disputes in a friendly manner is also a part of this tradition.

It was not until the 1970s that international arbitration started to take off. One important reason was the expansion of international trade, which entailed an increase of international arbitration.

The world was, as we all know, divided into mainly two parts in the early 70s. This division did not promote the development of international arbitration, but gradually, as east-west trade also began to grow, arbitration became a favoured means of settling disputes also in such relations. In the middle of the 70s discussions started between representatives of the USSR Chamber of Commerce and Industry and the American Arbitration Association ("AAA") with a view to find an appropriate venue and a suitable institution where dispute arising in US-USSR trade could be settled. Stockholm and the SCC were chosen, and in 1977 an agreement was signed between the USSR Chamber of Commerce and Industry and the AAA, which meant that these two organisation recommended Soviet trade organisations and US corporations to include in their contracts a clause providing for arbitration in Stockholm, Sweden. Applicable Rules were the UNCITRAL Arbitration Rules with SCC as appointing authority and administrative agency. This agreement became an important tool for international trade. Although far from all disputes and controversies are solved by arbitration, the pure fact that this agreement was signed was an important contribution to the functioning of international trade.

The persons to specifically remember for this achievement are Professor Sergei Lebedev, from ICAC in Moscow and Howard Holzmann from AAA in New York.

From the Swedish side those participating were, inter alia, President Sture Petren, Chairman of the SCC, Judge Nils Mangard and the Secretary General of the SCC Mr. Ulf Franke.

All three parties involved (ICAC, AAA and SCC) have since tried to preserve and develop this agreement. This agreement (together with other agreements signed and discussed at this period of time) has been the start of a boom for international arbitration in Stockholm as well as elsewhere.

In the immediate years after 1977, China International Economic and Trade Arbitration Commission (CIETAC), the Chinese mainland arbitration organisation also decided to recommend Chinese entities to use the SCC Rules in order to solve Chinese disputes with parties from other countries. On the Chinese side many Chinese lawyers acted in favour of choosing Stockholm, amongst others, Mr. Ren Jan Xing, at that time Vice Chairman of CIETAC and later Chairman of the Chinese Supreme Court and Professor Tang Houzhi, later Vice Chairman of CIETAC.

During and since the negotiation phase for the 1977 agreement there has always been a prosperous and good cooperation between ICAC and SCC. There has been an exchange of delegations (and later delegations from all parts of the former USSR), law students studying in Stockholm and more experienced younger lawyers working as legal assistants and/or trainees at the SCC or with Swedish law firms. It is obvious that these various exchanges have all added to the knowledge and the understanding of our respective laws and regulations and to an individual understanding of the requirements of international trade and commerce. The personal acquaintances that have developed have also been important.

I have on visits to Russia, inter alia the St. Petersburg First and Second Legal Forums in 2011 and 2012, which emphasized the need for an independent and strong group of lawyers strengthening and developing the legal profession and the respect for the decisions and judgements made by, amongst arbitral tribunals, whether sitting in Russia, Sweden or elsewhere.

Final awards must be accepted by independent enforcement authorities. Although decision making is difficult for anyone involved in the legal process, the purpose of all these different proceedings is to arrive at fair and equitable outcomes based on the applicable law. (See also the Russian Legal Journal "Zakon". 2011. N 7. P. 7 - 13.)

During the last years it seems to me, in my various capacities as chairman of the SCC, as arbitrator and as counsel that proceedings have become more complicated and time consuming; and I myself am, when acting as counsel, also partly responsible for causing disputes to be more complicated.

It is a difficult balance between the role as counsel representing a party, on one hand, and on the other hand, the responsibilities and interest as a lawyer in guarding and participating in the function of a proper dispute resolution system.

The development of international arbitration from the 1970s until today has been remarkable. The arbitral systems throughout all countries can at least be described as similar, although some national special features still exist. There can be no doubt that the understanding of each other's rules and customs has grown and the differences have become smaller. The ICAC and its members as well as other organisations, whether international or national, have all participated in making this possible. The ICAC is therefore to be congratulated on its 80th celebration for its efficient work in spreading the knowledge and understanding of national and international arbitration as well as building an important and successful arbitration institute.

In addition to the above, I have the following comments.

Time frame.

Both the ICCA and the SCC have rules to keep the proceedings within a certain time frame (§ 24 and 37 respectively). Since 2001, the average time for solving a dispute under the SCC Rules with a Russian party is less than a year, in fact 319 days from the date of the registration to the date of the final award. (The average time for all cases since 2001 is 262 days.) The fairly new rule to set a time table early during proceedings (§ 23 in the SCC Rules) is an effective tool to promote the efficient functioning of the proceedings, and if possible, this time table should be agreed upon in cooperation with the parties.

Jurisdiction.

One other obvious observation is that the proceedings have become more complicated in the sense that jurisdictional objections nowadays occur much more frequently than they did some years ago. The number of objections has, in my view, often passed what is reasonable.

Production of documents.

Production of documents is another feature that by now is infiltrating each and every arbitration. The IBA Rules are almost always referred to. The number of fishing expeditions has increased beyond my expectations. The balance between allowing a request for production of documents and refusing it does not always seem clear. It cannot be that a request from a party that is based on a fancy idea or whim shall be accepted. I believe that there is today a tendency of allowing "over-production of documents".

The Arbitration Clause in Contracts.

Although one might believe, after all these years, that this might not be a problem, I still see too many poorly drafted arbitration clauses. It is thus necessary to remind everyone of the importance of the proper drafting of the dispute resolution clause in contracts. And, of course, I refer to the standard clauses for both the ICAC and the SCC. You can always find the standard clauses on the websites for the respective arbitration institute.

Russian Cases in Stockholm.

Over the years since 1977 there has been a large number of Russian cases dealt with by the SCC.

The average time for solving these disputes is less than one year from the date of registration to the date of the final award.

Since 2006, Russian parties have been the second most frequently appearing parties in SCC cases. It can be noted, that the SCC has dealt with over 150 Russian cases since 2001. Of these over 150 cases seven were investment disputes. In total, since 2001 the SCC has had over 250 cases from the CIS countries.

Many of these cases apply Russian law and consequently, the arbitrators and Swedish lawyers participating have gained experience in Russian law.

The SCC consistently continues to work with partner organisations in Russia (and other CIS countries) to promote arbitration and international trade.

Finally, I note that Russia has for years had many famous arbitrators that have participated in arbitration under the SCC Rules. We can nowadays also observe that younger lawyers since some years are added to this group. It is important to gradually "renew" the group of arbitrators and lawyers working with arbitral cases.

The Russian arbitrators and lawyers feel acquainted with Stockholm. They have a good knowledge of our infrastructure. As Russian, German and Swedish laws are part of the continental legal system these laws have many common features, which also is a reason why we see so many Russian lawyers directly participating in cases under the SCC Rules before the arbitral tribunals.

Резюме

В статье рассматриваются вопросы развития Арбитражного института Стокгольмской торговой палаты и Международного коммерческого арбитражного суда при ТПП РФ за прошедшие 80 лет. Сравнительный анализ, основывающийся на исторических и статистических данных, показывает роль указанных арбитражных центров в развитии международного коммерческого арбитража в мире.

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