London to remain dispute resolution center for Russia and CIS

London is set to remain the center for resolving commercial disputes emerging from Russia and the former Soviet Republics, according a recent article in The Lawyer, an industry magazine.

“As these countries’ economies globalized, post-Soviet businessmen preferred to take their fights to foreign courtrooms and arbitral tribunals due to a lack of trust in their native judicial systems,” wrote Tatiana Minaeva, Partner and Head of CIS at London law firm Stephenson Harwood.

A key trend in Russia/CIS commercial disputes will be the move to resolution by arbitral bodies rather than by the Commercial Court in London, a sub-division of England’s High Court of Justice, and the traditional venue for high-value disputes. Courts in Russia and the former Soviet Republics have been unreliable in the recognition of foreign judgements, making many of the victories in London’s Commercial Court short-lived.

“I expect that we will hear less about high value Russian business disputes in London’s courts, because the arena of such disputes is likely to move 200 metres up the road, to the confidential world of international arbitration.”

Judicial reform continues in Russia apace and recent clarifications by the Russian judiciary have increased the chances that courts there will enforce foreign legal judgments. However, arbitral awards continue to offer better prospects for enforcement and this has meant that an increasing number of cases go to the International Centre for Dispute Resolution (ICDR) or other London-based arbitration providers.

“Although a few recent cases have demonstrated something of a positive tendency in the enforcement of foreign court judgements in Russia, arbitration remains the most secure dispute resolution method when seeking enforcement against assets there.”