How prevalent is the use of arbitration in your jurisdiction? What are seen as the principal advantages and disadvantages of arbitration?

Arbitration is the prevailing dispute resolution mechanism for disputes arising in connection with international commercial contracts, but has only limited application in domestic transactions. Reportedly less than one per cent of domestic disputes are resolved through arbitration.

Russian arbitrazh (commercial) courts (arbitrazhnye sudy), part of the state court system, are quite effective in terms of cost and speed of proceedings. Therefore, the duration of proceedings and limited rights of appeal against arbitral awards are seen as disadvantages of arbitration. The relative confidentiality of arbitration and perceived better quality of adjudication are considered to be advantages.

In transactions with an international element (including those where domestic players act through foreign holding companies or offshore vehicles) international arbitration in Russia or abroad is seen as the more neutral and objective dispute resolution method as compared to resolution by the domestic courts.

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