Certain provisions of Russian law imply that real estate
disputes may be the subject of arbitration; however, none
explicitly allow for such a possibility. The Supreme Commercial
(Arbitrazh) Court of the Russian Federation (the "RF
Supreme Commercial Court")1 has taken the position
for more than six years that disputes concerning real estate may
only be heard by Russian state commercial (arbitrazh)
courts. The court's approach was based on the rules requiring
public control over real estate through mandatory registration of
titles and/or transactions by state authorities.2 As a
result, Russian state commercial (arbitrazh) courts have
enjoyed a monopoly on hearing real estate disputes and denied
enforcement of awards of arbitral (treteiskiy) courts and
tribunals on such matters.3
In a spring 2011 case disputing the execution of a Russian
domestic arbitral court decision on the foreclosure of pledged
(mortgaged) real estate, the RF Supreme Commercial Court appealed
to the Constitutional Court of the Russian Federation (the "RF
Constitutional Court") requesting that it rule on the
constitutionality of the provisions of several Russian laws
permitting real estate disputes to be submitted to arbitration. By
means of Resolution No. 10-P, dated May 26, 2011, the RF
Constitutional Court ruled that the disputed provisions of the
Russian laws at issue comply with the Russian Constitution and that
disputes on real estate located in Russia may in fact be subject to
The Constitutional Court noted that the state registration of
rights to real estate, which provides public assurance of
transparency and authenticity of real estate transactions, does not
actually change the nature of civil relations with regard to real
estate. Accordingly, the registration requirement does not preclude
the possibility of real estate disputes being considered by
arbitral panels and tribunals.
This position of the Constitutional Court is also fully
applicable to real estate disputes involving foreign entities. The
exclusive jurisdiction of commercial (arbitrazh) courts5
over such disputes bans agreements on change of venue, but does not
prevent parties from using arbitral tribunals.
The Resolution of the Constitutional Court is final, direct and
binding for all entities and state authorities.6 This
means that a state commercial (arbitrazh) court can no longer deny
the enforcement of an arbitration award issued in a real estate
dispute on the grounds of improper venue.
1 The RF Supreme Commercial Court is the highest state
commercial (arbitrazh) court of the RF. Commercial
arbitrazh courts hear economic disputes between legal entities
and/or individual entrepreneurs. The Russian term
"Arbitrazh" should not be confused with the English term
"arbitral." Arbitration (as opposed to commercial) courts
in Russia are called "treteiskie
2 See Clause 27 of Information Letter No. 96 of the
Presidium of the RF Supreme Commercial Court, dated December 22,
2005; Resolution No. 17373/08 of the RF Supreme Commercial Court,
dated May 12, 2009.
3 The arbitration court may independently decide on its own
competence to hear a case on the basis of an agreement which
provides for arbitration, but its final award requires enforcement
through an order of the state commercial (arbitrazh)
4 Although the particular case concerned domestic
arbitration courts of the RF, we understand that the position of
the RF Constitutional Court is also applicable to international
5 See Chapter 32 of the Commercial (Arbitrazh) Procedure
Code of the Russian Federation "Competence Regarding the
Hearing of Cases Involving Foreign Entities".
6. Articles 6 and 79 of Federal Constitutional Law No.
1-FKZ "On the Constitutional Court of the Russian
Federation," dated July 21, 1994.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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