Russia / 23 June 2005 / Russia, Тринадцатый арбитражный апелляционный суд (Thirteenth Arbitrazh Court of Appeal) / The prosecutor of the Kaliningrad Region v Kaliningrad Regional Administration and Duke Investments Limited / A21-2499/2003
| Country | Russia |
| Court | Russia, Тринадцатый арбитражный апелляционный суд (Thirteenth Arbitrazh Court of Appeal) |
| Date | 23 June 2005 |
| Parties | The prosecutor of the Kaliningrad Region v Kaliningrad Regional Administration and Duke Investments Limited |
| Case number | A21-2499/2003 |
| Applicable NYC Provisions | II | II(1) | II(3) |
| Source |
http://kad.arbitr.ru (register of decisions of the RF arbitrazh courts) |
| Languages | English |
| Summary | On 31 January 2003, the prosecutor of the Kaliningrad Region filed a complaint with the Arbitrazh Court of the Kaliningrad Region (court of first instance) seeking a declaration that a loan agreement entered into in 1997 between Kaliningrad Region, Kaliningrad Regional Development Fund, and Dresdner Bank AG was void. In the course of the court proceedings, all rights of the original creditor were assigned to Duke Investments Limited. The court of first instance refused to hear the application because the loan agreement contained an arbitration clause. The Prosecutor and the Kaliningrad Regional Administration appealed the first instance ruling, alleging that the Prosecutor, acting in public interest, was not bound by the arbitration clause and could challenge the loan agreement in the Russian courts. The Thirteenth Arbitrazh Court of Appeal (court of appeal) upheld the first instance ruling referring the parties to arbitration. It relied on Article II(1) and II(3) NYC and on the principle of severability of an arbitration clause enshrined in the Russian legislation. Since the arbitral tribunal sitting in London had already rendered an award declaring the arbitration clause valid under English law, the court of appeal considered this finding as a proof of the validity of the arbitration clause under English Law. The court of appeal further held that under Russian law, the Kaliningrad Region – a state entity represented by its governor – had the authority to conclude civil law contracts. With regard to the Prosecutor’s involvement, the court noted that since the Prosecutor represented the interests of the Kaliningrad Region, it had procedural rights and obligations as a party to the contract, which included submission to the arbitration clause. Lastly, the court held that, as long as the respondent had not argued the merits of its case in front of a domestic court, neither its request for provisional measures nor its motion for substitution of a party constituted a waiver of its right to arbitrate the dispute. |
Attachment (1)
 Original Language Adobe Acrobat PDF |
