Unilateral Option Clauses: Unenforceable in Russia
05 September 2012International Litigation and Arbitration Alert
On 1 September 2012, the Presidium of the Supreme Commercial Court of Russia (the "SCC") issued the full reasoning of its decision dated 19 June 2012 in the case of Russian Telephone Company ("RTC") v Sony Ericsson Communication Rus ("Sony Ericsson"), holding that an arbitration clause that gave one of the parties the additional, unilateral option of bringing a claim at courts of competent jurisdiction was invalid as a matter of Russian law. This decision has brought an element of certainty to Russian court practice but with an unwelcome result. Unilateral option clauses – a mainstay of dispute resolution in international financing documentation – should now be viewed as unenforceable in Russia.
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