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Unilateral split jurisdiction clauses under the spotlight in Russia: are they enforceable?

July 2012

Client Notes

On 19 June 2012, the Presidium of Russia's Supreme Commercial Court ("SCC") considered the validity of an arbitration clause that gave only one of the parties to a contract the additional option to bring a claim through the courts of competent jurisdiction. Such unilateral split jurisdiction clauses are commonly used in agreements governed by English law and between Russian and non-Russian counterparties. The Presidium of the SCC decided to set aside the decisions of the lower courts in relation to the unilateral split jurisdictional clause and sent the case back for reconsideration to the Moscow Commercial Court. The case was referred to the Presidium of the SCC on 28 March 2012 by the panel of the SCC on the basis that the unilateral split jurisdiction clause violated the Russian principles of equality of arms and the balance of the parties' interests. The final judgment of the Presidium of the SCC is expected to be published in late July or early August 2012. There is a risk that judgement will hold such clauses to be unenforceable in Russia on the basis that they violate the right to a fair trial.

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