“What should we agree on?” — Ekaterina Mikhalskaya’s comment for the Business Diary magazine dedicated to the SPIEF
The discussion of the specifics of business partnership in the new economic realities occupies a significant place both at the plenary sessions and in the discussions of SPIEF 2023. And this is no coincidence – many urban businesses had to reorient themselves to new markets, re-establish production and logistics chains, and sign contracts with new foreign partners. Ekaterina Mikhalskaya, Managing Partner of Prime Advice, draws the attention of entrepreneurs to important legal subtleties.
And who are the judges?
The expert community advises to carefully consider the choice of applicable law and the court in which disputes will be resolved. After all, an incorrectly defined judicial institution often excludes the very possibility of executing its decision on the territory of a foreign state. According to Ekaterina Mikhalskaya, it is certainly possible to expect that foreign partners will agree to subordinate the contract to Russian law, but there is no guarantee of this.
Therefore, the more detailed the relations between the parties are, the less likely unpleasant surprises are in the form of challenging the provisions of an international contract due to contradiction with any mandatory requirements of the applicable law of an alternative jurisdiction. At the same time, no matter how detailed the conditions are, in the process of agreeing on them, it is important to pay special attention to discussing with the lawyers of the counterparties all possible nuances of legal regulation of foreign economic transactions in the partner's country. We must not forget that in the conditions of sanctions realities, subordination of the dispute to the jurisdiction of the national state court almost negates the possibility of recognition and enforcement of the relevant decision in another country. Therefore, the inclusion of arbitration clauses in an international contract is highly desirable, given the breadth of the 1958 New York Convention on the Recognition and Enforcement of International Commercial Arbitration Awards,
— the lawyer explains.
However, even arbitration clauses, according to the lawyer, are not a panacea. Indeed, if, as a result of sanctions, access to justice is difficult for the Russian partner, then the provisions of Russian procedural legislation on the exclusive competence of the state court are currently interpreted extremely broadly by national practice.