Asymmetric Dispute Resolution Clauses: Validity Under Russian Law After the Sony Ericsson Jurisprudence

28 November 2012
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Key takeaways:

  • This client update discusses the changes in the Russian legal practice following the June 2012 ruling by the Presidium of the Higher Arbitrazh Court of the Russian Federation (highest state commercial court) in the case Russian Telephone Company vs Sony Ericsson, in which the Higher Arbitrazh Court declared invalid a so-called asymmetric (optional) dispute resolution clause.
  • This ruling of the Higher Arbitrazh Court has put into question the practice of including asymmetric (optional) dispute resolution clauses in commercial contracts which before this ruling have been upheld as valid by many Russian commercial (arbitrazh) state courts of lower instances as well as courts of arbitration. However, the language of the ruling is not entirely certain as to the legal consequences implied by the Higher Arbitrazh Court for asymmetric dispute resolution clauses.
  • This client update suggests practical steps that may be considered in view of this ruling of the Higher Arbitrazh Court, both by the parties whose contracts already contain asymmetric clauses and by the parties that are in the process of negotiating dispute resolution clauses for new contracts.