What types of Russian-related disputes most often are brought to English courts and arbitration in London?
Although the number and variety of Russian-related cases that are considered in London (whether by arbitration or litigation) is increasing the most common disputes that we see are shareholder or joint venture disputes, disputes involving different loans or financing of businesses and civil fraud cases.
Earlier you said that the topics and specifics of Russian disputes have changed recently? Can you please clarify what changes exactly? What do you think is the reason for these changes?
There could be many different reasons for the changes, at least one of them (which I think is quite an important one) is that a greater number of Russian individuals have created connections with England and London. These connections range from children going to schools, to ownership of residential property, to working for London-based businesses, to setting-up own businesses in London or making investments into England-based businesses. This has expanded beyond the ultra-high networth individuals, who were some of the first to come to London. These connections to England and London mean that a greater variety of disputes involving Russian parties get resolved here.
We are now seeing commercial disputes about day-to-day business matters, we are seeing family disputes (which in some cases involve issues of ownership of significant business assets), we are seeing disputes about investments that go wrong, reputation disputes and many others. The connections to England allow arguments to be made for disputes that are not purely contractual in nature to be considered by English courts. The location of assets in England, has led to attempts to enforce both decisions of local courts and foreign courts and foreign arbitral awards in England.
The COVID-19 pandemic has resulted in various contractual termination disputes and we have seen a variety of enquiries of this kind involving Russian and CIS parties with English law as the governing law, and/or the English courts and arbitration in England as the mode of dispute resolution.
You have noticed that disputes involving Russian parties or interests are a major share of the international disputes being resolved in London. In your opinion, why is the British jurisdiction so attractive to Russian citizens?
There are once again many reasons for this. I will mention three. First, the most common reason for why Russian parties prefer English law to govern their business transactions and contracts is the consistency and fairness of English courts in their decision-making, which arises because of the large body of judicial precedents going back hundreds of years. Second, English law is simply less rigid than most civil law jurisdictions and it places great importance on party autonomy and freedom of contract. Third, there is a wide choice of interim measures available to assist parties during the course of their dispute.
What difficulties do Russian citizens and lawyers most often face in settling disputes in London?
I do not think there are any more difficulties in settling disputes in London for Russian parties as there are for any other foreign or English parties. However, I would stress the importance of understanding the different rules and procedures that work in England, which are different to the rules and procedures in Russia. Accordingly, before engaging in an English litigation or arbitration a party should make sure to get experienced and knowledgeable local advice and trust their local advisor who is acting in the party's best interest.
In your experience, what are the most popular mistakes made by the Russian parties in the process of litigation in London? What would you advise Russian parties and lawyers to think and prepare in advance to avoid these mistakes?
Russian parties often lack an understanding of local procedures and nuances of participating in English proceedings. This could range from a lack of full comprehension as to the obligations placed on parties by the disclosure requirements (this should be properly understood before commencing any litigation) to a confusion as to the roles of solicitors and barristers in a single dispute (the roles are different but complimentary and the party needs to know how to manage the involvement of the various team members working for the party).
Often it is not fully appreciated that proceedings in English courts and in English arbitration will be longer than proceedings in Russian courts. A realistic expectation of timescales (and the processes that will happen during this time) is required.
Also, proceedings in some cases involve different parties in different jurisdictions, which allows opportunities for different proceedings or actions to be commenced in different courts or by way of different arbitration. Particularly in high stakes disputes, it is crucial that the claimants carry out a review of all of the options available to them and the effect that proceedings in one jurisdiction will have on other related proceedings and take a carefully considered and strategic approach to the commencement of different actions to maximise their chances of ultimate success. If this is not done, the commencement of proceedings in one jurisdiction may inadvertently prevent the party from commencing other proceedings in another jurisdiction, which would have been ultimately more important for the resolution of the dispute.
From your perspective, how has the pandemic affected the resolution of Russian-related disputes in London? What would you recommend to Russian lawyers and citizens to overcome these problems?
The English courts and English-based arbitrations have embraced the use of video technology for the holding of virtual hearings and this has been a positive development for Russian and other international parties in at least two ways: (i) it has meant that the resolution of disputes has not been materially delayed like it has in some jurisdictions; and (ii) participation in video-hearings has resulted in an element of cost saving.
In your opinion, has Brexit affected the handling of international disputes in London, particularly cases involving Russian parties? If so, in what way?
In my opinion, not really. However, there may ultimately be an effect on multi-jurisdictional litigation disputes that have a wider European element to them.
As moderator of the SPILF discussion “London as a venue for dispute resolution” what do you expect from SPILF discussion?
I look forward to sharing the latest news and information of interest with our Russian colleagues and having an exchange of ideas and views about some very important and topical issues in the world of international dispute resolution.
The discussion “London as a place for dispute resolution” will take place on May 18: experts will talk about the main types of disputes considered in the British capital, the implementation of international decisions and the impact of a participant's bankruptcy on the dispute resolution process.
SPBILF 9 ¾: Vaccination by Right will take place online from 18 to 22 May 2021. Heads of Russian and foreign authorities, top lawyers from all over the world, scientists and businessmen will take part in virtual discussions. Full program and registration are available on the official website.
SPILF general partner is Gazprombank.
Image source: S. Konkov / TASS photo host / SPBILF