The Presidium of Russian
Supreme Commercial Court clarified its position on the authority to
conclude the arbitration agreements.
A general counsel of the
company branch concluded a contract with arbitration agreement under a
power of attorney authorizing him to represent the company at court and
in particular to settle disputes or to refer the cases to arbitration.
Yet he was found unauthorized to conclude an agreement on behalf of the
company to arbitrate or litigate future disputes. The court finally decided the case on June 7, 2012.
The
court found that a power of attorney to submit to arbitration disputes
already pending at court is not enough for submitting future disputes to
arbitration.
The facts of the case were as follows. A
municipal institution filed submitted to the Russian state commercial
court an application to enforce an arbitration award. The award ordered
the Russian enterprise to pay a debt under a contract of lease of land
and penalty fee for delay in such payment. The debtor argued inter alia
that its representative was unauthorised to submit the dispute arisen
from the the contract of lease to arbitration on its behalf.
The lower
courts granted the application to enforce the award. However, the
Presidium of the Supreme Commercial Court annulled the challenged lower
courts judgments. It ruled that the contract of lease containing an
arbitration clause was signed on behalf of the enterprise by its head of
legal department by virtue of a power of attorney.
As the arbitration was in this case
domestic, the courts applied the Federal Law “On the Arbitral Tribunals
in the Russian Federation” of July 24, 2002. This law as well as the
Russian Law “On International Commercial Arbitration” does not set forth
a requirement to include in a power of attorney a special authority in
order to conclude civil contracts containing a compromise clause. The
general authority to conclude civil contracts implies the possibility to
agree on a compromise clause as well.
However, the head of legal department
had no such general authority. The court found no evidence of its
subsequent approval either. Pursuant to the said Federal Law a dispute
can be transferred to the arbitral tribunal if there is a valid
arbitration clause. Therefore, the Supreme Commercial Court concluded
that the lower court erred in issuing an enforcement writ.
The power of attorney issued to the head
of the legal department provided only for different procedural
authorities including the power to refer disputes to the arbitral
tribunal. Due to procedural character of the authorities the power to
refer disputes to the arbitral tribunal concerns only disputes already
considered by the arbitration court.
Finally, the Supreme Commercial
Court Presidium indicated that its above-stated legal position (i.e.
that a procedural power of attorney is not enough to submit to
arbitration future disputes) can be regarded as a new circumstance for
the review of the judicial acts in any other cases with the same facts
under Article 311(3)(5) of the Russian Commercial Procedure Code.
This is how the Supreme Commercial
Court interpreted the provisions of law regarding power of attorney to
conclude arbitration agreements. In particular, the court held that
mentioning in the power of attorney of a court representative’s rights
to submit the cases to arbitration means only the disputes already
pending at court.
Perhaps it would be short-sighted to
mark this interpretation as “anti-arbitral”. It should be noted that the
Supreme Commercial Court has already considered the issue of the scope
of power of attorney generally authorizing to conclude contracts on
behalf of another person. The court found that such a power of attorney
constitutes sufficient authority for entering into arbitration
agreements without express mentioning them in its text. Thus it is
rather an example of a thorough approach of the Supreme Commercial
Court to the arbitration-related matters.
Source: cisarbitration
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