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The Principle of Autonomy of the Arbitration Agreement


      An urgent question in the arbitration practice is whether the choice of a particular arbitration for dispute settlement can be attributed to the conditions under which the initial creditors rights are assigned to the new creditor under the assignment agreement.

      In our opinion, proceeding from the principle of autonomy of the arbitration agreement, the right of recourse to the arbitration defined in the arbitration clause cannot be a subject of assignment.

      The autonomy of the arbitration agreement is acknowledged in the doctrine, law, and practice of the international commercial arbitration. The principle of autonomy itself does not cause any doubts at present and, hence, needs no detailed substantiation. However, frequently the autonomy of the arbitration agreement is interpreted only as preservation of its validity in case the contract containing such agreement turns out to be invalid. Actually the principle of autonomy of the arbitration agreement is by far wider. The Law of RF On International Commercial Arbitration dated July 7, 1993, stipulates that the arbitration clause, being an integral part of the contract, must be construed as the agreement which does not depend on other terms and conditions of the contract, and then, as a particular case of autonomy, states that the arbitration clause preserves its effect in the event the contract is void. The juridical literature shows that genetically the autonomy of the arbitration agreement is manifested in other instances, as well (S.P. Lebedev, International Commercial Arbitration: the Competence of Arbitrators and Agreement of the Parties, Moscow, 1988, p. 44).

      The question whether the arbitration clause remains in force in case of assignment of the ontract containing the clause concerned has not been unanimously resolved in the literature yet and is acknowledged as disputable. However, the prevailing opinion both in the Russian and foreign doctrines is that the arbitration agreement is of a procedural nature and by all means binds those parties which have made it, and the assignment of the right to submit the dispute for settlement to an arbitration together with assignment of contractual rights and obligations requires respective proof and special substantiation (M.G. Rosenberg, An International Sales Contract, Moscow, 1996, p.78).

      At the same time, in the practice of the International Commercial Arbitration Court at the Chamber of Commerce & Industry of RF this question was always resolved quite unequivocally. In the well known case of V/O Soyuznefteexport vs. Jock Oil the arbitration tribunal pointed out that the arbitration agreement could not altogether be a subject of assignment.

      The point is not only that the assignee must specifically confirm its consent with the arbitration chosen by the parties to the principal contract but that, first and foremost, in case the subjects of the arbitration clause change, all such subjects must agree with the change concerned. This conclusion is based, first of all, on the fact that the choice of the arbitration is made by the parties to the principal contract proceeding from who their counterparts under the arbitration agreement are. It is well known that certain arbitration clauses are recommended in the international practice for specific subjects of legal relations (e.g. for relations between Russian and American, Indian, Italian, etc. counterparts). Recognition of the arbitration clause transferred together with the rights of one of the parties in case of assignment would mean that the arbitration intended for one set of the subjects would be applicable to another set, and at least for one of the subjects the initial arbitration may be unacceptable. Secondly, when the subjects of the arbitration clause change, the legal regime of the arbitration also changes drastically. For instance, the assignees country may not be a signatory of the international arbitration convention, whereas both the assignor and its counterpart expected that the convention concerned would be applicable.

      Consistent adherence to the principle of autonomy of the arbitration agreement presupposes its recognition as independent of the assigned claims arising from a contract.

      Should the assignment of the arbitration clause be recognized as possible, this would mean creation of conditions for manipulations with dispute settlement legal regime initially chosen by the parties to the principal contract and imposition by one of the parties of such arbitration which was not intended for the relations with another (new) counterpart.

      Finally, it should be noted that the arbitration clause creates for the parties not only the rights, but obligations, as well. Under the Russian law the assignment of obligations requires consent of the other party. Hence, from this viewpoint the arbitration clause cannot be covered by assignment of rights under the contract, either.

Boris O. Kojevnikov,
Doctor of Law


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