CERTAIN URGENT ISSUES OF FURTHER IMPROVEMENT
OF ARBITRATION PROCEDURAL FORM
The accepted definition of a procedural form in the theory is a procedure prescribed by law for consideration and resolution of cases. In view of this an arbitration procedural form represents the procedure for consideration and resolution of economic disputes and other cases referred to the competence of arbitration courts regulated by rules of arbitration procedural laws.
In view of this a question justly arises about correlation of the arbitration procedural and civil procedural forms of defense of the rights and interests protected by law. Currently two approaches to the problem concerned have formed. A fairly large group of scholars (M.S. Shakaryan, V.M. Zhukov, I.M. Zaitsev, M.A. Vikut, S.M. Pelevin and others) considers the arbitration proceedings, with certain reservations, to be a part of the civil procedure. In so doing their chief argument is that the subject and method of legal regulation of both procedures coincide, and this means that the «law must set forth a unified procedural form of resolution of similar disputes irrespective of their subjective composition».
In the opinion of other authors «since the Constitution of RF has specified two independent branches of judicial authority for dispute resolution and different procedural law defining a non-identical hearing procedures, there are no reasons to assert that the contemporary civil and arbitration procedures are identical and that there is a unified branch of civil procedural law in the Russian legal system». N.I. Klein, L.F. Lesnitskaya, V.K. Puchinsky, I.V. Reshetnikova, M.K. Treushnikov, V.M. Sherstyuk, M.K. Yukov share this position.
A fairly unique viewpoint regarding the place of the arbitration procedure in the system of law was expressed in the procedural literature by D.A. Fursov, who substantiated the necessity to regard the arbitration procedure as a duplicating branch in respect of the civil procedural law.
To a certain extent acknowledged should be the rightfulness of those scholars who do not find any principal differences between the current arbitration and civil procedural forms of subjective rights protection and are prone to regard the existing specifics of resolution of the above cases as individual procedural peculiarities. Fundamental procedural institutes have been fixed both in the Code of Arbitration Practice of RF and in the Civil Procedural Code of RF. The same is applicable to the principles of arbitration and civil proceedings, parties to the proceedings, establishing to the satisfaction of the court, action proceedings, etc. At the same time, there are hardly any grounds to agree that the existing system of revision may qualitatively characterize the arbitration proceedings as an independent branch of law and serve as an obstacle to incorporate the arbitration proceedings as a part in the civil proceedings. The differences in the system of revision of court rulings both in the civil and arbitration proceedings have no principal substantiation whatsoever. By virtue of this the above systems should have the same instance structure. It seems that the question can be absolutely painlessly resolved within the framework of efforts aimed at improvement of the current law. The same is also true of the issue of absence of the institutes of the proceedings in absentia and court order from the arbitration proceedings. There are no principal legal obstacles to introduce these in the arbitration proceedings. Moreover, the absence of the above institutes should be acknowledged as an apparent gap in the current arbitration procedural law.
Finally, the existence of the arbitration procedural form is far from being predetermined by availability of two independent judicial systems (courts of arbitration and courts of common jurisdiction). This may be exemplified by the system of common courts in which both the civil procedural and criminal procedural forms function. In view of that it is quite admissible to create within the framework of common courts or specialized courts, or specialized boards in common courts of a respective level conducting proceedings over economic disputes and other cases referred to their competence. The question is how this corresponds to historic traditions and national and territorial system of Russia, whether it is reasonable from the viewpoint of organization, whether it would take into account political and economic aspects, or can cardinally change for the better the originating practice of law application.
Is it possible, with due regard for the foregoing, to speak about individual peculiarities only, which in the framework of a unified civil procedural form are typical of the proceedings in arbitration cases, and in so doing to deny the possibility of existence of an independent arbitration procedural form?
I do not think so, and the reason why is as follows. Generally accepted is the circumstance that the subject of judicial protection. i.e. a disputable substantive law relation significantly affects a procedural order of its consideration and resolution. The drawbacks of the current arbitration procedural form are that it does not take into account the specifics which characterize the proceedings in the disputes to a various extent related to economic activities of businesses (legal entities or individual entrepreneurs). An outward semblance of the arbitration proceedings to civil proceedings is predetermined not by a unified subject of judicial protection, but, as V.M. Sherstyuk justly notes, by the Code of Arbitration Practice of RF regulating arbitration proceedings using a model of civil proceedings.
Consequently, the arbitration procedural form needs to take into a maximum account those specifics which are inherent to the subject of judicial protection. The said specifics should be primarily manifested in the order of proceedings. Thus, we would receive an independent procedural form adequate to the specific subject of judicial protection, which would possess qualitative peculiarity. This certainly does not mean that any ties with the civil proceedings would disappear. Many procedural institutes will be common. For instance, the rules defining those involved in the proceedings. Individual procedural institutes, though being outwardly similar, should have an essentially different content. For instance, the principle of contentiousness, which also exists in the civil proceedings, as applicable to arbitration proceedings, places the burden of adduction and collection of evidence solely on the parties. As regards individual stages of arbitration proceedings, their regulation, as I deem it, should differ from the civil proceedings, as necessitated by a special subject of the dispute – basically these are the cases related to business, where the subjects are legal entities and individual entrepreneurs. By virtue of the foregoing one can hardly agree with those scholars who quote a specific subject composition of substantive law relations as a determining criterion for identification of the cases subject to arbitration, , having in mind legal entities and/or individual entrepreneurs. Only in its unity the specific nature of the dispute (economic activities) and the subject composition (legal entities and individual entrepreneurs) make it possible to conclude on the jurisdiction of the arbitration courts over specific cases. Otherwise the case of liquidation of a public or another non-profitable organization would be entertained by the arbitration courts. All cases involving individual entrepreneurs would be subject to consideration by the arbitration courts, whereas only cases related exclusively to business activities of an individual are subject to arbitration. The cases related to satisfaction of personal needs of an individual entrepreneur are within the jurisdiction of the common courts.
Discoursing on the development trends of the arbitration procedural form, it is important to take into consideration the circumstance that the parties to the arbitration proceedings are the professional participants of the business turnover. This is what principally distinguishes arbitration proceedings from civil proceedings in which the subjects of the disputable relations are individuals whose knowledge of substantive law is limited, at the very best, to very general notions. It is mostly with regard to the latter circumstance that the civil procedural form of their rights and interests protection is structured.
Hence, subsequent steps to be taken towards «professionalization» of the arbitration proceedings seem to be quite reasonable. This presupposes higher requirements of procedural nature to the persons involved in the case, which will make it possible to make the arbitration procedural form the most efficient from the viewpoint of reaching its goals and objectives. The current Code of Arbitration Practice already contains such requirements. Thus, for example, in the statement of action the claimant must not only refer to the circumstances with which he connects his claims, but also legally substantiate his claims (part 7, para 2, Art. 102 of the said Code). In the course of proceedings the obligation to prove is vested solely with the parties to the proceedings, and the arbitration court is entitled only to suggest to these parties to adduce additional evidence, provided the court considers impossible to entertain the case on the basis of the evidence already available (Art. 53 of the Code of Arbitration Practice).
Thus, the development and improvement of the arbitration procedural form must not follow the way of using the model of a procedural form fixed in the Civil Procedural Code of RSFSR and, consequently, coming close to it, but the way of creation of such procedural order which would take into account, to a maximum extent, the specifics of consideration and resolution of cases related to business activities of professional subjects of civil relations (legal entities and individual entrepreneurs).
From this viewpoint the arbitration proceedings need a full-fledged stage of preparation for the court hearing. And it is rather the parties to the proceedings that should be interested in proper accomplishment of the preparation stage than the arbitration court. It is namely for such parties that unfavorable consequences relating to evasion from preparation for the case should be envisaged.
Currently the stage of preparation of the case for hearing is fairly tentative and restricted to rendition of a determination pursuant to Art. 113 of the Code of Arbitration Practice of RF, which specifies a standard list of procedural actions, most frequently relating to submission of certain documents. The current Code of Arbitration Practice does not even specify a special time period for preparation of the case for hearing, but only points to the possibility for the judge to establish the same within the framework of a general two- months period of arbitration proceedings. Even if a purely formal approach is used, it would be difficult to speak about an envisaged procedure for preparation of the case, since only two articles (112, 113) regulate the above procedure in the current Code of Arbitration Practice.
Consequently, as we deem it, the parties should be vested with the required scope of rights which would enable them to take an active participation in the preparation stage. First of all, the foregoing is true for determination of the range of evidence which will be subsequently used in the course of establishing to the satisfaction of the court. Possibly, this would be facilitated by the rule by virtue of which the evidence used in the proceedings would be limited to the evidence produced by the parties in the course of preparation for the hearing of the case. As regards evidence adducing, this may be done both in the course of preparation, and during proceedings. The evidence which the party cannot obtain itself may be requested by the arbitration court against the petition of the said party. The above measures are intended to ensure implementation of the principle of the so-called «pure» adversary nature, by virtue of which the burden of evidence is imposed solely on the parties. This excludes a situation fairly typical for current arbitration proceedings, when the evidence is intentionally withheld by a party so that to be adduced only at the court hearing, when the other party would have no sufficient time and means to study and analyze the same. The court is extremely unwilling to adjourn the hearing, since this would lead to procrastination of the proceedings, and, at best, there would be intervals for superficial review of the documents produced. In view of the fact that civil relations are regulated fairly extensively, there would be hardly any serious objections to the above suggestion.
At the stage of initiation and preparation of the case for hearing the range of evidence may be outlined in the statement of claim, statement of defense, the obligation to submit which should be provided for by the Code of Arbitration Practice, as well as in petitions and motions. From the organizational viewpoint the range of evidence used in a specific case may be finalized at the preliminary trial conducted during preparation of the case for hearing.
The attempts to obligate the parties to outline their positions and to point out legal and factual grounds were made in the Code of Arbitration Practice of 1992, in the form of the requirement to the claimant to observe the procedure of pre-trial (claim) dispute settlement procedure. An indisputable flaw of the pre-trial dispute settlement procedure was that it preceded recourse to the arbitration court and, hence, was carried out outside the framework of the arbitration proceedings. It seems that such actions should be performed under the control of the arbitration court in the course of preparation of the case for hearing. It cannot be excluded that the assistant judge may be made responsible for management of the preparation of the case for hearing.
In compliance with Art. 115 of the Code of Arbitration Practice of RF the judge presiding at the hearing determines the order of proceedings and examination of the evidence. It follows from the foregoing provision that the arbitration procedural order of consideration and resolution of the case in the first instance court is not regulated in detail in advance.
Consequently, there are no arbitration procedural form as such as applicable to consideration of the case by the court of first instance. The absence of the successive order for consideration of the case by the arbitration court gives rise to the conditions for unjustified procedural simplification and abuse of power on the part of the arbitration court. Moreover, the existence of the necessity of such regulation is attested by the Rules of the Arbitration Court specially adopted by Resolution of the High Arbitration Court No.15 on 17 September 1992. Therefore, it seems to be necessary to stipulate an express and detailed procedure for consideration of cases.
The procedure of participation in pleadings should be regarded as a separate part of arbitration proceedings. A number of more particular issues, such as, in particular, the procedure of giving testimony by the witnesses, expert examination appointment, etc., require procedural regulation.
On the other hand, improvement of the arbitration procedural form should develop along the trend of its differentiation. It is hardly reasonable to use for any category of cases a universal procedure which is also oriented to cases related to business and to other cases which are attributed by the Code of Arbitration Practice to the competence of the arbitration courts. Such other cases comprise the cases arising from public relations, cases of finding of facts having legal importance, cases of insolvency (bankruptcy), restoration of rights arising from documents to bearer lost; application to receive a writ pursuant to the award rendered by the court of arbitration, etc. Since the proceedings in regard of the above cases are very specific, these should be considered as special proceedings. At the same time the traditional interpretation of the special proceedings as having no dispute over the right should be avoided. Special proceedings should comprise those categories of cases whose procedure of consideration and resolution is characterized by a number of material procedural peculiarities.
Consequently, it would be reasonable to support the opinion that the arbitration procedural form must be oriented to consideration of cases arising from business; as regards other cases, these should be entertained as special proceedings.
Finally, the Code of Arbitration Practice must regulate streamlined procedures, proceeding from the fact that these are outside the framework of arbitration procedural form. In particular, the foregoing should be attributed to the procedure of writ issuance.
Thy existing system of revision of rulings warrants special attention in view of further improvement. As its indisputable merit the procedural literature frequently quotes a three-instances structure of revision, having in mind the court of appeal, the court of cassation, and supervision. There is also a possibility to review the rulings based on new circumstances revealed. Meanwhile, the existing system of revision has apparent shortcomings which are not always taken into account. First, it is extremely complicated, though the appellate instance which is incorporated in the first echelon of the judicial system is far from being efficient. Both scholars and practicing lawyers have repeatedly paid attention to this circumstance. Second, the system of revision is arranged in such a way that the awards of the High Arbitration Court of RF rendered in the first instance are subject to no appeal whatsoever. Third, the subject of revision of the cassation instance is the rulings which have come into legal force. This can be hardly recognized as justified, since in the theory of the procedural law it is customary to consider that such rulings cannot be revised against the appeal of an interested person. Irrefutability is one of the properties of the legal force of a judgement. The problem of enforcement of such judgements is closely related to it. It seems that the ruling rendered in the case must come into legal force only after expiration of one month period envisaged for filing an appeal with the court of cassation, provided no such appeal has been filed.
When characterizing the system of revision, also from the viewpoint of its accessibility, one cannot but express one’s views as regards the expediency of preservation of the supervisory proceedings. The circumstance that the said proceedings are initiated on the initiative of the circle of officials specially listed by the procedural law makes the access of interested parties to these extremely difficult. The existing possibility to protest against the ruling rendered undermines the civil relations. The suggestions to modernize this institute of revision will hardly alter its nature, in view of an exceptional character of this stage of arbitration. It seems that it is namely in the system of arbitration courts that a unique situation has originated that makes a transition to the appeal-cassation system of revision possible. For this purpose it would be necessary to delegate the powers of the appellate instance to federal arbitration courts of the districts, and the functions of the cassation instance should be concentrated with the High Arbitration Court of RF. One should agree with T.E. Abova that this would «require a serious substantiation and independent research», but the organizational and legal prerequisites for this do exist.
 Grazhdanskyi Protsess (Civil Procedure) edited by V.A. Musin, N.A. Chechina, D.M. Chechot, Moscow, 1996, p.395
 V.M. Zhuikov, Sudebnaya Zashchita Prav Grazhdan i Yuridicheskikh Lits (Judicial Protection of the Rights of Individuals and Legal Entities), Moscow, 1997, p.195
 T.E.Abova, Arbitrazhnyi Sud – Konstitutsionnyi Organ Sudebnoj Vlasti (Arbitration Court – A Constitutional Body of Judicial Authority). Gosudarstvo i Pravo (State and Law) journal, 2000, No.9, p.9.
 D.A. Fursov, Predmet, Sistema i Osnovnye Printsipy Arbitrazhnogo Protsessualnogo Prava (Problemy Teorii i Praktiki) (The Subject, System, and Basic Principles of Arbitration Procedural Law (Problems of Theory and Practice), Moscow, 1998, p.31
 T.E. Abova, ditto, p.6
 Previously the pre-trial (claim) dispute settlement procedure was envisaged, in particular, by the Rules of consideration of commercial disputes by the state arbitration courts (Approved by the Decree of the Council of Ministers dated 5 June 1980).
 T.E. Abova, ditto, p.14