Chapter I: Historical development of arbitration
1.6. Development of commercial arbitration in the USSR
council of elders (aqsaqals) informally advises the mahalla chairman112 and takes part in mediating conflicts.
As demonstrated in a recent study of Ato, also male Muslim leaders of Tajikistan process disputes over family issues regarding divorce, alimony and inheritance.113
Since at least the 19th century, ‘Otinoyilar’, who acted as women Muslim leaders, have taught Islamic principles, mediate conflicts within families and assisted in preserving Islamic Sharia during the repression of Islam by the Soviets in Central Asia.114 However, some limitations regarding women in Central Asia115 leads to scholars’ debate on “how and to what extent Muslim women leaders influence and help the resolution of disputes by using Islamic Sharia”, which can contribute to the scholarship on Islam and resolution of interpersonal disputes based on Islamic law in Central Asia.
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In this respect, the Uzbek legal tradition, particularly arbitration during the pre-tsarist and tsarist periods was not treated separately in this chapter.
By the 1920s, in the result of the Soviet Red Army’s invasion of Central Asia, the customary law and Sharia law were replaced by the Soviet laws through political tools and the Soviet culture. The Soviet organs did their best to fully erase Uzbek legal traditions from all spheres of life and the old local legal system was not integrated into the Soviet Union’s judicial system.118 In this period Uzbekistan did not have the possibility to overcome problems in dealing with commercial disputes, and there was no word about the international arbitration in Uzbekistan since the Soviet government did not agree with international arbitration courts’
decisions which were passed in foreign countries and in which Soviet enterprises were involved.
Occasionally, in Uzbekistan people did not have information about some spheres of USSR legislation, particularly, in the sphere of international economic relations. Uzbekistan had no right to participate in foreign economic relations during the times of the Soviet Union. GOST State Standards are an example of USSR legislation, which has hardly been changed wholly.
1.6.1. Statutes on arbitration (1920s – 1980s)
Over a long period of time in the Former Soviet States, including Uzbekistan, the term
“treteiskii court”119 was used to mean “arbitration courts” but today in these states the term
“arbitraj” is more well-known being similar as arbitration. At the early stages of the Soviet regime, all of the existing courts were disbanded on account of their bourgeois characteristics.
At that time, the entire judicial system had to be re-established in the context of socialistic thought. Thus, until national courts were fully established, the system of treteiskii courts had to be the easiest and best way to achieve dispute settlement.120
It should be noted that arbitration in Uzbekistan is at present used widely for solving domestic commercial disputes as a new phenomenon since it has not been used for over seventy years for that aim.
Socialist and capitalist economic systems co-existed under the New Economic Policy (NEP), and consequently a new social structure was created. During this time, the private sector enjoyed short-lived foreign trade dealings. In accordance with the NEP, the new Civil Procedure Code was approved on 7 July 1923 ('1923 CPC').121 According to the 1923 CPC
118 Schaumburg (supra n. 116), p. 13.
119 “Treteiskii court” is the original term for arbitration in CIS countries. The stem “tretey” comes from “tretiy”
which means 'third' therefore “treteiskii court” literally means the court of the third person.
120 Yoshida, History of International Commercial Arbitration and its related system in Russia, ArbIntl 25:3 (2009), 365-402 (371).
121 See Ioffe et al. (eds.), Sorok let Sovetskogo Prava 1917-1957 Tom I, Leningrad 1957, p. 653.
international commercial disputes were resolved basing on the traditional system of the treteiskii courts.
Although it seems to be thought that the Soviet system of international commercial arbitration was established from scratch specifically to solve disputes arising from international trade, all the permanent arbitral institutions for international commercial arbitration in the USSR in fact fell into the category of the treteiskii courts.122
Two arbitration commissions existed in the period of the Soviet regime: the Arbitration Commission and the Foreign Trade Arbitration Commission (FTAC).123 These courts exist at present as Arbitrage Maritime Commission and the International Commercial Arbitration Court at the Chamber of Commerce of the Russian Federation. The Arbitration Commission was established in 1922 by the Supreme Soviet of National Economy and its function was to regulate economic disputes among state economic institutions.124 The latter institution FTAC was established in 1932 by a Statute of the Central Executive Committee and the Council of People’s Commissars of the USSR. It is one of the oldest permanent international commercial arbitral institutions in the world. As Lebedev noted, the FTAC was not part of the state judicial or administrative system, but was instead a non-governmental organization which offered arbitration facilities on the basis of a voluntary submission by the disputants. The Commission had its offices at the USSR Chamber of Commerce and Industry which was a non-governmental organization contributing to the development and promotion of trade and economic relations of the USSR with other countries.125 Its duty was to regulate the disputes arising from foreign trade between Soviet economic organizations and foreign firms.126 The 1949 Rules on the FTAC were the first to recognize an agreement to arbitrate future disputes under statute in the USSR.127
In the 1961 Fundamentals of Civil Legislation of the USSR, arbitration courts have been attributed to the bodies realizing the protection of civil rights. Despite the existence of a legislative framework for the development of arbitration courts, in conditions of the
122 Yoshida (supra n. 120), p. 368.
123 In Russian words it sounds: “Vneshne – Torgovoya Arbitrajnaya Komissiya”.
124 Kleinman (ed.), Arbitrazh v SSSR, Moscow 1960, pp. 22-23.
125 Lebedev, Union of Soviet Socialist Republics: The Foreign Trade Arbitration Commission at the USSR, in:
Cohn/Domke/Eisemann (eds.), Handbook of Institutional Arbitration in International Trade: Facts, Figures, and Rules, Amsterdam/New York/Oxford 1977, pp. 273-295 (275-276).
126 Art. 1 of 1932 Statute on the FTAC.
127 Yoshida (supra n. 120), p. 383.
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administrative-command system, the activities of these bodies have not been sufficiently developed in the Soviet Union due to the lack of free enterprises and other economic factors.128 The former Soviet state arbitration courts did not relate to the arbitration courts, since they were direct political institutions of the planned economy and failed to meet one of the main requirements of commercial arbitration i.e. the establishment of arbitration on the basis of the will of individuals. The former arbitration courts were apparently close to the commercial arbitration courts.129 Lebedev noted that disputes between Soviet enterprises were solved by economic courts (“state arbitration”), which were nevertheless not arbitration stricto sensu.130 In accordance with international treaties the Presidium of the Supreme Soviet of the USSR adopted a new Statute on the FTAC in 1975.131 The 1975 Rules on the FTAC limited its jurisdiction to disputes deriving from contractual and other civil law relations arising between those subject to laws of various countries. Disputes between joint ventures in the USSR did not arise between those subject to laws of various countries but those subject to the USSR law only.
Art. 163 of the 1977 Constitution of the USSR elevated state arbitration to an agency of constitutional status, and the Law on State Arbitrazh in the USSR was enacted by the USSR Supreme Soviet on 30 November 1979. Thus, the 1978 Constitution of the RSFSR also provided that the settlement of economic disputes between enterprises, institutions and organisations should be carried out by the agencies of state arbitrazh within the limits of their competence.132 The Supreme Soviet adopted the Provisional Statute on Arbitration Tribunal in 1982. It was designed to solve domestic disputes.133
It is important to note that Gorbachev’s reforms have caused dramatic changes in the Soviet Union. “Perestroika” has encouraged the implementation of free market measures, programs and policies in selected sectors of the economy. Ward states that Gorbachev removed a lot of ideological and practical restrictions that have traditionally hindered American business involvement in the Soviet Union to strengthen the Soviet economy.134 However, other
128 Kulikova, Treteiskii court: history, term, organization of its activities and the development’s perspectives, in:
Treteyskiye sudi v Uzbekistane. Analiz i tendensii razvitiya. Nauchno-prakticheskoye posobiye, Tashkent 2004, pp. 6-24.
129 Knieper, Arbitration Court and State Proceedings, in: Treteyskiye sudi v Uzbekistane. Analiz i tendensii razvitiya. Nauchno- prakticheskoye posobiye, Tashkent 2004, pp. 25-28.
130 Lebedev, ASIL/NVIR Proceedings 1993, p. 187.
131 Vedomosti Verkhovnogo Soveta RSFSR, No. 17, 1975, item 269.
132 Art. 175 of the 1978 Constitution of the RSFSR (Vedomosti Verkhovnogo Soveta RSFSR, No. 15, 1978).
133 Lebedev (supra n. 130), p. 187. – Today, Uzbekistan like some other states of the former USSR has two laws:
one for domestic cases (Uzbek Arbitration Act of 2007) and one for international disputes (Draft Law on International Commercial Arbitration).
134 Cf.Ward, Arbitration with the Soviets: The Importance of Forum Selection in Dispute Resolution Clauses in Non-Maritime Joint Enterprise Agreements, University of Chicago Legal Forum 1990:1, 683-719.
researchers confirm that the hindrance was not directed only to U.S. business, but also to international business in general.
In an effort to encourage foreign investments, the Soviets have been changing the law with notable frequency. In addition, they have concluded private, unpublicized agreements with individual businesses – agreements that subsequently affect the regulation of Joint Enterprises in general.135 The 1975 Statute on the FTAC was replaced by the Statute on the Arbitration Court to deal with joint ventures in 1987.136 Under the 1987 Statute, the FTAC was renamed as the Arbitration Court (AC) and new Rules of the AC ('1988 Rules on the AC’) were adopted by the Presidium of the CCI of the USSR on 11 March 1988.
1.6.2. Treaties under the Soviet regime
The Soviet government concluded several bilateral and multinational treaties on international commercial arbitration. The USSR signed the 1958 UN Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention) on 29 December 1958 and ratified it on 24 August 1960.137 The USSR also ratified the 1961 European Convention on International Commercial Arbitration on 14 March 1962138, and the 1972 Moscow Convention on the Settlement by Arbitration of Civil Law Disputes Resulting from Relations of Economic and Scientific-Technical Cooperation on 26 May 1972.
Butler expressed the opinion that the Soviet government preferred arbitration in order to avoid litigation in foreign courts and concluded bilateral treaties with the countries, containing provisions of mandatory enforcement of arbitral awards, over which the USSR could politically and economically hold a dominant position.139 However, there is no suggestion that arbitration is the sole means of settling disputes.140 Traditionally, the treteiskii courts could only hear disputes which had already arisen in the USSR. This system was contrary to the Economic Treaty between the Soviet Union and Germany of 12 October 1925 which had a provision on the treteiskii settlement and the international practice which recognized agreements to arbitrate future disputes.141
135 Ibid.
136 See Vedomosti Verkhomovo Soveta SSSR, No. 50, 1987.
137 Vedomosti Verkhovnogo Soveta RSFSR, No. 46, 1960.
138 Vedomosti Verkhovnogo Soveta RSFSR, No. 44, 1964.
139Butler, Arbitration in the Soviet Union, London, 1989, pp. 211-247.
140 Ibid.
141 Yoshida (supra n. 120), pp. 372-373.
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