An associate with BGP Litigation, Vladimir Klimenko, comments on the court failing to accept an arbitration clause –

In 2010, a company with foreign involvement signed a concession with Saint Petersburg to build a tunnel under the Neva river. The project was later frozen by the city, and the company’s losses were not compensated. The contractor claimed the debts through a commercial court in Moscow, which was selected by the International Arbitration Chamber of Paris according to the concession agreement provisions. However, a Saint Petersburg commercial court considered this exterritorial approach to be against the law, and did not issue an order of enforcement. Three out of four experts at “” disagreed with this approach and explained why.

“…the experts, having looked at the negative resolution, cannot agree with the court’s statements. Vladimir Klimenko, of BGP Litigation, pointed out that Article 17 of the Law “On Concession Agreements” does not contain an explicit prohibition against the parties agreeing otherwise. Besides, terminating a concession agreement in itself does not invalidate the arbitration judgement,” Klimenko believes.

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