General information
Azerbaijani Parliament adopted the new draft law "On
Arbitration" in the third reading on 26 December 2023. It has
been signed by the President of Azerbaijan on 25 January 2024 and
has already entered into force (hereinafter referred to as the
"New Arbitration Law" or simply the
"Arbitration Law"). Consequently, the previous
Law On "International Arbitration" dated 18 November 1999
ceased to have effect.
The New Arbitration Law consists of 59 articles and 8 following chapters:
Chapter I –General Provisions;
Chapter II –Arbitration Agreement;
Chapter III –Composition of Arbitration Court (tribunal);
Chapter IV –Interim Measures;
Chapter V –Conduct of Arbitral Proceeding;
Chapter VI –Making of Award and Termination of Proceedings, Setting Aside of Arbitral Award;
Chapter VII –Recognition and Enforcement of Arbitral Awards;
Chapter VIII –Final Provisions.
This article mainly analyses general provisions of the New Arbitration Law (Chapter I).
Scope and definitions
It is important to note that the content of the New Arbitration Law is mainly based on the UNCITRAL Model Law on International Commercial Arbitration 1985 (with amendments as adopted in 2006) (hereinafter referred to as the "Model Law"). The following definitions are used in the Arbitration Law:
- 1. "Arbitration"means,the process of hearing a dispute carried out for the purpose of making a legally binding decision by an arbitration court, regardless of whether or not administered by a permanent arbitral institution;
- "Arbitration court"means,a sole arbitrator or a panel of arbitrators(although the meaning is similar to the definition used in Article 2(b) of the Model Law, the New Arbitration Law does not use the word "tribunal", but instead uses the word "court" in Azerbaijani text);
- "Arbitration agreement"means,an agreement of the parties to submit to arbitration disputes (or part thereof) that arise or may arise between the parties, regardless of whether they arise from the contract or not; (this is also similar to the definition used in Article 7(1) of the Model Law which reads as follows: ""arbitration agreement" is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.". The same wording is also used in Article II (1) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (hereinafter referred to as the "New York Convention").
- "International arbitration" has the meaning ascribed thereto in Article 4.3 of the Arbitration Law (it will be discussed later in this Article).
- "Domestic arbitration" means an arbitration not related to the international arbitration.
- "International arbitration court", arbitration court which the place of arbitration is abroad;
- "Domestic arbitration court",arbitration court which the place of arbitration is in the Republic of Azerbaijan;
- "Electronic information" means, "information created, sent, received or stored by electronic, magnetic, optical or similar means, including but not limited to electronic data interchange, electronic mail, telegram, telex or telefax";
- "Place of residence of a
person"means "the place where a natural
person usually lives, and the place where the permanent body of a
legal person is located". The expression of
"habitual residence" is used in the Model
Law.
Interpretation of the New Arbitration Law (Article 3 thereof)
Where a provision of the Arbitration Law, except Article 48(Rules applicable to substance of dispute), leaves the parties free to determine a certain issue, such freedom includes the right of the parties to authorize a third party, including an institution, to make that determination(identical to Article 2(d) of the Model Law).
Where a provision of the Arbitration Law refers to the fact that the parties have agreed or that they may agree or in any other way refers to an agreement of the parties, such agreement includes any arbitration rules referred to in that agreement (seeArticle 2(e) of the Model Law).
Where a provision of the Arbitration Law, other than in articles 44.1.1 (the claimant fails to communicate his statement of claim as a result of which, the arbitral tribunal terminates the proceedings) and 52.2.1 (when the claimant withdraws his claim), refers to a claim, it also applies to a counter-claim, and where it refers to a defence, it also applies to a defence to such counter-claim(see Article 2(f) of the Model Law).
Receipt of written communications
Any written communication is deemed to have been received if it is delivered to the addressee personally or if it is delivered at his place of business, habitual residence or mailing address. If none of these can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last-known place of business, habitual residence or mailing address by registered letter or any other means which provides a record of the attempt to deliver it(Article 5.1.1 of the Arbitration Law; Article 3(1)(a) of the Model Law).
The communication is deemed to have been received on the day it is so delivered(Article 5.1.2 of the Arbitration Law; Article 3(1)(b) of the Model Law).
These provisions do not apply to communications in court proceedings(Article 5.3 of the Arbitration Law; Article 3(2) of the Model Law).
The parties may agree otherwise with respect to the receipt of written communications and calculation of periods of time(Article 5.4 of the Arbitration Law).
For the purpose of calculating a period of time under the Arbitration Law, such period shall begin to run on the day following the day when a notice is received. If the last day of such period is a non-business day, the period of time shall expire at the end of the first following business day.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
