Taking counsel

  • 2005-10-19
  • By Emils Salins [ LOZE, GRUNTE & CERS ]
Changes in courts of arbitration

Courts of arbitration are independent organizations that, pursuant to the Civil Procedure Law, are entitled to review civil disputes that fall within their competence. Businesspeople who want a quick resolution of a dispute without getting involved with courts of law often agree to refer disputes to courts of arbitration.

The latest amendment to the Civil Procedure Law prescribes several novelties in operation of permanent courts of arbitration that might affect the parties involved in the dispute in a positive and negative way.

Until Aug. 15, 2005 all courts of arbitration, including those which had been operating before the effective date of the amendment, had to pay a fee of 100 lats and file an application, together with all documents relevant for registration or re-registration, to the Enterprise Register for registration of the relevant court of arbitration. All information regarding courts of arbitration was controlled by the Ministry of Justice; however, fulfilling the arbitration rules and other particular data was not mandatory. Today anybody interested in the particular court of arbitration can learn of the relevant data in the Enterprises Register.

The list of courts of arbitration re-registered by Oct. 20, 2005 will be published in Latvijas Vestnesis, while those courts of arbitration that have not completed re-registration by Sept. 30, 2005 will have to be liquidated. After Sept. 30, 2005, a court of arbitration not registered in the Arbitration Court Register will be prohibited from reviewing matters.

Furthermore, businesspeople who have resolved a matter in a court of arbitration that has to be liquidated (pursuant to the foregoing provisions) are entitled, on the basis of mutual agreement, to refer the matter to another court of arbitration registered in the Arbitration Court Register. If no mutual agreement on the court of arbitration is reached, the matter will be referred to the court of law and then the proceedings might be much more complicated and time-consuming.

In order to avoid misinformation, in the future more attention will be paid to the names of courts of arbitration. The current names of courts of arbitration were often misleading and gave false impression as to the directions of their activity. The amendment to the Civil Procedure Law prescribes that the name of a court of arbitration may not include misleading information about its activity. Thus, if upon registration of a court of arbitration the state notary of the Enterprises Register establishes that the name of the court of arbitration is misleading, it will have to be changed. What's more, the names of newly established courts of arbitration will have to differ from the names of already existing ones.

The positive aspect of the amendment to the Civil Procedure Law with regard to courts of arbitration is the fact that any person can learn detailed information regarding any court of arbitration and obtain its rules from the Enterprises Register. Misunderstandings related to names of arbitration courts would decrease as well. At the same time, such changes may turn out to be disadvantageous 's e.g., if the hearing of the case has already been started by a court of arbitration, which is not registered in the Enterprises Register for any reason.