International Commercial Arbitration at Azerbaijan
International Commercial Arbitration in Azerbaijan – Overview
Azerbaijan has established a legal framework for international commercial arbitration aligned with international standards to provide an effective dispute resolution mechanism for cross-border commercial disputes. The arbitration framework is primarily governed by domestic laws, supplemented by Azerbaijan’s commitments under international conventions.
Legal Framework
Law on Arbitration (2009, updated)
Governs both domestic and international arbitration.
Provides the legal basis for arbitration agreements, arbitral tribunal formation, conduct of arbitration, and enforcement of awards.
Allows parties to select arbitrators, procedure rules, and place of arbitration.
Recognizes the autonomy of parties and the principle of party autonomy.
Azerbaijan Civil Code
Contains provisions relevant to arbitration agreements and contract enforcement.
New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958)
Azerbaijan is a party to the New York Convention.
Ensures that foreign arbitral awards are recognized and enforceable in Azerbaijan.
UNCITRAL Model Law
While Azerbaijan’s law is inspired by the UNCITRAL Model Law on International Commercial Arbitration, it is adapted to local context.
International Arbitration Centers
The Azerbaijan International Arbitration Center (AIAC) operates as a key institution for resolving international commercial disputes.
Key Features of International Commercial Arbitration in Azerbaijan
Arbitrability
Almost all commercial disputes, including those involving foreign parties, are arbitrable.
Certain public law matters and disputes involving state sovereignty may be excluded.
Arbitration Agreement
Must be in writing and clearly specify arbitration as the dispute resolution mechanism.
Can be incorporated by reference in contracts.
Composition of Arbitral Tribunal
Parties can agree on the number of arbitrators.
Default is usually three arbitrators if not otherwise agreed.
Conduct of Arbitration
Procedures are flexible and party-driven.
Hearings and evidence can be conducted according to the parties’ agreement or arbitration rules.
Recognition and Enforcement
Arbitral awards, both domestic and foreign, are recognized and enforceable.
Grounds for refusal of enforcement align with New York Convention exceptions (e.g., invalid arbitration agreement, public policy).
Advantages of Arbitration in Azerbaijan
Neutral and impartial dispute resolution forum.
Confidentiality of proceedings.
Enforceability of awards under international treaties.
Flexibility in procedure and choice of law.
Summary
International commercial arbitration in Azerbaijan is supported by:
A modern Arbitration Law aligned with international standards.
Membership in the New York Convention, facilitating enforcement of foreign awards.
Availability of an international arbitration center.
Emphasis on party autonomy, flexibility, and neutrality.
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