The new law “On Arbitration” (No. 1077-VIQ dated 26 December 2023) came into force on January 25, 2024. The new law replaced the previous “International Arbitration” Law (No. 757- IQ dated 18 November 1999).

The content of the new “Arbitration Law” is mainly based on the UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended).

According to the new law, only parties which are directly involved in a commercial dispute may resort to arbitration (both international and domestic) provided that the arbitration proceeding will not affect rights of a third party. It should be noted that the disputes arising under transportation contracts, intellectual property rights, competition law and protection of consumer rights, as well as disputes arising in connection with consumer loans, insolvency and bankruptcy cases, and immovable property rent contracts can be subject only to domestic arbitration. The “Domestic arbitration” means an arbitration not related to the international arbitration.  The “Domestic arbitration court” - arbitration court which place of arbitration is in the Republic of Azerbaijan.

According to the new “Arbitration Law”, the Arbitration shall be deemed to be international if any of the following circumstances exist:

• the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different states;

• one of the following places is situated outside the state in which the parties have their places of business:

• the place of arbitration is determined in, or pursuant to, the arbitration agreement;

• any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected;

• the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

The following provisions shall apply for the purposes of above-mentioned international arbitration:

 if a party has more than one place of business, the place of business is that which has the closest relationship to the arbitration agreement;

• if a party does not have a place of business, reference is to be made to his habitual residence (place of a residence of a person).

Under the “Arbitration Law” the Supreme Court of the Republic of Azerbaijan is competent to perform the following functions:

• Recognition and enforcement of foreign arbitral awards;

• Refusing recognition and enforcement of foreign arbitral awards.

Suspension of the proceedings on recognition and enforcement of foreign arbitral awards.

The Supreme Court has no power to question the decision of the arbitral tribunal on the merits.

We hope that above said is helpful and acceptable.

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