On the individual properties of the accessory nature of the arbitration clause

Trukhan Roman Petrovich Postgraduate student, Belgorod State National Research University 629850, Russia, Yamalo-Nenets Autonomous Okrug, Tarko-Sale, Osennaya 11, sq. 27 trukhan.roman@yandex.ru Other publications by this author

Arbitration clause as the basis of the relationship between substantive and procedural legal relations

As you know, one of the types of arbitration agreements is an arbitration clause. In fact, most often, this is an agreement between the parties to the contract, directly included in its text, on arbitration of disputes that may arise from this agreement. It is noted in the literature that the parties often face the need to provide for the hearing of future possible disputes between them by a court whose legal positions are acceptable and understandable to them ^{[8, p.72]}. Thus, they have a question in agreeing on a specific arbitration competent to consider disputes under the contract ^{[5, p.47]}. Arbitration clauses help to solve this problem.

 The arbitration clause, being included in the composition of the substantive legal relationship as part of the norms of the contract or by a separate, additional agreement to the contract, resolving procedural issues on which the parties have agreed, determines the jurisdiction of the case to a specific court in the event of a future legal dispute between the parties to this agreement ^{[13, p.60]}.

Thus, there is a dual nature of the arbitration clause: on the one hand, it is fixed within the framework of the implementation of the norms of substantive law, provided for by them and refers to them by nature, and, on the other hand, issues of procedural law are resolved through the arbitration clause, the jurisdictional activity on the dispute between these parties of a particular court is predetermined ^{[10, p.178]}.

In this regard, it is noted in the literature that the arbitration clause acts as a way of interrelation between material and procedural legal relations, despite the fact that the arbitration clause itself does not "launch" the relevant jurisdictional process, but defines its framework and conditions, including the jurisdictional body itself (commercial arbitration) and established for it, including by itself by this court (arbitration court), the conditions for the consideration of the dispute (interim measures, the amount of the fee for the consideration of the case and the procedure for its payment, the timing of the consideration of the case, etc.) ^{[11, p.19]}. In a number of situations, for example, when considering a cross-border dispute, the question can be looked at more broadly: in a certain sense, the rules of jurisdiction partially determine the choice of applicable procedural law regarding the place of consideration of the issue of interim measures, that is, a conflict of laws issue is implicitly resolved here.

Similar relationships are observed, thanks to the arbitration agreement, and between the contract (contract) and other types of dispute resolution alternative to judicial, including arbitration, for example, adjudication ^{[3, p.240]} or mediation ^{[12, p.47]}, which additionally indicates that, thanks to the arbitration clause, as a type of arbitration agreement, special relationships arise between material legal relations and procedural legal relations. It seems that these relationships have some accessory features.

Evidence of the accessory characteristics of the interrelationships of material and procedural legal relations arising from the application of the arbitration clause

Unfortunately, there is no consensus in the literature today regarding the immanent properties and characteristics of accessory itself, however, those features in respect of which minimal consensus has been reached in legal science can be found in the relationship between material and procedural legal relations, secured by an arbitration clause.

Firstly, accessory implies the existence of a one-way causal relationship between the main and the additional.

The main legal relationship in this case will be a material legal relationship, and an additional one will be a procedural one. The reason for the emergence of a procedural legal relationship is the violation by the parties of their obligations within the framework of a substantive legal relationship.

Such a relationship is one-sided, since the violation by the parties of their procedural obligations entails procedural consequences. For example, to date, the English courts have believed that the action  The Brussels ^[1] and Lugansk ^[2] Conventions do not apply to arbitration (arbitration) proceedings, in connection with which, if one of the parties violates the arbitration clause, a ban on hearing the case by another court may take place, but this does not affect the substantive law applied by the court ^{[17, p.10]}.

Secondly, the determinant of accessory as a relationship is something that lies beyond it.

The source of the arbitration clause is an arbitration agreement – a part of the agreement (contract) between the parties or a separate agreement regulating this procedural moment. It is the essence of the arbitration clause rule that determines the nature of the future relationship between substantive and procedural legal relations.

The nature of this relationship may vary.

In particular, the parties may provide for an unambiguous arbitration clause when they explicitly define the court to whose competence they refer the settlement of disputes among themselves ^{[9, p.67]}, or the parties may find it difficult to choose a specific court, in connection with which they can apply the so-called "alternative arbitration clauses" when choosing a specific The arbitration institute will be tied either to the unconditional choice of the plaintiff, or to the location of one of the parties ^{[15, p.34]}. In both cases, the determinant of the arbitration clause will be the agreed will of the parties, which lies outside the limits of the accessory relationship itself.

 Thirdly, the main and accessory (additional) legal relationship should have a relatively common legal nature.

At first glance, a material legal relationship and a procedural legal relationship have a different legal nature, which is called, by definition.

Meanwhile, if we consider the accessory relationship in the broadest sense of the word, then in both cases we are dealing with the same (except for the appearance of a court in a procedural legal relationship) subjects of legal relations who perform legally significant actions within the framework of the same initial factual relations – relations for the fulfillment of the terms of a specific contract concluded between these parties. We are talking about legal activity conditioned by one goal – the satisfaction of the parties' own needs at the expense of each other under the conditions defined by the agreement between them.

It is also noted in the literature that, for example, certain instruments of legal regulation are relatively "common" for international civil procedure and private international law, in particular, the institution of an arbitration clause ^{[7, p.37]}.

Fourth, the ultimate goals of the existence of the accessory (additional) coincide with the goals of the main (main).

This is true, since both within the framework of a procedural and a substantive legal relationship, the parties achieve the same thing: the realization of their rights under the contract and the proper performance of obligations under it. Applying for legal protection to the court, of course, has its own goals, conditioned by the civil (arbitration) process, but these goals are trajectory (intermediate) for final substantive purposes.

Fifth, the main (main) and accessory (additional) are usually characterized by a single time continuum.

With regard to the arbitration clause, this is not only completely true, but also the only possible one: the procedural legal relationship begins to flow only after the beginning of the material legal relationship and ends before its end or simultaneously with it (if you do not take into account the stage of execution of the judicial act when the contract is terminated, but consider it in the context of a separate civil enforcement relationship, as it has been proposed in the literature for almost 20 years ^{[6, p.89]}).

Sixth, for an accessory (additional) legal relationship, it will usually be characteristic to join the main legal relationship without merging with it.

This is also observed in relation to the relationship between a substantive legal relationship and a procedural legal relationship arising as a result of an arbitration clause. The arbitration clause itself is part of the arbitration agreement between the parties - an agreement originally reached and implemented within the framework of a substantive legal relationship. An additional (accessory) legal relationship arises as a result of a substantive (according to the way it is reflected by the parties) arbitration clause and is clearly attached to the main (main) one, but does not merge with it in any way and, moreover, cannot merge completely due to the difference between the substantive and procedural nature, although this nature is broadly in the sense of the word and has common features, as mentioned above in the work.

Seventh, usually accessory (additional) depends on the main (main) in its origin and termination, its legitimacy, its structure and elemental composition, characteristics of content and form, etc.

This dependence can also be discussed in relation to the relationship caused by the arbitration clause - the relationship between the substantive and procedural legal relationship.

Thus, a procedural legal relationship based on an arbitration clause cannot arise earlier than a substantive legal relationship, although in other cases not conditioned by an arbitration clause, such earlier or simultaneous occurrence may occur, for example, in a situation of pre-contractual disputes between the parties resolved by the court. The procedural legal relationship is terminated simultaneously with the material legal relationship – the entry into force of a court decision, or even earlier, when the parties resolved a specific dispute (for example, on payment for part of the delivered products), without terminating the contract itself and remaining in a substantive relationship.       

The legitimacy of the procedural legal relationship in which the dispute between the parties is considered by their chosen court depends on the legitimacy of that part of the main agreement or a separate arbitration agreement, which contains an indication of applying for jurisdiction to this court in the situation provided for by the arbitration clause. If the invalidity of the arbitration clause agreement is established, then the consideration of the case by this court will be terminated, and the parties will seek protection of their rights in accordance with the general rules of jurisdiction.

The structure and elemental composition of a substantive and procedural legal relationship are similar, at least in terms of subjects of substantive legal relations who become participants in a judicial dispute in the form of its parties ("take the place of the parties").

There may also be similarities in certain characteristics of the content and form of the relevant legal relations, since we are talking about the same violated obligation and the main subject of judicial research is a specific contract: it is its provisions that the court evaluates from the point of view of possible violation by the parties, both the contract and the court dispute.

Eighth, obviously, the accessory always complements the main thing.

Indeed, a procedural legal relationship without a substantive legal relationship is meaningless by nature: it cannot exist without the need of a party to the contract, which considers its rights under the contract violated, to take advantage of an arbitration clause and apply to the appropriate court established by it to protect its right. Without a substantive legal relationship, the purpose of a procedural legal relationship is negligible.

Concluding the proof of the discovery of the main characteristics of accessory in the relationship between the material and procedural legal relationship, when the latter arises as a result of an arbitration clause, it should be noted that in its absence, the relationship between the material and procedural legal relations will not be accessory, since the procedural legal relationship, within which the dispute is resolved by a specific court, will not be based on the will of the parties expressed in the contract, and is determined by force of law when one of the parties to the substantive legal relationship considers its rights violated and seeks judicial protection.

An example of a practical consequence of establishing the accessory characteristics of the interrelationships of material and procedural legal relations arising from the application of an arbitration clause

As it was established in the work above, the arbitration clause can be recognized as the basis for the emergence of a special relationship between the substantive (main) and procedural (additional) legal relationship, which has the main features of accessory.

It seems that this conclusion has not only important theoretical, but also purely practical significance.

In particular, the recognition and formalization of certain characteristics and properties of accessorism in the legislation on the possibility of applying the arbitration clause will make it possible to scientifically revise certain provisions of the current legislation and improve it.

Based on the analysis of judicial practice on cross-border disputes proposed by V.Selivanova ^{[14, p.75]}, it is possible to assume a situation in which a buyer from the UK (plaintiff) appeals to a seller from Russia (defendant) in accordance with the reservation made about the court of dispute resolution to the Swiss state court and it is this court that will consider the case on the merits. At the same time, the disputed property is located by the defendant on the territory of the Russian Federation. In this situation, the plaintiff submits a petition for interim measures to seize the defendant's property in the territory of the Russian Federation. The Swiss State Court satisfies this request and the plaintiff applies to the State Court of the Russian Federation for the purpose of compulsory enforcement of a judicial act of a foreign court on the territory of the Russian Federation.

Meanwhile, a judicial act of a foreign court on the adoption of interim measures will not necessarily be recognized and subsequently enforced on the territory of the Russian Federation, since such an act is not a final judicial act by which a dispute conducted in the framework of an adversarial process is resolved on its merits.

However, a special case stands out for such a conclusion, when there is an arbitration clause allowing the plaintiff – a foreign person - to apply to international commercial arbitration in order to apply interim measures in the framework of a cross-border dispute.

An international arbitration forum (such as, for example, the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation) simultaneously considers a cross-border dispute on its merits and issues a judicial act on the adoption of interim measures, however, interim measures taken by international commercial arbitration do not in themselves have the ability to be enforced on the territory of the Russian Federation, are executed by the parties the dispute is voluntary (that is, their execution is made dependent on the good faith of the behavior of the second party to the dispute, the defendant) and is not binding on third parties ^{[16, p.71]}.

In order to make interim measures taken by international commercial arbitration enforceable on the territory of the Russian Federation, the plaintiff must submit an appropriate application to the Russian state court, which will, within the framework of judicial control and enforcement of interim measures taken by international commercial arbitration, investigate the validity of the arbitration agreement ^{[4, p.44]}.

Thus, the application of interim measures on the territory of the Russian Federation at the request of a foreign person (in respect of whom the bindings of a "personal law", etc., cannot be applied) in a dispute considered by a foreign court is significantly difficult, except in the case of applying for enforcement of interim measures issued by an arbitration court – international commercial arbitration.

The establishment of the features of accessory in the interrelation of material and procedural relations, when the latter arises as a result of the implementation of the contractual norm on the arbitration clause, suggests that in a situation in which the provision on the arbitration clause is contained in a contract that has been state registered (notarized) in national jurisdiction, or in an arbitration agreement notarized in this jurisdiction, the execution measures to secure a claim taken by commercial arbitration as an arbitration court in another jurisdiction must pass the stage of verifying the validity of the arbitration agreement or individual rules on the arbitration clause.

Conclusion

As a result of the application of general and private scientific research methods and techniques, the following main conclusions can be pointed out.

First of all, an arbitration clause as a type (part) of an arbitration agreement becomes a link between a substantive legal relationship and a procedural legal relationship.

This relationship has certain accessory features, which include the following: 1) accessory implies the presence of a one-sided causal relationship between the main and additional, 2) the determinant of accessory is something beyond its limits, 3) the main and accessory have a common legal nature, 4) the ultimate goals of the existence of the accessory coincide with the goals of the main, 5) the main (main) and accessory (additional) are characterized by a single time continuum, 6) it will be characteristic for the accessory to be attached to the main without merging with it, 7) the accessory depends on the main (main) in its origin and termination, its legitimacy, its structure and elemental composition, in terms of characteristics of content and form, etc., 8) the accessory complements the main.  

The establishment of signs of the accessory relationship between material and procedural legal relations is not only theoretical, but also of purely practical importance, since in some cases it can serve as a doctrinal basis for reviewing existing legislative provisions and the practice of applying the norms of law, which is shown in the work by the example of the potential impact of a state-recognized (state-registered or notarized) arbitration clause on the possibility of applying in the national jurisdiction of the place of registration or certification of the contract a simplified procedure for applying for enforcement of interim measures taken by a court of another jurisdiction indicated by this arbitration clause.