Author: Vratislav Pechota
Published: June 1991
Categories of Disputes
Description: Soon after seceding from the Soviet Union, the Republic of Estonia began consolidating its economic independence through a variety of measures promoting private enterprise, international trade, and foreign investment. Since then, a succession of legislative acts has created a legal environment that is sufficiently stable to enable Estonian companies to develop their own contractual relationships with partners abroad. In the past, such companies were excluded from direct international contacts by Soviet state monopoly that concentrated all export and import transactions in the hands of the all-Union foreign trade organizations in Moscow.
The dissociation from the Soviet pattern of foreign trade also made it improper for Estonia to continue to rely on the Court of Arbitration at the USSR Chamber of Commerce and Industry in Moscow as the forum in which commercial disputes would be habitually arbitrated. The creation of a national arbitral institution was the natural response to this break with the Soviet past. On August 14, 1991, the Parliament of Estonia passed a law establishing a permanent Arbitration Court attached to the Estonian Chamber of Commerce and Industry in Tallinn (the “Law”). What is surprising about this act is not the fact that a national arbitral forum was created, but the method used to do so. In Western countries, institutions for the settlement of commercial disputes by arbitration are formed by private groups. The state and its legislature normally have no part in this process. In contrast, commercial arbitration in the USSR was considered a form of jurisprudence, and not a private matter. Therefore, arbitral tribunals were created by law, and jurisdictional and procedural rules linked them to the judicial system. Paradoxically, the Republic of Estonia chose the Soviet approach.