Arbitration of Procurement Disputes

Arbitration is a form of alternative dispute resolution with a number of advantages over litigation. The scope of commercial disputes, which are capable of settlement by arbitration, is limited. The quality of a dispute to be the subject of arbitration refers to the concept of arbitrability. Arbitrability of disputes with the state or a public entity on the one side has always been a controversial issue. Therefore, this study is focused on the legal nature of the arbitrability of disputes arising from public procurement contracts. The review of the concept of “arbitrability” and existing approaches to the definition of this legal institute has identified a range of opposite positions. The study of the Russian case law has highlighted the rationale of Russian courts for and against arbitrability of public procurement disputes. It is concluded that the non-arbitrability had been justified on the grounds of “concentration of important public elements” doctrine. The comparative analysis of legal regulation of arbitration of public procurement disputes in other jurisdictions has suggested that public procurement disputes are predominantly authorised to be settled through arbitration. Overall, the findings of this research underline the idea that the limitation of the arbitrability of public procurement disputes is unfounded. The evidence from this study has demonstrated that the limitation of arbitrability of public procurement disputes based on the doctrine of “concentration of important public elements” is widely criticised for being unjustified and for its negative impact on business and investment environment. The arguments in support of eligibility of arbitration of public procurement disputes have been provided.