Alternate Dispute Resolution Law at Azerbaijan
Azerbaijan has significantly reformed its legal framework for Alternative Dispute Resolution (ADR), introducing comprehensive legislation for both arbitration and mediation to align with international standards and enhance the efficiency of dispute resolution.
⚖️ Arbitration in Azerbaijan
On 26 December 2023, Azerbaijan enacted a new Law on Arbitration, effective from 25 January 2024. This law governs both international and domestic arbitration and is largely based on the 2006 UNCITRAL Model Law on International Commercial Arbitration, with certain modifications to suit local legal practices.
Key Features:
Scope of Application: The law applies to both international and domestic arbitrations, introducing the concept of "domestic arbitration" for the first time.
Arbitration Agreement: Must be in writing, including electronic forms, and can be part of a contract or a standalone agreement.
Arbitral Tribunal: The default number of arbitrators is three. If parties cannot agree on the appointment, the court may intervene.
Interim Measures: Arbitral tribunals are empowered to issue interim measures, which are enforceable by courts.
Arbitrator's Immunity: Arbitrators are granted immunity from liability for damages incurred in the discharge of their functions, provided they act in good faith.
Enforcement of Awards: The law distinguishes between the enforcement of domestic and foreign arbitral awards, establishing specific procedures for each.
🧘 Mediation in Azerbaijan
The Law on Mediation, adopted on 29 March 2019, regulates the practice of mediation as an alternative dispute resolution method in Azerbaijan.
Scope of Application: Applies to civil, economic, labor, and administrative disputes, including those with a foreign element.
Mandatory Initial Mediation: From 1 July 2020, parties must attend an initial mediation session before applying to the court in disputes arising in the fields of economic, family, and labor relations.
Mediator Qualifications: Mediators must have higher education, be at least 25 years old, and have at least three years of work experience.
These legislative reforms aim to enhance the accessibility and efficiency of dispute resolution in Azerbaijan, fostering a more investor-friendly environment and aligning the country's legal practices with international standards.
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