Real estate disputes are arbitrable

Upon the request of the Higher Arbitrazh Court of the Russian Federation the Constitution Court of the Russian Federation has reviewed certain provisions of the Civil Code of the Russian Federation, the Federal Law "On Arbitration Courts in the Russian Federation", the Federal Law "On State Registration of Rights to Immovable Property and Transactions Therewith", the Federal Law "On Mortgage (Real Estate Charge)" for their compliance with the Constitution in connection with uncertainty whether the provisions of legislation disputed in the request comply with the Constitution of the Russian Federation. The said provisions of legislation relate to the arbitrability of civil disputes involving real estate.

The Constitutional Court of the Russian Federation recognized that the disputable provisions of legislation allow arbitrability of civil disputes involving real estate (including foreclosure of the mortgaged real estate) and the state registration of the respective title on the basis of awards of arbitration courts and that they do not contravene the Constitution of the Russian Federation. 

The Constitutional Court, in particular, specified that the right of the parties to the dispute for free disposition of their civil rights is based on part 1 of article 34 and part 2 of article 45 of the Constitution of the Russian Federation, and the requirement of the state registration of transfer of title to real estate does not modify the nature of legal relations critical for determination whether such dispute falls with the competence of arbitration court.

However, notions "court" and "arbitration court" do not become identical in the context of judicature function incident to the state court only. Just the consequences of the adjudication (for the purposes of the state registration or foreclosure of real estate) are treated as equal.

See: Ordinance of the Constitutional Court of the Russian Federation "On Review of provisions of clause 1 of article 11 of the Civil Code of the Russian Federation, clause 2 of article 1 of the Federal Law "On Arbitration Courts in the Russian Federation", article 28 of the Federal Law "On State Registration of Rights to Immovable Property and Transactions Therewith", clause 1 of article 33 and article 51 of the Federal Law "On Mortgage (Real Estate Charge)" for their compliance with the Constitution in Connection with the Request of the Higher Arbitrazh Court of the Russian Federation" No. 10-P of 26 May 2011.