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Comments to putting in force the Regulations provisions:
These Regulations are a regulatory legal instrument of the Non-Profit Partnership Saint Petersburg Fair Business Bureau (FBB). The out-of-court settlement procedure may be also used for businesses which are not FBB members if they duly apply to the Commission for Business Ethics.
General
These Regulations for Dispute Resolution (the Regulations) have been prepared in order to create a mechanism suitable for resolution of disputes related to violation of ethical standards defined by the Saint Petersburg Business Code of Honor.
In addition to the Regulations, the following documents shall be used as a regulatory framework for dispute resolution:
- Statute on Participation in the Program "Ethical Business of Saint Petersburg"
- Saint Petersburg Business Code of Honor
- Civil Code of the Russian Federation and other regulatory legal documents.
Definitions
"Commission" shall mean the Commission for Business Ethics resolving disputes on the basis of complaints on violations of ethical standards of the Saint Petersburg Business Code of Honor filed with the Commission.
"Arbitrators Pool" shall mean the entire roster of the Commission's arbitrators approved by the FBB Board of Directors
"Arbitration Panel" shall mean a body of 6 arbitrators formed from among the Arbitrators Pool and authorized to make awards on behalf of the Commission.
"Arbitration Board" shall mean a body of three arbitrators selected from among the Arbitrators Pool for resolution of a particular case.
"Dispute Resolution" shall mean the proceeding whereby the Arbitration Board resolves a particular case.
"Initiating Party" shall mean any legal or physical entity filing a complaint in accordance with provisions of the Regulations.
"Respondent" shall mean the party against which the complaint has been filed.
"Parties" shall mean legal or physical entities whose violation of the principles of business ethics (or entities affected by such violation) is the issue to be resolved by the Commission for Business Ethics.
Article 1 - General Provisions.
1.1. Commission for Business Ethics shall be a standing commission within NPP Saint Petersburg Fair Business Bureau.
1.2. The Commission shall resolve disputes related exclusively to violations of general principles of business ethics formulated in the Saint Petersburg Business Code of Honor. Court proceedings in respect of the legal aspects of the disputes shall not prevent resolution of the ethical side of the dispute by the Commission for Business Ethics.
1.3. The Commission shall resolve a case only when a complaint is filed by at least one of the parties to the dispute.
1.4. Corporate and individual FBB members shall be subject to the out-of-court dispute resolution on a mandatory basis.
1.5. The Arbitration Panel of the Commission shall include the Chairperson of the Commission for Business Ethics and arbitrators from the Arbitrators Pool roster as well as the Arbitration Panel executive body, the Executive Secretary.
The Arbitration Panel shall consist of 6 individuals whose functions shall include making awards in accordance with provisions of these Regulations on behalf of the Commission.
For resolving particular issues of the disputes, the Arbitration Board consisting of three arbitrators shall be formed.
Arbitrator candidacies shall be suggested by FBB members, discussed and approved by the Board of Directors. An arbitrator shall be deemed approved when voted for by the majority of members of the Board of Directors.
Nomination of an arbitrator candidacy at the Board of Directors meeting shall be based on the consent of the candidate and his personal information including a biographical sketch indicating work experience which may be useful for his service as an arbitrator of the Commission.
Arbitrators may be expelled from the Arbitrators Pool:
1. Pursuant to a written notice of the arbitrator;
2. Pursuant to a decision of the Board of Directors by a simple majority of votes in case of:
- absence of referrals to that arbitrator for participation in dispute resolution proceedings for three years following the date when that arbitrator was included in the Arbitrators Pool;
- violation of ethical standards of independence and impartiality when making awards, violation of other provisions of these Regulations or other violations incompatible with the arbitrator work.
1.6. Disputes may be resolved on the initiative of:
1. two parties concerned;
2. one party concerned;
3. on the Board of Directors' own initiative.
At the Board of Directors meeting, the motion to initiate proceedings by the Commission for Business Ethics shall be moved on the initiative of FBB members.
1.7. Disputes that have not been resolved through amicable negotiations between the parties or through a mediation procedure involving a mediator shall be referred to the resolution of the Arbitration Board consisting of three arbitrators selected from among the Arbitrators Pool.
The Arbitration Board shall conduct hearing of the parties involved in the dispute; upon completion of the proceeding, the arbitrators shall make an award.
1.8. Confidentiality
1.8.1. From the time when the complaint has been accepted for resolution by the Commission, the entire proceeding including the resolution and making the Award shall be strictly confidential except for the cases listed in Sub-Clause 7.1.3 of these Regulations.
1.8.2. The responsibility to maintain confidentiality of information received in the course of dispute resolution and making Awards shall apply to the parties to disputes and their representatives, arbitrators and other members of the Commission, experts involved as well as FBB members who equally shall not use it in their interests or in the interests of third parties.
1.8.3. Parties to the arbitration shall pledge to maintaining confidentiality by signing appropriate obligations.
1.8.4. Disclosure of confidential information, both premeditated and unpremeditated, by any person involved in the arbitration at any phase of the proceeding shall be qualified as violation of business ethics and shall be subject to resolution by the Commission for Business Ethics.
1.9. The Arbitration Panel functions, session procedures and procedures of award-making:
1.9.1. The Arbitration Panel of the Commission shall make awards on behalf of the Commission for Business Ethics on the following issues:
- approval of decisions of the Chairperson of the Commission on acceptance of complaints for resolution or motivated rejection of acceptance of complaints for resolution;
- election of arbitrators in cases specified in Clauses 5.4, 5.5 of these Regulations;
- control of execution of the Arbitration Board's Award as related to Clause 7.1.2 and, in case of a failure to execute/improper execution, applying measures to implement Clause 7.1.3;
- proposals, in special cases, that certain disputes having a special social implication or complicated from the award-making perspective be resolved at the Board of Directors meeting.
1.9.2. The Arbitration Board under the guidance of the Chairperson of the Commission shall hold meetings at least once a month;
- the quorum for Board meetings shall constitute at least half of the total Arbitration Panel roster;
- an award shall be deemed made when voted for by the majority vote of those present;
- in case of equality of votes of the Arbitration Panel members, the casting vote shall be that of the Chairperson;
- the Executive Secretary shall not have the vote when the Council makes awards.
1.10. At the initial phase of the Arbitration Panel formation, all its functions shall be performed directly by the Commission for Business Ethics.
Article 2 - Filing a Complaint.
2.1. Complaints shall be prepared in writing and sent to the Commission.
2.2. Complaints shall include the following:
- information about the Initiating Party and the Respondent;
- summary of the facts of the dispute;
- assumed violation of ethical standards and specific articles of the Code which allegedly have been violated;
- name of the arbitrator selected by the party from among the Arbitrators Pool.
2.3. The complaint shall be signed by a representative of the Initiating Party duly authorized to act on such issues. The confidentiality obligations shall be signed by the same person.
2.4. Attached to the complaint shall be any documents, including information, confirming the fact of business ethics violation.
Article 3 - Preliminary Review
3.1. Following the receipt of a complaint (or complaints, if both parties apply at the same time) the case shall be referred to the Chairperson of the Commission for Business Ethics ("the Chairperson").
3.2. The Chairperson shall review the complaint within the period not to exceed 7 calendar days from the day it was received, to determine first whether the subject of the complaint may be resolved by the Commission and whether the complaint has been properly prepared.
3.3. If the complaint does not correspond to the subject and objectives of the Commission's activities or has not been properly prepared, it shall be returned to the Initiating Party (-ies) with a motivated refusal. The decision to refuse shall be approved at the Arbitration Panel meeting and shall be sent by registered mail with advice of delivery and list of enclosures or handed over to representative(s) of the Initiating Party (-ies) against receipt.
3.4. If the Chairperson first determines that the form and substance of the complaint are in accordance with the Regulations, the complaint shall be accepted for resolution. The decision shall be approved at the Arbitration Board meeting, with the Initiating Party (-ies) being notified accordingly as well as the Respondent to whom in this case shall be sent copies of the complaint and enclosures. The documents shall be sent by registered mail with advice of delivery and list of enclosures or handed over to the Respondent's representative against receipt.
Article 4 - Preliminary Actions Aimed at Dispute Resolution
4.1. After receiving the advice of delivery confirming the receipt of copies of complaint and enclosures by the Respondent or the receipt by both parties of the notification of the case being accepted for resolution by the Commission, if the parties apply at the same time, the Chairperson shall contact both parties to suggest amicable settlement of the dispute that has caused the complaint filing.
4.2. At this phase the Chairperson shall suggest to the parties to negotiate or appoint a neutral mediator from among the Arbitrators Pool in order to facilitate the negotiations, with indication of the period granted for amicable settlement, which shall not exceed 7 calendar days.
4.3. If the negotiations or participation of the mediator have resulted in successful dispute resolution, the proceeding shall be terminated.
4.4. If the negotiations have not been successful during the granted period or if the parties (either of the parties) have waived amicable settlement of the dispute, the Arbitration Board shall be formed.
4.5. In this case the Chairperson shall send to the Respondent a notification of the necessity to furnish to the Commission a response to the complaint of the Initiating Party within seven calendar days from the date of receipt by the Respondent of the notification sent by registered mail with advice of delivery and list of enclosures or handed over to the Respondent's representative against receipt.
4.6. In the written response, the Respondent shall substantiate his stand and name the arbitrator he has selected from among the Arbitrators Pool. If the response does not contain all necessary information it shall not be deemed furnished. Within the same timeframe, the Respondent shall send to the Initiating Party a copy of the response furnished to the Commission.
Article 5 - Formation of the Arbitration Board
5.1. If the parties apply to the Commission at the same time, the parties shall indicate in the complaints the names of the arbitrators they have selected, and those arbitrators shall vote by ranking recorded in the transcript to select a third arbitrator from among the Arbitrators Pool, the said arbitrator to serve as Chairperson of this Arbitration Board.
5.2. The arbitrators shall be neutral and impartial in respect of the parties to the dispute and, upon expressing their consent to be included in the Arbitration Board, shall take into consideration any circumstances that may cause justified doubts about their neutrality and impartiality in respect of the dispute in question.
5.3. In case of an unilateral appeal to the Commission by the Initiating Party: after the Commission has received the Respondent's written response where he names the arbitrator he has selected, the two arbitrators selected by the two parties shall jointly select by ranking vote, to be recorded in the transcript, a third arbitrator from among the Arbitrators Pool, the said arbitrator to serve as Chairperson of this Arbitration Board.
5.4. Failure of the respondent to furnish a written response to the Commission within the specified timeframe shall be deemed to be a refusal of the respondent to participate in the Commission's dispute resolution proceedings and the case may be resolved only on the basis of the Initiating Party's complaint.
In this case the Arbitration Board shall be formed as follows:
- The Arbitration Panel by their own decision shall select 5 candidates from among the Arbitrators Pool roster who, in their opinion, are well-suited for resolving the case due to their professional competence and neutrality at the same time. From among the five candidates, a second arbitrator shall be appointed using random selection technique.
- The appointed second arbitrator and the arbitrator selected by the Initiating Party shall jointly select by ranking vote, to be recorded in the transcript, a third arbitrator from among the Commission's Arbitrators Pool, the said arbitrator to serve as Chairperson of this Arbitration Board.
5.5. In case of resolution of the case on the initiative of the Board of Directors:
5.5.1. The Board of Directors shall initiate a decision that the Commission resolve a case of violation of the Saint Petersburg Business Code of Honor by a party (-ies).
5.5.2. The Chairperson shall send to the party (-ies) a notification of the decision made by the Public Board and the requirement to furnish to the Commission a written response to agree or disagree to participation in the Commission's resolution of the case within seven calendar days from the time of receipt of the notification by the party (-ies). The notification shall be sent by registered mail with advice of delivery and list of enclosures or handed over to the party (-ies) representative against receipt.
5.5.3. In case of the party's (-ies') agreement to have the case resolved by the Commission, the written response shall indicate the name of the selected arbitrator. Following this, the Arbitration Board shall be formed as described in Clauses 5.1, 5.4.
5.5.4. Disagreement of a party (-ies) or failure to furnish a written response to the Commission within the specified timeframe shall be deemed to be a refusal from participation in the resolution of the case by the Commission, and the case may be resolved in the absence of the party (-ies).
5.5.5. In this case the Arbitration Board shall be formed as follows:
- The Arbitration Panel shall select 5 candidates from among the Arbitrators Pool who are best suited by their professional competence and are independent of the parties involved in the case;
- From the five candidates, two arbitrators shall be selected using the random selection technique;
- The two arbitrators shall jointly select by ranking vote, to be recorded in the transcript, a third arbitrator from among the Arbitrators Pool, the said arbitrator to serve as Chairperson of this Arbitration Board.
5.6. The date of appointment of the Arbitration Board Chairperson shall be the date of commencement of the dispute resolution proceeding.
5.7. The timeframe for formation of the Arbitration Board shall not exceed 5 calendar days from the date of written response or from the expiry date for furnishing such response.
Article 6 - Hearing
6.1. The Arbitration Board, with the administrative support of the Chairperson of the Commission, shall set a date and place of the hearing. The parties shall be notified of the time and place of the hearing by written notification sent by registered mail with advice of delivery or handed over to the parties' representatives against receipt.
6.2. The Arbitration Board shall use best efforts to arrange for the hearing to be conducted not later than 7 calendar days from the date of the commencement of dispute resolution.
6.3. Hearing of the case may be conducted in the absence of parties, provided the parties have been duly notified of the hearing date and place (the notification shall be deemed duly made if the Commission has received an acknowledgement of the parties being in receipt of the notification).
6.4. During the hearing, the Arbitration Board shall give both parties equal opportunity to present their arguments. Each party shall be entitled to participate in the hearing on its own or through its representative. The Arbitration Board may question either of the parties.
6.5. The hearing procedure and determination of the necessity to obtain additional information shall be fully in the competence of the Arbitration Board.
6.6. If, after the parties have presented their case, the Arbitration Board decides that it can arrive at an award on the basis of the parties' representations, the arbitrators shall stop the hearing and shall start the award-making procedure without participation of the parties.
6.7. If the Arbitration Board decides that it is necessary to require additional information and conduct further resolution proceeding, the next hearing shall be appointed. The dates and timeframe for providing additional information shall be set by the Arbitration Board but it may not exceed 7 calendar days.
6.8. During the hearings, the Arbitration Board may engage experts as necessary, including lawyers, etc. on a paid basis, subject to their signing of obligations to maintain confidentiality. Costs associated with engaging experts shall be borne by the parties in equal proportion.
6.9. The dispute resolution procedure shall involve maintaining a transcript of oral hearings in the documentary form to be signed by all arbitrators of the Arbitration Board and the parties or their representatives. In case of refusal of a party (-ies) or their representatives to sign such transcript, an appropriate note shall be made in the text of the Transcript indicating the reason for such refusal, to be signed by the party (-ies) or their representatives.
6.10. If the parties to a dispute recognize that the conflict cannot be settled by the Arbitration Panel, resolution of the dispute, subject to mutual agreement, shall be referred to any independent Court of Arbitration, Arbitral Tribunal, Conciliatory Commission.
Article 7 - Award of the Arbitration Board
7.1. The Award of the Arbitration Board shall include the following:
- Brief description of the facts of the case;
- Establishment or absence of the fact (or facts) of the alleged violation of the Saint Petersburg Business Code of Honor.
If the alleged violation of the Code has taken place, the Arbitrators' Award shall include:
7.1.1.Evaluation of the facts of violation of business ethics by the party (-ies) to the dispute;
7.1.2. Recommended methods of resolution of the conflict situation and required measures for their implementation;
7.1.3. Recommended measures of social influence which can be applied in case of a failure to execute (improper execution of) Clause 7.1.2 by a party (-ies):
1. Public reprobation.
2. Recommendation of the Board of Directors that the party be expelled from the FBB membership or membership in other associations.
3. Putting on the list of corporate partners having an unresolved conflict in the Business Reputation database.
4. Handing over the Award of the Arbitration Board to business associations, mass media, district administrations, Business Development Centers.
The Award of the Arbitration Board shall be prepared in writing and shall be signed by all Arbitration Board arbitrators with an indication of the date of the Award, names of the arbitrators and arbitrators' voting results related to passing the Award.
7.2. The Award of the Arbitration Board shall be valid if passed by a majority of two votes out of three possible votes. However, the Arbitration Board shall use best efforts to make their awards unanimous. In case of a disagreement of one of the arbitrators with the Award, his disagreement shall be noted as dissent.
7.3. The Arbitration Board shall use best efforts to pass an award within three calendar days from the last hearing.
Article 8 - Implementation of the Award
8.1. The Chairperson shall immediately send the copies of the Award of the Arbitration Board to the parties involved in the case and to the FBB Board of Directors or to the appropriate business association.
8.2. If the Award states that no violation of the Code has been established, the resolution of the matter shall be terminated.
8.3. If the Award states that violation of the Code has taken place, the parties shall be entitled to agree within five calendar days on a mutually acceptable dispute settlement based on the Award of the Arbitration Board.
8.4. If the parties have not come to an agreement on a mutually acceptable dispute settlement within the specified timeframe, the Arbitration Panel of the Commission shall, not later than within 10 days following the Award, review the extent of execution of Clause 7.1.2 and in case of a failure to execute (improper execution) shall take measures for the implementation of Clause 7.1.3 of the Arbitration Board's Award.
Article 9 - Manner of Payment of Fee When Applying to the Commission for Business Ethics, Its Refund and Application of Funds
9.1. When filing complaints with the Commission for Business Ethics, the Initiating Party (parties in equal proportion when applying at the same time) shall pay a fee.
9.2. In case of refusal of the Commission to accept the complaint for resolution, the paid-in fee shall be refunded within a period not to exceed 3 calendar days from the date of the appropriate notification (Clause 3.3) sent to the party (-ies).
9.3. The fee shall not be refundable in case of withdrawal of the application for dispute resolution, other settlement of controversy between the parties before commencement/ completion of the dispute resolution proceeding.
9.4. The fee shall be applied as follows:
- 50% shall be applied towards payment to arbitrators involved in this dispute resolution proceeding in equal proportion;
- 50% shall be applied towards building up the FBB budget.
9.5. When the case has been initiated by the Board of Directors, the fee shall be paid from the FBB funds.
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