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Validity of arbitral agreements clarified

21.02.2007

The Supreme Court confirms that an arbitral agreement may be disregarded if neither party has relied on the agreement in due course. According to the Estonian Code of Civil Procedure, one criterion for admissibility of an action is whether the parties have agreed to refer the dispute to arbitration, except in the case where the action itself contests the validity of the arbitral agreement. The Supreme Court points out that all objections to the admissibility of an action or appeal should be submitted concurrently in response to the action or appeal; or, if no response is given, at the first hearing or when the first substantive petition is submitted to the court. In case the parties' behaviour demonstrates that they do not wish to rely on the arbitral agreement, the matter will be settled in the court.

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