Veeder, Van Vechten, 1922: The Birth of the ICC Arbitration Clause an the Demise of the Anglo-Soviet Urquhart Concession, in: Aksen/Böckstiegel/Mustill/Patocchi/Whitesell (eds.) Global Reflections on International Law, Commerce and Dispute Resolution, 2005, 881 et seq

The Anglo-Soviet Urquhart Concession (signed on 9 September 1922, but ultimatly rejected by Lenin for Soviet Russia on October 5, 1922)

Clause 22
For the settlement of disputes which may arise between the Government and the Concessionaire on questions of interpretation or fulfilment of the present Concession Agreement and of any additions or further agreements hereto, a special arbitration tribunal shall be formed.
[Note: Issues outside the area of privatelaw between the Government and the Concessionaire are not subject to the jurisdiction of the arbitration tribunal.]

1. The arbitration tribunal shall consist of five arbitrators. Within one month of the receipt of written notice from one of the parties, both parties shall appoint two arbitrators who must give their acceptance in writing. Within the same period their representatives shall mutually communicate to one another the names, professions and addresses of the arbitrators appointed by them. Within one month more, the four appointed arbitrators shall elect, by mutual consent, a fifth arbitrator who will act as president of the arbitration tribunal. If during this month no agreement be come to between the parties as to the election of a president, the nomination of the president shall be made as follows:The Government shall communicate to the Concessionaire the names of six candidates of worldwide or European fame as learned men, lawyers, engineers or public men from whom the Concessionaire has the right to select at its discretion a candidate who will be acknowledged by both parties as president of the arbitration tribunal.

2. In the event of death of one of the arbitrators, or of continued illness preventing him from fulfilling his duties, or of resignation, such arbitrator shall be replaced by another elected as provided above.

3. The arbitration tribunal shall have two secretaries, one appointed by each side. In the event of one resigning he shall be replaced by another secretary appointed in the same way. The arbitration tribunal may appoint its other personnel on terms at its discretion.

4. The arbitration tribunal shall sit at Moscow, but by decision of the president meetings in case of necessity may be held elsewhere, including abroad. The arbitration tribunal shall fix the time of its meetings.

5. The side which wishes to refer any question for decision to the arbitration tribunal must give written notice to the other side, after which a session of the arbitration tribunal is called. The notice of complaint together with all documents and papers and also an exposition of all other evidence which the side considers necessary for supporting its demands, shall be sent, with certified copies of the notice and all documents in duplicate for the other side, to the secretariat of the arbitration tribunal. Within one month from the receipt of the copy notice of complaint, the other side must present to the arbitration tribunal a reply to the complaint, together with all documents and papers and all other evidence which that side considers necessary for refuting the complaint, together with certified copies thereof and of all documents in duplicate for the other side.

6. On the expiry of a fortnight from the date of receipt of the reply, the arbitration tribunal shall fix a date for hearing, sending both parties notice thereof.

7. The decisions of the arbitration tribunal are obligatory and must be fulfilled immediately.

8. If the Concessionaire, on receiving a request from the Government to form an arbitration tribunal within the period provided, refuses to do so or if the parties do not agree on a president and the Concessionaire refuses to appoint a president from the six candidates submitted by the Government, the Government has the right to refer the question in dispute to the People's Court in Moscow, to whose jurisdiction the Concessionaire shall in such case submit. In the same way, if the Government for its part refuses to form an arbitration tribunal, or does not present a list of candidates for the selection of a president, the Concessionaire has the right to refer the question in dispute to the London Courts, to whose jurisdiction the Government shall in such case submit.


[Note: Reference to a national court on a certain matter in the event of refusal to form the arbitration tribunal does not relieve the parties from the obligation to form an arbitration tribunal in accordance with this agreement and to submit to its jurisdiction.]



In a letter dated 20 September to Stalin, as instructed by the Politburo, L.M. Karakhan (Deputy Commissar for Foreign A"airs) summarised, inter alia , the issue over the arbitration clause: 'By the Politburo's decision of 24 August arbitration was allowed for the purpose of determining the amount of damage su"ered by Urquhart from the actions of the Soviet Government. However, in the agreement the jurisdiction of the arbitration tribunal is broadened to all disputes arising from the interpretation and implementation of the agreement. Arbitration is objectionable in principle because it expresses the concessionaire's mistrust of the Russian Court; and it validates that mistrust. In a practical sense, however, the creation of this arbitration tribunal does not present any danger to us; and if we do not make any hopeless formal mistakes, it will produce an arbitration tribunal with our majority or the transfer of the dispute to our [Soviet] Court. During the current domestic and international situation agreeing to arbitration is objectionable in general. However, there is no danger that based on the principle of preferential status it would spread to others, because this agreement grants this benefit to Urquhart individually and not to all British citizens in general.' Karakhan concluded his report: 'the political significance of the agreement with Urquhart and its role in resuming economic relations with Europe is colossal. Even now, before its ratification by the Soviet Government, this agreement has caused much excitement among financial and industrial leaders in Europe. This agreement means that "friendly" relations with the City of London are restored. Urquhart has already given several interviews in which he spoke with almost love and admiration for Soviet Russia and the charms of Soviet power . . .'This was true. On his return to London, Urquhart had also spoken privately to Klyshko, Krasin's deputy at the Soviet Trade Delegation. As reported to Krasin on 14 September, clutching a pile of congratulatory telegrams and letters on the successful conclusion of his negotiations, Urquhart had said that he was confident that the concession agreement would change European public opinion favourably towards the Soviet Government and that, not being motivated by monetary considerations, he was 'happy and proud' to be a pioneer for the rebirth of Russian industry: 'I love the Russian people and developing Russian industry is my life's mission. And now I am pursuing one goal only, to help my Russian motherland. I trust the Soviet Government fully and believe that it will give me an opportunity to do productive work . . .' This language was not wholly typical of the Scots financier; and perhaps Krasin's deputy found it di!cult to avoid all embellishments helpful to Krasin's cause in Moscow.