Ilya Nikiforov is a founding member of Egorov Puginsky Afanasiev & Partners, and highly visible in Russia’s arbitration market. He has a renowned practice in finance, energy, construction and technology arbitration, and is named by Chambers as an eminent practitioner. Ilya is an executive committee member of the Swedish Arbitration Association, and officer of the board at the Russian Arbitration Association. He is listed as an arbitrator by ICDR (including the Energy Arbitrators List), SIAC (first panel member from Russia), HKIAC, KCAB, VIAC, ICAC (Moscow) and other European institutions.
What motivated you to pursue a legal career?
I did not picture a lifelong career in jurisprudence when I began my law studies. I simply thought a law degree would not be a burden for personal growth in the business or political spheres. But it occurred to me that solving legal (and business) puzzles is what I enjoy doing (and people say I do it with ingenuity). Combining this with an ambition to establish my own law firm (I am a founding member of EPAM), the practice of business law became my occupation.
How important is your background in computer engineering and IT to your legal practice?
Understanding technology gives me an edge in law practice. I was early adopter of novel digital tools in law business. Life flourishes on the shores – a borderline where water meets earth. Law practice equally thrives at the cutting edge of business development, which by and large is IT today.
I have also discovered that structured thinking, a skill honed by computer engineering students, fits very well with the way legal concepts apply, and uses the mechanics of legal thinking. I can formulate a search request – be it via Google or a LexisNexis equivalent – that yields focused and relevant material on a par with, or better than, what my millennial colleagues can do.
It just so happens that I am an IT guy with built-in empathy, emotional intelligence and communication skills; these are not necessarily the qualities you find in computer nerds.
This is also valuable for my IT clients; they skip tutoring me on the practical aspects of their projects.
What impact do external governmental and policy-related pressures have on arbitration proceedings?
Arbitration is under scrutiny – and under fire – on the regulatory side. I coined the term “creeping nationalisation” for arbitration. It is the flipside of what was once a noble occupation drifting into becoming an industry. Governments may be tempted to leash these dispute resolution services into regulated industry. Already, compliance with regulatory measures such as sanctions, reporting duties and data transfer (GDPR) feature prominently (and impede the lean conduct of an arbitration).
Russia has taken steps to “domesticate” international arbitration by mandating that certain cases (such as government procurement and shareholder disputes) are only conducted within jurisdictions and administered by an “accredited” institution.
What are the main challenges currently facing arbitration lawyers in Russia?
Russian arbitration has yet to make its name on the global scene. Our country is rich with talent. Already I see how domestic teams sometimes deliver equal – or better – counsel compared with foreign colleagues. However, they are still “discounted” or neglected by many participants as “third-world” lawyers.
This is a competitive advantage: the counterparty and its counsel may become relaxed, maybe even careless, and lose a point or two. However, there is also a disadvantage to not having a pre-established reputation with the tribunal.
The domestic arbitration community needs to overcome its prejudices and discrimination – all the qualities are there for us to become top-tier players worldwide. It hasn’t been long since EPAM became the only crew from the post-Soviet region featured in GAR’s international top 100 listing.
Consider this: in past years Russian teams have consistently performed well in – or even won – moot court competitions such as the Willem C Vis and Philip C Jessup competitions. Soon these kids will enter real arbitral hearing rooms all over the world. I am proud when alumni of champion teams apply for apprenticeships with my firm, and then continue working as associates.
They are from a new generation that I trust to make waves not only in a democratic academy setting, but also on the real arbitration scene.
To what extent is Russia becoming a hub for alternative dispute resolution, particularly for East–West disputes?
Russia is well placed to restate its position as the East–West dispute resolution centre. There is a natural trend for appointing Russian arbitrators in matters with a Central Asian or Eastern European angle. The language is universally understood in the region; the language and culture are a blend of the neighbouring nations. We run our own offices in Ukraine and Belarus. Thus business and corporate regulation feature on my firm-management dashboard. To an arbitrator in this domain, the mechanics of the local legal systems are immediately clear.
The private law is the same in neighbouring countries. The lion’s share of our basic legal text – the Civil Code – for Kazakhstan, Belarus and Ukraine is a verbatim replica of the model CIS Civil Code. In turn, Russia’s regulation became the source for this Code. Russian law is poised to become a neutral, but readily understood, governing substantive law of transactions.
Arbitration services are not liable for VAT in Russia. This helps with arbitrators’ fees and institutional services. And travel is becoming easier: there are visa-free arrangements for more than 50 countries. Last year the electronic visa facility was launched, and now you can arrange a visa for stays of up to seven days from your laptop. Early adopters told me an electronic confirmation could be dispatched within the same day.
International institutions (Vienna, Hong Kong) have notified the Justice Ministry of their intent to administer proceedings on Russian soil.
I believe that the interplay of these factors will lead to Russia – and, specifically, St Petersburg – becoming a renowned arbitration centre.
How has arbitration in post-Soviet Russia evolved differently to proceedings in other parts of Europe and Central Asia?
Arbitration traditions are less paternalistic than in Central Asia, but still orthodox. Prominent arbitrators are academics, as opposed to practising lawyers. Their perspectives are sometimes removed from the realities of doing business. There are various factors they should be aware of.
Arbitration proceeds faster than in most jurisdictions. Counsel should expect only a single hearing, as opposed to a series of hearings. The style is fast and brutal – concentrate on key arguments, rather than not leaving any stone unturned.
“Sandbagging” is standard practice in Russian dispute resolution. Important arguments and issues may be withheld until the hearing. Russian counsels are veterans of an accelerated court procedure, which requires that advocates react quickly and shrewdly to surprises with evidence and counter-argument.
It is customary for witnesses to appear and testify in person. Written witness statements may be used either in support or in lieu of oral testimony, preferably certified by a notary. Cross-examination is typically permitted, although a confrontational approach will generally draw a rebuke from the tribunal.
Russian legal culture tends to discount anything that is not written down. As a result, domestic tribunals give considerably more weight to documentary evidence over oral testimony in determining questions of fact (but paradoxically, they prefer oral arguments by counsel over written legal briefs).
Most tribunals take a formalistic approach to the admissibility of documentary evidence. Parties must submit originals or authenticated copies and, where appropriate, the documents must be accompanied by certified translations.
Beware of the language trap. Absent an agreement to the contrary, the language of the arbitration in Moscow ICAC will be Russian – not the language of the contract or parties’ business.
What are your main priorities for the firm’s development over the next five years?
It is important to keep up with technology, and to streamline systems and procedures. We have projects in the pipeline for that. The volatile and uncertain environment prompts horizon-scanning and contingency planning; we are making provisions accordingly. I foresee compliance (including white-collar crime) and regulatory work will continue to grow.
It is time to regroup! We are a national champion, but the firm originated in St Petersburg. It is the Russian government’s policy to unload Moscow from the concentration of federal functions. We are gearing up for the transition to Gazprom headquarters, and the city’s Supreme and Constitutional Courts.
Transnational projects are a prominent part of our portfolio. The integration into Lex Mundi’s seamless service initiative is a priority. This powerful network of leading law firms has adopted IT systems (eg, the HighQ cloud) and internal protocols to deliver one-stop solutions to transnational clients. I was thrilled to hear from a general counsel of a major oil brand that, in his experience, the quality and efficiency delivered by the network surpass that of global law firms. So, the service platform is already there. Showing the world that independent national law firms can work as smoothly as a “one brand” operator is on the business-development page of my diary.
What advice would you give to someone who would like to be in your position one day?
Take risks and do not give up (this does not mean being stubborn). Be wary of making money; have your own economics goal to be a driver of your efforts. True joy and success accompany those who collaborate with and support colleagues, and work to overcome the client’s hurdles. I would not advise anyone to mimic someone else, including Ilya Nikiforov. Be yourself – find out what you love to do and what excites you, and follow that road.