Text consolidated by Valsts valodas centrs (State Language Centre) with amending laws of: 28 November 2014 (Constitutional Court Judgment) [shall come into force from 28 November 2014]; 6 October 2016 [shall come into force from 3 November 2016]. If a whole or part of a section has been amended, the date of the amending law appears in square brackets at the end of the section. If a whole section, paragraph or clause has been deleted, the date of the deletion appears in square brackets beside the deleted section, paragraph or clause.

The Saeima¹ has adopted and
the President has proclaimed the following Law:

Arbitration Law

Chapter I
General Provisions

Section 1. Purpose and Scope of the Application of This Law

(1) The purpose of this Law is to prescribe the procedures for setting up arbitration courts and the basic principles of their activity in order to ensure efficient and fair settlement of civil legal disputes through arbitration.

(2) The provisions of this Law shall apply to arbitration proceedings in Latvia.

Section 2. Arbitration Court and Establishment of an Arbitration Court

(1) An arbitration court may be established in accordance with the procedures laid down in this Law for resolving a specific civil legal dispute (hereinafter - the ad hoc arbitration), or for permanent operation (hereinafter - the permanent arbitration court).

(2) The permanent arbitration court may be established by an association registered with the Register of Enterprises (founder of the permanent arbitration court), whose purpose of activity is the operation of the permanent arbitration court.

(3) The ad hoc arbitration may be established on the basis of an agreement between the parties.

Section 3. Legal Framework of an Arbitration Court

(1) The permanent arbitration court shall operate in accordance with this Law and on the basis of its rules of procedure, whereas the ad hoc arbitration shall be carried out in accordance with this Law.

(2) An arbitration court shall examine civil legal disputes on the basis of an agreement between the parties, insofar as it is not in contradiction with the Constitution of the Republic of Latvia, this Law, as well as other laws and regulations.

(3) Organisation of arbitration proceedings and resolution of disputes through arbitration is not considered a commercial activity.

Section 4. Organisation of the Permanent Arbitration Court

(1) The founder of the permanent arbitration court shall ensure for the permanent arbitration court:

1) separate premises suited for the operation of an arbitration court;

2) the personnel necessary for record-keeping and receiving of visitors;

3) the maintenance of a website.

(2) The permanent arbitration court shall publish the following information on its website:

1) the name and address of the permanent arbitration court;

2) the procedures and office hours for receiving visitors;

3) the costs of arbitration proceedings and the account number to which payments for arbitration proceedings shall be transferred;

4) the rules of procedure of the permanent arbitration court;

5) a list containing a minimum of 10 arbitrators of the permanent arbitration court, specifying their given names and surnames;

6) contact information (address of the location, telephone number, e-mail address);

7) other necessary information.

(3) The founder of the permanent arbitration court shall submit to the Register of Enterprises the consent issued by the owner of the immovable property (building or apartment property) to registration of the address of location of the arbitration court in the relevant building or apartment property. The consent shall indicate the address of the immovable property, the cadastre number, the cadastre designation (if the immovable property consists of several buildings) and the given name, surname, and personal identity number of the owner (if a person does not have a personal identity number - the date of birth, the number and date of issue of the personal identification document, the state and institution which issued the document) or the name (firm) and registration number. The consent need not be given if the address of the location of the arbitration court to be registered is in the premises owned by the founder of the arbitration court.

(4) The documents addressed to the permanent arbitration court shall be sent to the address of the location thereof.

[6 October 2016]

Section 5. Jurisdiction of an Arbitration Court

(1) An arbitration court shall resolve any civil legal disputes, provided that the parties have voluntarily agreed upon and concluded an arbitration agreement, except for the following disputes:

1) the adjudication of which may infringe the rights of such person who is not a party to the arbitration agreement;

2) where at least one of the parties is a State or local government authority, or an award regarding which by the arbitration court may infringe the rights of the State or local government authority;

3) related to entries made in the Civil Records Register;

4) on the rights and obligations, or interests protected by law, of such persons who are under guardianship or trusteeship;

5) over the establishment, alteration or termination of property rights in regard to immovable property, if a party to the dispute is a person whose rights to acquire the immovable property for ownership, possession or use are restricted by law;

6) regarding the eviction of natural persons from residential premises;

7) between an employee and an employer, provided that the dispute has arisen due to concluding, amending, terminating or fulfilling an employment contract, or due to applying or interpreting legal norms, or the provisions of a collective agreement or work procedure regulations (individual employment relations dispute);

8) regarding the rights and obligations of persons who have entered into insolvency procedures.

(2) An arbitration court shall not resolve any disputes related to matters to be examined under special forms of procedure.

Chapter II
Operation of an Arbitration Court and the Basis for Its Termination

Section 6. Registration of the Permanent Arbitration Court

(1) The permanent arbitration court shall commence operations after its registration in the Arbitration Court Register maintained by the Register of Enterprises.

(2) A State fee shall be paid when making an entry in the Arbitration Court Register. The amount of the State fee and its payment procedures, as well as the procedures for registering the permanent arbitration court with and exclusion thereof from the Arbitration Court Register shall be stipulated by the Cabinet.

Section 7. Name of the Permanent Arbitration Court

(1) The name of the permanent arbitration court may not coincide with a name of an arbitration court already registered or currently under registration with the Arbitration Court Register, or with a name (firm name) currently under registration or already registered with any of the registers maintained by the Register of Enterprises, and it may not include any misleading information regarding the purpose of operation, type and legal form of the permanent arbitration court.

(2) The restrictions and provisions for the distinction specified for merchants in respect of selecting a name (firm name) shall also apply to the names of permanent arbitration courts.

(3) The name of the permanent arbitration court may not be contrary to moral principles.

(4) Only letters of the Latvian or Latin alphabet may be included in the name of the permanent arbitration court.

Section 8. Rules of Procedure of the Permanent Arbitration Court

(1) The rules of procedure of the permanent arbitration court shall specify:

1) the founder of the permanent arbitration court;

2) the name of the arbitration court. In addition to the name of the arbitration court in Latvian, the rules of procedure of the permanent arbitration court may also indicate the translation of the name of the arbitration court in one or several foreign languages;

2¹) the website;

3) the procedures for appointing and terminating the office of arbitrators;

4) the procedures for the arbitration court proceedings and the settlement of disputes - procedural deadlines, the procedures for submitting counterclaims, the procedures and bases for examining or postponing disputes, and suspending and restoring arbitration proceedings. The rules of procedure of the permanent arbitration court may also set out other procedural matters in accordance with this Law;

5) the procedures by which signatures of arbitrators on awards shall be certified;

6) the costs of arbitration proceedings, arbitrator fees and procedures for the payment thereof, as well as the procedures for reimbursing the costs of arbitration proceedings;

7) other provisions governing the operation or procedures of an arbitration court.

(2) The founder of the permanent arbitration court shall make a list of arbitrators of the permanent arbitration court in which at least 10 arbitrators shall be included.

(2¹) The list of arbitrators of the permanent arbitration court shall indicate the given name, surname, and personal identity number (if the person does not have a personal identity number - the date of birth, the number and date of issue of the personal identification document, the state and institution which issued the document) of each of the arbitrators included therein. Personal identity number of an arbitrator (if the person does not have a personal identity number - the date of birth, the number and date of issue of the personal identification document, the state and institution which issued the document) is not publicly available information.

(3) The rules of procedure of the permanent arbitration court, as well as a certification confirming that the arbitrators included in the list meet the requirements of Section 14, Paragraphs two and four of this Law and that they are not subject to the restrictions referred to in Section 15 of this Law, as well as documents proving the qualification of the arbitrators shall be submitted to the Register of Enterprises.

(4) The rules of procedure of the permanent arbitration court shall be signed by the founder of the permanent arbitration court.

(5) If amendments have been made to the rules of procedure of the permanent arbitration court, the founder of the permanent arbitration court shall submit to the Register of Enterprises the updated rules of procedure not later than within seven days after the amendments have been made.

(5¹) If amendments have been made to the list of arbitrators of the permanent arbitration court, the founder of the permanent arbitration court shall submit to the Register of Enterprises an application for making changes in the entries of the Arbitration Court Register. If a new arbitrator is included in the list of arbitration court, a certification confirming that the abovementioned arbitrator meets the requirements of Section 14, Paragraphs two and four of this Law and he or she is not subject to the restrictions referred to in Section 15 of this Law, as well as documents proving the qualification of the arbitrator shall be appended to the application.

(6) The founder of the permanent arbitration court shall, on an annual basis by 1 March, submit to the Register of Enterprises a certification confirming that the permanent arbitration court and its list of arbitrators meet the requirements of Section 4 of this Law.

(7) The Register of Enterprises shall ensure that the rules of procedure of the permanent arbitration courts registered with the Arbitration Court Register maintained by the Register of Enterprises are available on the website of the Register of Enterprises free of charge.

[6 October 2016 / New wording of Paragraphs two and five, Paragraph 5.¹, and also amendments to Paragraph three shall come into force on 1 March 2017. See Paragraph 10 of Transitional Provisions]

Section 9. Supervision of an Arbitration Court and Grounds for the Termination of Operation

(1) The operation of the permanent arbitration court shall be terminated with a decision of its founder or the Register of Enterprises.

(1¹) The Register of Enterprises shall supervise the conformity of the permanent arbitration court to the requirements of Section 2, Paragraph two, Section 4, Paragraph one, Clause 3, Paragraphs two and four, Sections 7 and 8, Section 14, Paragraphs one, two, three, and 4.² of this Law.

(2) The Register of Enterprises shall take the decision to exclude the permanent arbitration court from the Arbitration Court Register if:

1) the permanent arbitration court does not conform to any of the requirements laid down in Section 2, Paragraph two, Section 4, Paragraph one, Clause 3, and Paragraph two of this Law;

2) the permanent arbitration court cannot be reached at the location specified by it;

3) the founder of the permanent arbitration court has failed to submit the certification referred to in Section 8, Paragraph six of this Law or has provided false information;

4) the requirement of Section 14, Paragraph four of this Law has not been conformed to;

5) the founder of the permanent arbitration court has failed to fulfil the requirement of Section 14, Paragraph 4.² of this Law.

(3) The operation of the ad hoc arbitration institution shall be terminated when the dispute for the resolution of which the arbitration institution was established is resolved.

[6 October 2016]

Chapter III
Arbitration Agreement

Section 10. Concept of an Arbitration Agreement

(1) An arbitration agreement is an agreement entered into between the parties in accordance with the procedures laid down in this Law in order to refer a civil legal dispute for resolution by an arbitration court.

(2) The parties may agree to refer for resolution by an arbitration court a civil legal dispute which has already arisen or may arise in future.

Section 11. Parties to an Arbitration Agreement

An arbitration agreement may be entered into by any natural person with the capacity to act, a legal person governed by private law, or a legal person governed by public law in the private law area.

Section 12. Form and Content of an Arbitration Agreement

(1) An arbitration agreement shall be entered into in written form. It may be included as a separate provision (arbitration clause) in any agreement that contains a liability, in relation to which a civil legal dispute has arisen or may arise in the future, taking into account the restrictions set out in Section 5, Paragraph one of this Law. An arbitration agreement may be modified or cancelled according to an agreement made in writing between the parties.

(2) Such agreement, which has been entered into by exchange of items sent via post or by means of electronic communication by the parties and ensuring that the intent of both parties to refer an existing or possible civil legal dispute for resolution to an arbitration court is recorded with a safe electronic signature, shall also be considered an agreement in writing.

(3) The parties may agree on the following in an arbitration agreement:

1) the permanent arbitration court or the ad hoc arbitration institution;

2) the location of the arbitration proceedings;

3) the language of the arbitration proceedings;

4) the number of arbitrators in the composition of the arbitration court in conformity with the provisions of Section 29 of this Law;

5) the procedures for covering the costs of an arbitration court;

6) other conditions which the parties regard as important.

Section 13. Validity of an Arbitration Agreement

(1) Persons who have entered into an arbitration agreement in order to refer a civil legal dispute for resolution to an arbitration court are not entitled to withdraw from such agreement, unless the arbitration agreement is modified or revoked in accordance with the procedures laid down in the law or by the agreement.

(2) An arbitration agreement shall be valid as long as the legal relationship, due to which it has been entered into, has not been terminated.

(3) If an arbitration agreement has been included in another agreement as a separate provision, the arbitration agreement shall be considered as an independent agreement. The arbitration agreement shall remain in effect, if the agreement, in which it is included, has expired or is declared null and void.

(4) If a claim is assigned, the right of claim shall pass to the assignee apart from the arbitration clause regarding the resolution of a civil legal dispute in an arbitration court as included in the agreement.

Chapter IV
Arbitrator

Section 14. Requirements for an Arbitrator

(1) An arbitrator shall be a person who conforms to the provisions of this Law and is appointed to resolve a civil legal dispute in accordance with an arbitration agreement and the provisions of this Law.

(2) Any person of legal age may be appointed as an arbitrator, provided that such person has agreed in writing to be included in the list of arbitrators of the permanent arbitration court and provided that he or she meets the following requirements:

1) a trusteeship has not been established for him or her;

2) he or she has an impeccable reputation;

3) he or she has acquired higher vocational or academic education (except first-level vocational education) and the qualification of a lawyer;

4) he or she has at least three years of practical work experience in working in a position of academic staff specialising in law at an institution of higher education or in another position specialising in law.

(3) If a person who may work as an advocate in accordance with the Advocacy Law, except for assistants to sworn advocates, has agreed in writing to act as an arbitrator of the permanent arbitration court, and no restrictions set out in Section 15 of this Law apply to him or her, the conformity of this person with the requirements laid down in Paragraph two of this Section shall be considered verified as of the moment when such person has been included in the list of sworn advocates.

(4) An arbitrator of the permanent arbitration court may not be included in lists of more than three permanent arbitration courts.

(4¹) The arbitrator may revoke his or her consent to be included in the list of arbitrators of the permanent arbitration court at any time by informing the permanent arbitration court thereof in writing.

(4²) The founder of the permanent arbitration court shall, within 14 days after receipt of the notification referred to in Paragraph 4.¹ of this Section, make amendments to the list of arbitrators of the permanent arbitration court and notify the Register of Enterprises thereof in accordance with the procedures laid down in this Law.

(5) Arbitrators shall resolve civil legal disputes in an independent, objective and fair manner.

[6 October 2016]

Section 15. Persons who May Not be Appointed as Arbitrators

The following persons may not be appointed as arbitrators:

1) who do not conform to the requirements laid down in Section 14, Paragraph two of this Law;

2) who have been recognised as suspects or accused in criminal proceedings regarding commitment of an intentional criminal offence;

3) against whom criminal proceedings regarding commitment of an intentional criminal offence have been terminated for reasons other than exoneration;

4) who have been punished for committing an intentional criminal offence - regardless of the conviction being extinguished or removed;

5) who have been convicted of committing an intentional criminal offence, even if they have been released from serving the punishment due to a limitation period, clemency or amnesty;

6) who have had insolvency proceedings of a natural person proclaimed within the last five years.

Section 16. Arbitrators Not Allowed to Participate in the Examination of a Matter and Recusal of an Arbitrator

(1) An arbitrator is not entitled to participate in the examination of a matter if he or she:

1) has been a representative of any of the parties, or an expert or witness in a matter where the same parties have participated;

2) is in a relationship of kinship to the third degree, or relationship of affinity to the second degree, with any participant in the matter or representatives thereof;

3) is in a relationship of kinship to the third degree, or relationship of affinity to the second degree, with any arbitrator who is a member of the arbitration panel examining the civil legal dispute;

4) is in an employment relationship with any participant in the civil legal dispute or their representative, or if the arbitrator provides legal assistance to any of the parties;

5) or his or her spouse, or kin to the third degree, or business partner, or commercial company, which is a party to the civil legal dispute and whose participant, shareholder, member, or member of supervisory, control or executive body is this arbitrator or his or her kin to the third degree, has financial interest in the outcome of the civil legal dispute.

(2) An arbitrator shall, not later than within five days from the day when the arbitrator finds out about his or her appointment, or from the day when the arbitrator finds out about any circumstances which could cause reasonable doubt as to the objectivity and independence of the arbitrator, recuse himself or herself by stating the reasons for such recusal.

(3) If an arbitrator has recused himself or herself, a new arbitrator shall be appointed in accordance with the procedures laid down in the agreement or the rules of procedure of the permanent arbitration court.

Section 17. Removal of an Arbitrator

(1) A party to the case may remove an arbitrator if:

1) the restrictions referred to in Section 16, Paragraph one of this Law regarding participation of an arbitrator in the examination of a matter apply to him or her and the arbitrator has not recused himself or herself;

2) the arbitrator does not conform to the requirements of this Law;

3) the arbitrator does not conform to the requirements agreed upon by the parties;

4) there are other circumstances that cause reasonable doubt as to the objectivity and independence of the arbitrator.

(2) A person who is asked to consent to their appointment as an arbitrator must disclose to the parties any circumstances, which may cause reasonable doubt as to the objectivity and independence of this person. If such circumstances have arisen or have become known after initiation of arbitration proceedings, but before completion thereof, the arbitrator shall disclose them to the parties without delay.

(3) A party may remove the arbitrator whom it has appointed, or in whose appointment it has participated, only where the grounds for refusal have become known to such party after appointment of the arbitrator.

(4) Parties may agree on the procedures for the removal of an arbitrator in an agreement. Where the permanent arbitration court is resolving a dispute and the parties have not agreed on the procedures for the removal of an arbitrator, they shall be determined in accordance with this Law.

(5) A party may apply for the removal of an arbitrator within five days from the day on which the party has become informed of the appointment of the arbitrator, or becomes informed of any of the circumstances referred to in Paragraph one of this Section, by sending a notice to the arbitration court specifying the arbitrator that the party wishes to remove and the grounds for the removal.

(6) If the arbitrator to whom removal has been declared does not withdraw from performing his or her duties, the arbitration panel or the arbitrator himself or herself shall decide on the removal within five days after receipt of the notice.

(7) If a removal of an arbitrator is accepted, a new arbitrator shall be appointed in accordance with the procedures laid down in the agreement or the rules of procedure of the permanent arbitration court.

Section 18. Termination of the Term of Office of an Arbitrator

(1) The term of office of an arbitrator shall be terminated:

1) if the refusal of the arbitrator has been accepted;

2) if the arbitrator has recused himself or herself from resolving a civil legal dispute;

3) if the parties have agreed on the dismissal of the arbitrator;

4) if the arbitrator is subject to the restrictions specified in Section 15 of this Law;

5) upon his or her death;

6) in other cases laid down in the rules of procedure of the permanent arbitration court.

(2) Parties may freely agree on the procedures for terminating the term of office of an arbitrator. If the parties have not agreed thereon and the permanent arbitration court examines the civil legal dispute, the provisions of the rules of procedure of the permanent arbitration court shall apply.

(3) If an arbitrator's term of office is terminated, a new arbitrator shall be appointed in accordance with the procedures laid down in Section 30 of this Law.

Chapter V
Principles of Arbitration Proceedings

Section 19. Equality of Parties

Parties to the arbitration proceedings shall have equal procedural rights. The arbitration panel shall ensure that the parties have equal opportunity to exercise their rights for the protection of their interests.

Section 20. Adversarial Proceedings

In the course of reviewing a civil legal dispute, the parties shall exercise their procedural rights in the form of adversary proceedings. In adversary proceedings, the parties may submit evidence, provide explanations and applications addressed to the arbitration panel, participate in the examination and assessment of evidence, and take other procedural actions.

Section 21. Right to Freely Determine Arbitration Proceedings

The parties are entitled to freely determine the procedures for arbitration proceedings within the framework of this Law. The procedures of the permanent arbitration court shall be organised according to the rules of procedure of the permanent arbitration court, unless the parties have agreed upon other procedures for arbitration proceedings in an arbitration agreement, insofar as it is not in contradiction with the rules of procedure of the permanent arbitration court.

Section 22. Independence of an Arbitrator

An arbitrator shall perform his or her duties in good faith, without being subject to any influence. An arbitrator shall be objective and independent in his or her operations and decision-making.

Section 23. Confidentiality of Arbitration Proceedings

(1) Arbitration proceedings shall be confidential, unless the parties have agreed otherwise.

(2) Arbitration court hearings shall be closed, and the arbitration panel shall not disclose to any third parties or publish the information concerning the arbitration proceedings, unless the parties have agreed otherwise. Persons who are not parties to the arbitration proceedings may only be present at an arbitration court hearing with the consent of the parties.

(3) Information regarding arbitration proceedings shall be provided to persons who are entitled to receive such information for the performance of functions laid down in the law.

Chapter VI
Preparation of Arbitration Proceedings

Section 24. Determination of Jurisdiction over a Dispute

(1) The arbitration panel shall decide on the arbitral jurisdiction of a civil legal dispute, including the validity of an arbitration agreement. The arbitration panel may decide on a matter concerning the jurisdiction over a dispute at any stage of the arbitration proceedings.

(2) An application for the fact that a civil legal dispute is not subject to an arbitration court may be submitted by a party until the term for submission of a reference expires.

[Paragraph one, insofar as it denies the right to dispute the competence of an arbitration court in a general jurisdiction court, has been recognised to be in conflict with the Constitution of the Republic of Latvia with the Constitutional Court judgement of 28 November 2014, which entered into force on 28 November 2014.]

Section 25. Location where Pre-trial Procedures are to Take Place

The arbitration panel has the right to freely determine the location of arbitration proceedings, taking into account efficiency considerations, if it has not been agreed upon by the parties.

Section 26. Determining the Procedures for Arbitration Proceedings

(1) Arbitration proceedings shall be organised in accordance with the provisions of the arbitration agreement, the rules of procedure of the permanent arbitration court, laws and regulations, and general legal principles.

(2) If parties have agreed to refer a civil legal dispute for resolution to the permanent arbitration court, but have not agreed on the procedures for arbitration proceedings, the civil legal dispute shall be resolved according to the procedures laid down in the rules of procedure of the permanent arbitration court and this Law.

(3) If a civil legal dispute is to be resolved by the ad hoc arbitration and the parties have not agreed on the procedures for arbitration proceedings, the ad hoc arbitration panel shall determine the procedures for arbitration proceedings in accordance with this Law.

(4) The chairperson of an arbitration panel may independently decide on procedural matters, if he or she has been entrusted with this by the parties or other arbitrators.

Section 27. Language of Arbitration Proceedings

(1) The parties have the right to agree on the language of arbitration proceedings. If the parties have not agreed thereon, the language of the arbitration proceedings shall be determined by the arbitration panel.

(2) An arbitration panel may require from parties a translation of any documentary evidence into the language, in which the arbitration proceedings are conducted.

Section 28. Deadlines of Arbitration Proceedings

The arbitration panel shall determine the procedural deadlines, and the procedures for the extension or renewal thereof, within the limits of the deadlines laid down in this Law or the rules of procedure of the permanent arbitration court. Until the arbitration panel is approved, the procedural deadlines, and the procedures for the extension or renewal thereof, shall be established in accordance with the rules of procedure of the permanent arbitration court.

Section 29. Number of Arbitrators in an Arbitration Panel

(1) The parties may agree on the number of arbitrators in an arbitration panel, and the number of arbitrators shall be comprised of an odd number. If the parties have not agreed on the number of arbitrators, and if the rules of procedure of the permanent arbitration court do not provide otherwise, the arbitration court shall consist of three arbitrators.

(2) An arbitration court may consist of one arbitrator, if the parties so agree.

Section 30. Appointment of Arbitrators

(1) The procedures for appointing arbitrators shall be determined by the parties.

(2) The parties may entrust the appointment of arbitrators to any natural person with the capacity to act or legal person.

(3) If the parties have agreed that a civil legal dispute shall be referred for resolution by the permanent arbitration court, the arbitrators shall be appointed from the list of arbitrators of the permanent arbitration court in accordance with the rules of procedure of the permanent arbitration court, taking into account the equality of the parties.

(4) If the parties have agreed that a dispute shall be referred for resolution by the ad hoc arbitration institution, each party shall appoint one arbitrator. Both arbitrators shall, by mutual agreement, appoint the third arbitrator, who shall be the chairperson of the arbitration panel. An arbitration panel may consist of one arbitrator, if the parties so agree.

(5) If a party appoints an arbitrator and notifies the other party thereof, it may not dismiss such arbitrator without the consent of the other party.

Section 31. Arbitration Court Notifications and Mailings

(1) The documents prepared by an arbitration court (judgements, decisions, notifications, etc.) shall be sent by mail or by electronic mail. Any documents (statements of claim, responses to a claim, etc.) prepared and submitted to the arbitration court by a party, if so specified in the rules of procedure of the arbitration court, shall be delivered to the other party by the arbitration court by mail or by electronic mail, or the other party shall be informed of their receipt by the arbitration court and the possibilities to acquaint itself with these.

(2) The documents referred to in Paragraph one of this Section shall be sent to a natural person by registered mail to the declared place of residence of the person, but in cases where an additional address is indicated in the declaration - to the additional address, unless the natural person has indicated another address to be used for correspondence with the arbitration court; to a legal person, documents shall be delivered to its legal address.

(3) The documents referred to in Paragraph one of this Section shall be delivered by electronic mail, provided that the party has notified the arbitration court that he or she agrees to use electronic mail for correspondence with the arbitration court. In this case, the arbitration court shall send the documents to the electronic mail address indicated by the party. If the court experiences technical obstacles with the delivery of documents by electronic mail, they shall be sent by registered mail.

(4) Notification of the first arbitration court hearing shall be sent to the parties as registered mail not later than 15 days in advance, unless the parties have agreed on a shorter time period. The time periods and the procedures, by which notifications of other arbitration court hearings are sent, shall be determined in accordance with the rules of procedure of the permanent arbitration court.

(5) The documents referred to in Paragraph one of this Section shall be considered received on the date of issue, provided that they are delivered and issued to the addressee personally. If they are sent by mail, they shall be considered as received on the seventh day after the postal consignment has been sent, but if they are sent by electronic mail, they shall be considered as received within two working days after sending.

Section 32. Representation of Parties

(1) Natural persons shall conduct their matters in an arbitration court themselves or through an authorised representative. Matters of legal persons shall be conducted in an arbitration court by their official acting within the scope of his or her authorisation provided for in the law, articles of association or statutes, or by an authorised representative of the legal person.

(2) Any natural person may act as an authorised representative, except for the persons who:

1) have not attained legal age;

2) are under trusteeship;

3) a person who, according to the judgment of a court, has been deprived of the right to conduct the matters of other persons;

4) are in a relationship of kinship up to the third degree, or in a relationship of affinity up to the second degree, with an arbitrator resolving the civil legal dispute;

5) have rendered legal assistance to the other party to the civil legal dispute in this matter or in another matter related thereto;

6) have participated in mediation in this matter or in another matter related thereto.

(3) Upon ascertaining that the circumstances referred to in Paragraph two of this Section exist, the arbitration panel shall not allow such persons to participate in the resolution of a civil legal dispute.

(4) A person who is or during the last five years has been on the list of arbitrators of the relevant permanent arbitration court may not represent a party, and he or she may not be invited to render legal assistance in proceedings of this permanent arbitration court.

(5) Parties may invite advocates to render legal assistance during arbitration court proceedings.

Chapter VII
Resolution of a Dispute by an Arbitration Court

Section 33. Securing a Claim before the Claim is Raised in Disputes which are Subject to Resolution by an Arbitration Court

(1) According to an application by a potential plaintiff, a district (city) court may, according to the location of the debtor or the location of the property of the debtor, secure a claim before it is raised in accordance with the procedures laid down in the Civil Procedure Law. The same district (city) court shall, according to a petition by a party or an arbitration panel, decide as to setting aside or varying the security for the claim.

(2) An application for the securing of a claim or an application for varying the security of a claim shall not be considered as failure to observe the arbitration agreement and shall not impede the resolution of a civil legal dispute by an arbitration court.

Section 34. Initiation of an Arbitration Proceedings

(1) Proceedings in the permanent arbitration court or the ad hoc arbitration institution, provided that the parties have agreed on the composition of the arbitration court in the arbitration agreement, shall commence upon submission of a statement of claim.

(2) Proceedings of the ad hoc arbitration which has been established for the resolution of a specific dispute, if the parties have not agreed on the composition of the arbitration court in the arbitration court agreement, shall begin from the time when the defendant receives a copy of an application for a claim and a notification of the appointment of an arbitrator.

(3) Proceedings in the permanent arbitration court, if the parties have not agreed on the composition of the arbitration court in the arbitration agreement, shall commence upon submission of a statement of claim.

Section 35. Submitting an Application for a Claim

(1) An application for a claim shall be submitted to an arbitration court in writing.

(2) An application for a claim shall include:

1) the given name, surname, personal identity number, declared place of residence, but if none, the place of residence, of a plaintiff; for a legal person - the name, registration number and registered office. The plaintiff may indicate his or her telephone number or electronic mail address, if he or she agrees to use telephone or electronic mail for correspondence with the arbitration court;

2) the given name, surname, personal identity number, declared place of residence and additional address indicated in the declaration, but if none, the place of residence of the defendant; for a legal person - the name, registration number and registered office. The personal identity number or registration number of the respondent shall be included, if such is known;

3) if the action is brought by a representative - the given name, surname, personal identity number and address for correspondence with the arbitration court of a plaintiff; for a legal person - the name, registration number and registered office;

4) in claims for the recovery of monetary amounts - the name of the credit institution and account number, to which payment is to be made, if any;

5) the claim subject, sum of the claim, the calculation of sum of the claim;

6) the grounds for the claim and evidence proving it;

7) claims raised by the plaintiff;

8) a list of attached documents;

9) other information, if such is necessary for the examination of the matter.

(3) An application for a claim shall be accompanied by:

1) an arbitration agreement, unless it is included in an agreement, in connection with which the dispute has arisen;

2) the agreement, in connection with which the dispute has arisen;

3) documents referred to by the plaintiff in the statement of claim.

(4) A statement of claim shall be submitted to the arbitration court, appending therewith as many true copies as there are participants in the matter.

Section 36. Notification of Initiation of Arbitration Proceedings

Immediately after initiation of arbitration proceedings, the arbitration court shall send to the defendant a notification of initiation of arbitration proceedings and a true copy of the statement of claim, explaining the right of the defendant to submit a written response to the claim.

Section 37. Response to a Claim

(1) The defendant shall submit a response to a claim within the time period specified by the parties or by the arbitration court. The time period for the submission of the response may not be less than 15 days, counting from the day of sending the statement of claim to the defendant.

(2) In the response to a claim, the defendant shall indicate:

1) whether he or she admits the claim fully or partially;

2) his or her objections to the claim;

3) the circumstances justifying his or her objections, and evidence, which certify his or her objections;

4) other circumstances, which he or she considers to be important in the examination of the civil legal dispute;

5) his or her telephone number or electronic mail address, if he or she agrees to use telephone or electronic mail for correspondence with the arbitration court.

(3) Failure to submit a response to a claim is not an impediment to the examination of a civil legal dispute.

(4) A response to a claim shall be submitted to the arbitration court, appending therewith as many true copies as there are participants in the matter.

Section 38. Counterclaim

(1) The parties may freely agree on the procedures for submitting a counterclaim, provided that the subject of the counterclaim is included in an arbitration agreement. If the parties have agreed to refer a civil legal dispute for resolution to the permanent arbitration court, but have not agreed on the procedures for submitting a counterclaim, these shall be determined by the rules of procedure of the permanent arbitration court. A counterclaim shall be submitted in accordance with general rules for submitting a statement of a claim.

(2) If a dispute is resolved by the ad hoc arbitration and the parties have not agreed on the procedures for submitting a counterclaim, the defendant is entitled to submit a counterclaim not later than within the time period specified for the submission of a response.

(3) A counterclaim shall be submitted to the arbitration court, appending therewith as many true copies as there are participants in the matter.

Section 39. Amendment and Supplementation of a Claim

(1) Unless otherwise agreed upon by the parties, a party has the right to amend or supplement a claim in writing until resolution of the subject-matter of the civil legal dispute has commenced.

(2) If the basis of a claim is amended or supplemented, the defendant has the right to submit a written response within the time period specified by the arbitration panel. The provisions of Section 37 of this Law are applicable to the submission of the response.

Section 40. Arbitration Court Hearings

(1) An arbitration panel, according to the arbitration agreement entered into by parties, shall resolve a civil legal dispute in the oral or written procedure.

(2) In the oral procedure, the arbitration panel shall hold hearings to hear explanations and objections of the parties and to examine evidence.

(3) In the written procedure, the arbitration panel shall resolve a dispute on the basis of documentary evidence and materials submitted only.

(4) The arbitration panel shall resolve a civil legal dispute in the oral procedure, if the parties have not agreed on the type of proceedings in the arbitration agreement, but where one of the parties, until the making of an award, requests oral proceedings.

(5) An arbitration panel shall acquaint the parties with submissions, documents and other information, which it has obtained, as well as with expert opinions and other evidence.

Section 41. Evidence and Evidentiary Means

(1) Evidence is information, on the basis of which an arbitration panel determines the existence or non-existence of such facts that are significant in the resolution of a civil legal dispute.

(2) Evidence shall be submitted by the parties. Each party shall prove the circumstances used by it to justify its claims and objections.

(3) Evidentiary means in an arbitration court may consist of explanations of the parties, documentary evidence (written documents, audio recordings, video recordings, electronic data carriers, digital video discs, etc.), real evidence, and expert opinions.

(4) Documents shall be submitted in the form of an original or in the form of a duly certified true copy, copy, or extract. If a party submits a true copy, copy or extract of a document, an arbitration panel may itself, or upon request of the other party, require that the original document be submitted. The arbitration panel shall return the original document to the person who submitted it, upon request of this person, adding a duly certified true copy, copy or extract of the document to the materials of the arbitration proceedings.

(5) An arbitration panel shall determine the admissibility and eligibility of evidence.

Section 42. Assessment of Evidence

(1) No evidence shall have any predetermined effect as would be binding upon the arbitration panel.

(2) An arbitration panel shall set out in the reasoned part of the judgement made by it as to why it has given preference to one body of evidence in comparison to another, and why it has found certain facts as proven, and others as not proven.

Section 43. Documentary Evidence Requests

(1) An arbitration panel is entitled to request, upon substantiated request from a party, that documentary evidence in the possession of the other party be submitted.

(2) The party requesting the arbitration panel to request documentary evidence shall describe such evidence and provide reasons for presuming that the evidence is in the possession of the other party.

(3) If a party refuses to submit the documentary evidence requested by the arbitration panel within the time period provided by it, without denying that the party possesses such evidence, the arbitration panel may admit as proven the facts, which the opposite party sought to prove by referring to such documentary evidence.

Section 44. Expert-examination

(1) Unless an arbitration agreement provides otherwise, the arbitration panel may, upon request of a party, order an expert-examination and assign its performance to one or several experts.

(2) The parties shall, upon request of the arbitration panel, submit the necessary information or documents, or present goods or other items, to the expert.

(3) Upon request of a party, the arbitration panel shall invite the expert to participate in a court hearing. Parties are entitled to ask questions to the expert about the expert opinion.

Section 45. Costs of an Arbitration Proceedings

(1) Costs of arbitration proceedings shall include the costs relating to examination of a civil legal dispute, and fees paid to arbitrators.

(2) The amount of costs of arbitration proceedings, as well as the term and procedures for payment thereof shall be determined by the arbitration court, taking into account the amount claimed, the complexity of the civil legal dispute, the provisions of the arbitration agreement, as well as other significant circumstances.

(3) Unless otherwise agreed upon by the parties in the arbitration agreement, payment for the performance of an expert-examination, participation of a secretary, interpreter or expert in arbitration proceedings, as well as other costs of arbitration proceedings shall be made in accordance with the procedures specified by the arbitration court, by the party who submitted the request for the participation of a secretary, interpreter or expert, as well as for the performance of an expert-examination during arbitration proceedings. If such request has been submitted by both parties, they shall pay the costs equally.

Section 46. Consequences of a Party not Participating in Arbitration Proceedings

If a party, without justified cause, fails to attend an arbitration court hearing or to submit documentary evidence, the arbitration panel shall continue arbitration proceedings and resolve the civil legal dispute on the basis of the evidence at its disposal.

Section 47. Procedural Consequences of Withdrawal of a Party

(1) The fact that a natural person who is a party dies or a legal person who is a party has ceased to exist, shall not in itself terminate an arbitration agreement, unless otherwise agreed upon between the parties and the disputed legal relations allow for the taking over of rights.

(2) The arbitration panel shall suspend arbitration proceedings until a successor in rights of the party is determined.

(3) Cession of a claim shall be the basis for termination of arbitration proceedings, unless the parties have agreed upon resolution of the civil legal dispute by an arbitration court anew.

Section 48. Right to Object

(1) A party has the right to submit objections, if any of the provisions of this Law, the rules of procedure of the permanent arbitration court, or the arbitration agreement has been breached or has not been conformed to. A party shall submit objections to the arbitration panel and to the other party in writing, as soon as such breach has come to their knowledge.

(2) If a party does not submit any objections, it shall be deemed that the party has waived the right to raise such objections, except for cases where the party has not raised such objections due to reasons beyond its control.

(3) The arbitration panel shall decide whether the objections are well founded.

Section 49. Minutes

(1) Minutes of an arbitration court hearing shall be taken only if any of the parties so requests.

(2) Minutes shall be taken by the secretary appointed by the arbitration court.

(3) Minutes shall be signed by all arbitrators and the secretary. The minutes shall be signed not later than within three days after the arbitration court hearing.

(4) The parties are entitled to acquaint themselves with the minutes and, within five days after signing thereof, submit written objections stating the faults found in the minutes. The validity of objections shall be decided upon by the arbitration panel.

Section 50. Archiving of Arbitration Proceedings Documents after Completion of an Arbitration Proceedings

(1) If a dispute is resolved by the permanent arbitration court, it shall store the arbitration court documents for 10 years after completion of the arbitration proceedings in accordance with the procedures laid down in the laws and regulations regarding storage of archival documents.

(2) If the permanent arbitration court ceases to exist, its founder shall hand over the documents of arbitration proceedings for storage to the State Archives of Latvia. The expenses of storage of arbitration proceedings documents shall be covered by the founder of the permanent arbitration court.

(3) If a dispute is resolved by the ad hoc arbitration, arbitration proceedings documents shall be drawn up in such number of copies as there are parties in the matter. After completion of arbitration proceedings, they shall be issued to each party.

Chapter VIII
Awards of an Arbitration Court

Section 51. Making of Awards by an Arbitration Court

(1) All awards of an arbitration court consisting of three or more arbitrators shall be made by a majority vote, except the case referred to in Section 26, Paragraph four of this Law.

(2) An award of an arbitration court shall come into effect on the day it is made. An award of an arbitration court may not be appealed.

Section 52. Decisions of an Arbitration Court

An arbitration panel may take a decision to postpone the resolution of a civil legal dispute and other procedural issues, without adjudicating the subject-matter of the civil legal dispute.

Section 53. Settlement

(1) Settlement shall be permitted in any civil legal dispute, except in the case referred to in Paragraph two of this Section.

(2) Settlement shall not be permitted, if the terms of the settlement infringe on the rights and interests protected by law of another person.

(3) If during an arbitration proceedings the parties enter into a settlement, the arbitration panel shall terminate the arbitration proceedings and, if so requested by the parties and agreed upon with the arbitration panel, draw up a settlement in the form of an arbitration court judgement setting out the provisions on which an agreement has been reached.

(4) Such arbitration court judgements shall have the same status and legal force as any other arbitration court judgements resolving the subject-matter of a civil legal dispute.

Section 54. Judgement of an Arbitration Court

(1) An arbitration panel shall issue a judgement within 14 days after the subject-matter of a civil legal dispute is reviewed.

(2) An arbitration panel shall issue a judgement in writing.

(3) If the arbitration panel consists of several arbitrators, the judgement shall be signed by all the arbitrators. If any of the arbitrators does not sign the judgement, the arbitration court judgement shall specify the reasons why their signature is missing.

(4) The judgement shall specify:

1) the composition of the arbitration court;

2) the date of rendering the judgement and the location where the arbitration proceedings took place;

3) information regarding the parties - the given name, surname, personal identity number, other personal identification information and declared place of residence, or other address which can be used for correspondence of a natural person, or the name, registration number, other personal identification information and registered office of a legal person;

4) the subject-matter of the dispute;

5) reasons for the judgement, unless otherwise agreed by the parties;

6) the conclusion regarding complete or partial satisfaction of the claim, or the complete or partial dismissal thereof, and the essence of the judgement;

7) the amount to be recovered, if the judgement is rendered regarding recovery of monetary amounts, indicating separately the principal debt and the interest, the time period for which the interest has been adjudged, the rights of the plaintiff regarding receipt of interest for the time period prior to the execution of the judgement, including also a reference to the extent thereof;

8) the specific property and the value thereof, which is to be recovered in the event that the property does not exist, if the judgement is rendered regarding recovery of property in specie;

9) what actions, by whom, and within what time period are to be fulfilled, if the judgement imposes a duty to fulfil certain actions;

10) what part of the judgement refers to each plaintiff, if the judgement is made for the benefit of more than one plaintiff, or what part of the judgement is to be fulfilled by each defendant, if the judgement is made against more than one defendant;

11) the expenses of arbitration proceedings and the distribution of such expenses among the parties;

12) the expenses of legal assistance in the matter of the parties, if any, and the distribution of such expenses among the parties;

13) other information, which the arbitration panel considers necessary.

(5) An arbitration court judgement shall be sent to the parties within three working days from the day of making thereof.

Section 55. Correction and Explanation of a Judgement and Making of a Supplementary Judgement

(1) An arbitration panel is entitled, on its own initiative or upon request of a party, to correct any clerical or mathematical calculation errors in a judgement. Such errors may be corrected without the participation of parties.

(2) Unless otherwise agreed upon by the parties, a party may, by informing the other party thereof, within 30 days after the date when a true copy of the judgement is sent or received, if delivered personally, request the arbitration panel to explain the judgement, without amending its contents. An explanation of a judgement shall become an integral part of the judgement from the moment of adoption thereof.

(3) Unless otherwise agreed upon by the parties, a party may, by informing the other party thereof, within 30 days after the date when a true copy of the judgement is sent or received, if delivered personally, request the arbitration panel to make a supplementary judgement, if any of the claims, for which evidence has been submitted, and for which the parties have provided explanations, has not been decided. If an arbitration panel finds the request substantiated, it shall make a supplementary judgement.

(4) The arbitration panel shall notify the parties of the arbitration court hearing, in which the issue regarding correction or explanation of the judgement, or making of a supplementary judgement is to be decided, not later than 15 days in advance. If the operative part of the judgement may change as a result of correcting the judgement, but the essence of the judgement remains unchanged, the arbitration panel shall invite the parties to express their opinions. The failure of parties to attend is not an impediment to the correction or explanation of the judgement or making of a supplementary judgement. An arbitration panel shall make a supplementary judgement in accordance with Section 54 of this Law.

Section 56. Procedures for Certifying Signatures of Arbitrators on an Award

In the permanent arbitration court, the procedures for certifying signatures of arbitrators on an award shall be determined by the rules of procedure of the permanent arbitration court, but in the ad hoc arbitration, prior to an award being issued, the signatures of arbitrators shall be certified by a notary.

Section 57. Completion of Arbitration Proceedings

(1) An arbitration panel shall take a decision to terminate arbitration proceedings if:

1) the plaintiff withdraws the claim;

2) the parties agree on a settlement;

3) the arbitration agreement has, in accordance with the procedures laid down in law or by the agreement, ceased to be in effect;

4) the arbitration panel finds that the arbitration court does not have jurisdiction over the civil legal dispute;

5) a natural person who is one of the parties dies, or a legal person who is one of the parties ceases to exist, and the disputed legal relationship does not allow for the taking over of rights, or the parties have agreed that in such case the arbitration proceedings are to be terminated.

(2) If arbitration proceedings are terminated for the reasons set out in Paragraph one, Clause 1 or 2 of this Section, a repeated bringing before an arbitration court or bringing before a district (city) court of a dispute between the same parties, over the same subject, and on the same basis shall not be permitted.

(3) If arbitration proceedings are terminated for the reasons set out in Paragraph one, Clause 3, 4 or 5 of this Section, a statement of claim may be brought before a district (city) court.

Section 58. Procedures for Enforcing an Arbitration Court Judgement

(1) A judgement of an arbitration court is mandatory for the parties and shall be complied with voluntarily within the time period stipulated in such judgement. The time period provided for the voluntary compliance with the judgement shall not be less than 10 days.

(2) If a judgement of an arbitration court is to be enforced in Latvia but is not being complied with voluntarily, the interested party is entitled, in accordance with the procedures laid down in the Civil Procedure Law, file an application with a district (city) court for the issue of a writ of execution for compulsory enforcement of the judgement of the permanent arbitration court.

(3) The permanent arbitration court, upon request of a district (city) court, shall provide the requested information necessary for taking the decision to issue a writ of execution for the compulsory enforcement of the judgement of the permanent arbitration court, or the decision to refuse to issue a writ of execution for the compulsory enforcement of the judgement of the permanent arbitration court.

Transitional Provisions

1. The founder of the permanent arbitration court registered in the Arbitration Court Register shall, by 1 June 2015, submit a certification to the Register of Enterprises confirming that the arbitration court has complied with the requirements of Section 2, Paragraph two, and Sections 4 and 7 of this Law, appending the documents referred to in Section 8, Paragraph three.

2. If the founder of the permanent arbitration court fails to submit the relevant certifications and documents within the term specified in Paragraph 1 of these Transitional Provisions, the Register of Enterprises shall, by 1 October 2015, decide on the exclusion of the permanent arbitration court from the Arbitration Court Register, in accordance with the procedures laid down in the Cabinet regulations regarding the Arbitration Court Register.

3. The permanent arbitration court, the founder of which has failed to submit the documents referred to in Paragraph 1 of these Transitional Provisions within the specified term, may complete the initiated arbitration proceedings, but not later than until the day when the Register of Enterprises has taken a decision to exclude the permanent arbitration court from the Arbitration Court Register.

4. The founder of the permanent arbitration court, which has been excluded from the Arbitration Court Register, shall hand over the documents of arbitration proceedings to the State Archives of Latvia by 1 November 2015 and cover the expenses for the storage thereof.

5. If parties have agreed to refer a civil legal dispute for resolution to the permanent arbitration court, which has been excluded from the Arbitration Court Register in accordance with Paragraph 2 of these Transitional Provisions, or which has ceased its operation, the parties shall agree on referring the civil legal dispute for resolution to another arbitration court. If no agreement is reached, the dispute shall be resolved in court in accordance with the Civil Procedure Law.

6. The Cabinet shall issue the regulations referred to in Section 6, Paragraph two of this Law by 1 June 2015. Until the date of coming into force thereof, Cabinet Regulation No. 205 of 29 March 2005, Regulations Regarding State Fee for Making an Entry in the Arbitration Court Register, and Cabinet Regulation No. 204 of 29 March 2005, Regulations Regarding the Arbitration Court Register, shall apply, insofar as they are not in contradiction with this Law.

7. The Register of Enterprises shall ensure the availability of the information referred to in Section 8, Paragraph seven of this Law on its website by 1 July 2015, by publishing the rules of procedure of all the permanent arbitration courts which are not excluded from the Arbitration Court Register by 1 July 2015.

8. The founder of the permanent arbitration court registered in the Arbitration Court Register shall, until 1 March 2017, submit to the Register of Enterprises the consent of the owner of the immovable property referred to in Section 4, Paragraph three of this Law, the text of the necessary amendments to the rules of procedure, as well as the new wording of the full text of the rules of procedure which comply with the requirements of Section 8, Paragraphs one and four of this Law, the list of arbitrators of the permanent arbitration court which complies with the requirements of Section 8, Paragraph 2.¹ of this Law, and a certification which complies with the requirements of Section 8, Paragraph six of this Law.

[6 October 2016]

9. If the founder of the permanent arbitration court fails to submit the abovementioned documents within the term specified in Paragraph 8 of these Transitional Provisions, the Register of Enterprises shall, by 1 June 2017, decide on the exclusion of the permanent arbitration court from the Arbitration Court Register.

[6 October 2016]

10. Amendments to Section 8, Paragraphs two, three and five of this Law, and also amendment regarding supplementing of the Section with Paragraph 5.¹ shall come into force on 1 March 2017.

[6 October 2016]

11. The founder of the permanent arbitration court registered in the Arbitration Court Register shall, until 1 June 2017, submit to the Register of Enterprises an application for making amendments in the Arbitration Court Register, ensuring the compliance of the arbitration court with Section 8, Paragraph two of this Law that will come into force on 1 March 2017.

[6 October 2016]

12. If the founder of the permanent arbitration court fails to submit the relevant documents within the term specified in Paragraph 11 of these Transitional Provisions, the Register of Enterprises shall, by 1 September 2017, decide on the exclusion of the permanent arbitration court from the Arbitration Court Register.

[6 October 2016]

This Law shall come into force on 1 January 2015.

This Law has been adopted by the Saeima on 11 September 2014.

Acting for the President - Chairperson of the Saeima S. Āboltiņa

Rīga, 1 October 2014

 

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¹ The Parliament of the Republic of Latvia

Translation © 2018 Valsts valodas centrs (State Language Centre)