Dispute resolution and arbitration

Courts

Azerbaijan has a three-tier court system - courts of first instance, appellate courts and a cassational court. Courts of first instance are the district (municipal) courts of general jurisdiction, local administrative-economic courts, and military courts. 

It should be emphasized that the Azerbaijani court system is undergoing a critical stage of transition and reform from Soviet type "just courts" to an independent and modern judiciary. Vital steps, such as the reappointment of judges and recent legal reforms are underpinning this process. It is safe to say that the Azerbaijani system is becoming more relevant and appropriate for an open market economy. 

Courts of general jurisdiction address disputes arising out of civil, family, or land-related matters, use of natural resources, environmental protection, tax, administrative and other matters, where at least one of the parties to a dispute is a physical person without the status of a sole proprietor, or, if he has such status, the dispute which arose is unrelated to the carrying out of his entrepreneurial activity.

The administrative-economic courts consider cases in respect of economic disputes arising from civil, administrative and other legal relations between legal entities and physical persons with the status of sole proprietors. Pursuant to a Decree of the President, the Economic Court of Appeals was liquidated and the regional appellate courts were established in the cities of Baku, Ganja, Sheki, Sumqayit and Shirvan.

The decisions of the appellate courts can be further appealed to the court of cassation. The civil board of the Supreme Court considers appeals filed in respect of the decisions of the boards for civil cases of appellate courts. The administrative-economic board of the Supreme Court reviews the decisions of the boards for administrative and economic cases of appellate courts. The cassational court is located in Baku. 

Mandatory enforcement

Enforcement procedures set forth in the Law “On the Execution of Court Orders” apply to judgments of Azerbaijani and foreign courts, as well as to international arbitration and foreign arbitration awards.

The following documents have the status of execution orders: 

* court orders (e.g. judgments of Azerbaijani courts, interim orders, awards of international arbitration courts and tribunals, decisions of courts of foreign states and arbitration courts);

* notarized agreements concerning the recovery of alimony and collateral in a mortgage agreement;

* execution notes of notaries;

* decisions of state bodies (officials) authorized to consider cases relating to administrative offenses;

* mortgage lists issued under the agreements for the mortgage of immovable property;

* decisions of other state bodies when provided by law.

* protests against the failure to pay under a promissory note;

* administrative acts issued by municipalities and administrative acts for payment of money issued by other administrative bodies;

* short-term protection orders of state bodies (officials) authorized to consider cases relating to domestic violence. 

The documents should be submitted to a bailiff for execution within the following periods: 

* writs issued in accordance with courts decisions and courts orders – one month;

* writs issued in accordance with resolutions of courts on provisional relief – immediately;

* execution notes of notaries and decisions of bodies (officials) authorized to consider cases on administrative offences-ten days;

* writs issued in accordance with decisions of international arbitration court and arbitration tribunals and decisions of courts of foreign states and arbitration courts - three years;

* short-term protection orders - immediately.

Failure to voluntarily execute the appropriate decisions triggers enforcement. The following are enforcement measures: 

* foreclosure and subsequent sale of assets;

* garnishment of salaries and similar payments;

* foreclosure on the debtor's assets in the possession of third parties;

* seizure of the debtor's assets with subsequent transfer to the claimant.