Region
Eastern Europe & Central Asia
Income group
Lower middle income
Most populous city
Baku

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Arbitrating Commercial Disputes Details
This index compares the strength of countries’ arbitration regimes by examining the laws and regulations governing domestic and international arbitrations, as well as the countries’ adherence to specific international conventions.
QuestionAnswer
* Does your national law recognize arbitration as a means of dispute resolution between private parties in commercial transactions? Yes
* Has your country enacted a specific statute on commercial arbitration? Yes
Please list the relevant laws and the years of their adoption Law No. 757-IQ of the Republic of Azerbaijan "On International Arbitration," dated November 18, 1999.
* Please indicate the Web site(s) where the statute(s) can be consulted http://arbitr.az/eng/viewpage.php?page_id=27 (in English)
www.e-qanun.az
(in local language)
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Is the statute based on UNCITRAL? Yes
Comment The national arbitration statute is based on the language of the UNCITRAL Model Law on International Commercial Arbitration in the original 1985 version. Accordingly, it does not incorporate the ame ...morendments adopted in 2006 to Articles 1(2) (exceptions); Article 2A (uniformity in application); Article 7 (form of arbitration agreement); Article 35(2) (translation of an award) and the new Chapter IVA on interim measures.
The only difference between the national arbitration statute and the original UNCITRAL 1985 Model Law is the reference to the Constitution of the Republic of Azerbaijan instead of the public policy in Articles 34 and 36.
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Are there other codes, statutes or legislative provisions governing commercial arbitration in your country? Yes
Please list the relevant laws and the years of their adoption Law No. 57 of the Republic of Azerbaijan "On Protection of Foreign Investment," dated January 15, 1992; and
Civil Procedure Code of the Republic of Azerbaijan, effective September 1, 2000.
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List web sites http://www.e-qanun.az/viewdoc.aspx?id=9&type=2&state=2&df=0
Definition of domestic arbitration The Azerbaijani law does not provide a definition of domestic arbitration, nor does it regulate it. The Civil Procedure Code provides that domestic arbitration will be regulated by law, but no such ...morelaw has ever been adopted. ...less
Definition of international arbitration Under Article 3 of the International Arbitration Law, arbitration is considered international if:
- the parties to an arbitration agreement have, at the time of the conclusion of that agreement ...more, their places of business in different States; or
- one of the following places is situated outside the State in which the parties have their places of business:
(a) the place of arbitration if determined in, or pursuant to, the arbitration agreement;
(b) any place, where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or
- the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.
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* Are the following types of disputes arbitrable under your country’s national law: (a) Disputes involving rights over immoveable property located within your country: No
* (b) Any intra-company disputes( e.g., disputes over decisions made by the executive bodies of a corporation): No
* (c) Disputes involving shareholder arrangements: No
* (d) Disputes involving patents/trade marks (excluding administrative actions): No
(e) Securities transactions: Yes
List any additional commercial matters not listed above which are not arbitrable under your national law: Disputes involving claims against carriers in shipping agreements.
* Under your national law, is an arbitration agreement severable from the main contract? Yes
* Can an arbitration agreement be incorporated by reference? Yes
* Can the following method of concluding an agreement constitute a binding arbitration agreement: (a) by electronic communication, including email No
* Can the following method of concluding an agreement constitute a binding arbitration agreement: (b) by fax Yes
* Can the following method of concluding an agreement constitute a binding arbitration agreement: by oral agreement No
* Can the following method of concluding an agreement constitute a binding arbitration agreement: by conduct e.g., performance on the part of one party No
* Has your country ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards? Yes
* Under national law, are the state and state entities allowed to enter into arbitration with foreign owned companies in connection with the following: (a) Concession agreements Yes
* Under national law, are the state and state entities allowed to enter into arbitration with foreign owned companies in connection with the following: (b) Infrastructure contracts (e.g, construction contracts) Yes
* Under national law, are the state and state entities allowed to enter into arbitration with foreign owned companies in connection with the following: (c) Contracts dealing with natural resources (e.g., contracts dealing with water rights, mining, oil and gas, etc.) Yes
* Under national law, are the state and state entities allowed to enter into arbitration with foreign owned companies in connection with the following: (d) Other types of contracts/transactions (please list all that apply in the “Comments” column) Yes
Comment However, foreign arbitration clauses are discouraged.
* Has your country ratified the ICSID Convention? Yes
** Has your country adopted a specific statute on commercial mediation or conciliation of commercial disputes? No
Comment N/A
Additional comment Law of the Republic of Azerbaijan “On International Arbitration” complies with the modern international arbitration standards. Azerbaijan is also a party to many international conventions and treati ...morees related to arbitration. All of this indicates that the established legal base in Azerbaijan has created all conditions necessary for using arbitration as method of alternative dispute resolution.

However, the following issues require further improvement:
1. The lack of procedures on enforcement of domestic or international arbitral awards often make arbitrations in the country ineffective.
2. There is no clarification of what constitutes a binding arbitration agreement contained in the Law on International Arbitration; therefore, the above answers are based on the respondents’ interpretation of the Law.
3. Azerbaijan needs to adopt rules on domestic arbitration, as without developing domestic arbitration it would be difficult to promote international arbitration.
4. The status of the International Commercial Arbitration Court of Azerbaijan is not clear.
5. Under the law, the Supreme Court of the Republic of Azerbaijan is the only body that rules on the recognition and enforcement of arbitration awards and its decisions are final. Based on the information provided by the Supreme Court, the Civil Procedure Code does not provide for a possibility to appeal a Supreme Court judgment to the Plenum of the Supreme Court. Such judgment could be brought before the Constitutional Court, which pursuant to Article 130 of the Constitution of the Republic of Azerbaijan (Clauses III.4 and V) has jurisdiction to consider the compliance of the Supreme Court judgments with the Azerbaijani Constitution and laws. However, the latter is not an appeal, but rather an announcement on constitutionality of that Supreme Court judgment. So, the review by the Constituional Court of the Supreme Court decisions can make the procedure of enforcement longer.
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* Scored ** Bonus Question
This index compares rules for the arbitration process determining how easy it is for parties to design arbitration proceedings in their chosen manner and conduct fair and predictable arbitrations.
QuestionAnswer
* In a domestic arbitration taking place in your country, may the parties freely choose arbitrators to resolve their dispute without regard to: (a) the arbitrator(s)’ nationality: No
* In a domestic arbitration taking place in your country, may the parties freely choose arbitrators to resolve their dispute without regard to: (b) the arbitrator(s)’ gender: No
* In a domestic arbitration taking place in your country, may the parties freely choose arbitrators to resolve their dispute without regard to: (c) the arbitrator(s)’ professional qualifications: No
* May parties choose to conduct the arbitration proceedings in a foreign language in domestic arbitration? No
Comment N/A
* In an international arbitration taking place in your country, may the parties freely choose arbitrators to resolve their dispute without regard to: (a) the arbitrator(s)’ nationality: Yes
* In an international arbitration taking place in your country, may the parties freely choose arbitrators to resolve their dispute without regard to: (b) the arbitrator(s)’ gender: Yes
* In an international arbitration taking place in your country, may the parties freely choose arbitrators to resolve their dispute without regard to: (c) the arbitrator(s)’ professional qualifications: Yes
* May parties choose to conduct the arbitration proceedings in a foreign language in an international arbitration? Yes
Comment No
* May the parties freely choose the method of appointing arbitrators to resolve their dispute e.g., by subscribing to arbitration institutional rules in a domestic arbitration? No
Comment N/A
* May the parties freely choose the method of appointing arbitrators to resolve their dispute e.g., by subscribing to arbitration institutional rules in an international arbitration? Yes
Comment N/A
* May the parties freely choose the number of arbitrators to resolve their dispute in a domestic arbitration? No
Comment N/A
* May the parties freely choose the number of arbitrators to resolve their dispute in an international arbitration? Yes
Comment N/A
* Does your national law expressly provide that all arbitrators in arbitrations must be independent and impartial in a domestic arbitration? No
Does your national law expressly provide that all arbitrators in arbitrations must be independent and impartial in an international arbitration? N/A
* Does your national law expressly provide that all arbitrators in arbitrations must be independent and impartial in an international arbitration? Yes
Comment Article 12 of the Law on International Arbitration determines the procedure for challenging arbitrators. Pursuant to this article, if a party finds an arbitrator partial and not independent, it can o ...morebject to the appointment of such arbitrator. ...less
* May each party, if it chooses to do so, retain a foreign lawyer, not licensed to practice in your country, to represent it in an arbitration proceeding in a domestic arbitration No
Comment N/A
* May each party, if it chooses to do so, retain a foreign lawyer, not licensed to practice in your country, to represent it in an arbitration proceeding in an international arbitration Yes
Comment N/A
* Under your national law, are arbitrators expressly bound to preserve confidentiality of arbitration proceedings in a domestic arbitration? No
* Under your national law, are arbitrators expressly bound to preserve confidentiality of arbitration proceedings in an international arbitration? No
* Is online arbitration (or what is sometimes known as electronic Alternative Dispute Resolution) an available method of dispute resolution in your country for domestic arbitrations? No
* Is online arbitration (or what is sometimes known as electronic Alternative Dispute Resolution) an available method of dispute resolution in your country for international arbitrations? No
Comment N/A
* Are parties to an arbitration free to choose any arbitration institution, even one that is outside of your country, to administer their arbitration in a domestic arbitration No
* Are parties to an arbitration free to choose any arbitration institution, even one that is outside of your country, to administer their arbitration in an international arbitration Yes
Comment The Azerbaijan law does not yet regulate domestic arbitration.
* Are there any arbitration institutions administering commercial arbitrations in your country? Yes
List the arbitration institutions International Commercial Arbitration Court of Azerbaijan and National Arbitration Court at the Azerbaijan Arbitration and Mediation Center
* List the arbitration institution's Web sites www.arbitr.az
* How long, typically, would you estimate the period to be from the filing of the request for arbitration to the constitution of the arbitration tribunal in a domestic arbitration? Answers: 1=Under 30 days; 2=30-180 days; 3=181 days-1 year; 4=over 1 year 2
* How long, typically, would you estimate the period to be from the filing of the request for arbitration to the constitution of the arbitration tribunal in an international arbitration? Answers: 1=Under 30 days; 2=30-180 days; 3=181 days-1 year; 4=over 1 year 2
* How long, typically, would you estimate the period to be from the first hearing of the arbitration tribunal on the merits to the rendering of the arbitration award In a domestic/ international arbitration in your country? Answers: 1=Under 30 days; 2=30-180 days; 3=181 days-1 year; 4=over 1 year 2
* How long, typically, would you estimate the period to be from the first hearing of the arbitration tribunal on the merits to the rendering of the arbitration award In a domestic/ international arbitration in your country? Answers:1=Under 30 days; 2=30-180 days; 3=181 days-1 year; 4=over 1 year 3
Estimate the number of domestic commercial arbitrations carried out in your country's most commonly used arbitration institution within the past 12 months Answers: 1=0-5 cases; 2=6-20 cases; 3=21-100 cases; 4=101-1000 cases; 5=over 1000 cases; 6=N/A 1
Estimate the number of international commercial arbitrations carried out in your country's most commonly used arbitration institution within the past 12 months Answers: 1=0-5 cases; 2=6-20 cases; 3=21-100 cases; 4=101-1000 cases; 5=over 1000 cases; 6=N/A 1
Comment Out of five arbitration proceedings, only two ended in a final arbitration award.
* In an arbitration between a foreign owned company and your state or a state entity, can the parties freely choose the seat of arbitration (i.e., seat outside of your country)? Yes
* In an arbitration between a foreign owned company and the state/state entity, can the parties freely choose institutional arbitration or ad hoc arbitration? Yes
* In an arbitration between a foreign owned company and the state/state entity, can the parties freely choose the nationality of the arbitrators? Yes
* In an arbitration between a foreign owned company and the state/state entity, can the parties freely choose foreign counsel? Yes
* In an arbitration between a foreign owned company and the state/state entity, can the parties freely choose the applicable procedural rules? Yes
Are there any other restrictions with respect to party's autonomy in commercial arbitration if one of the parties is the state or a state entity? No
Comment Foreign arbitration is dicouraged.
** How often does the state (or state entities) include arbitration clauses in their contracts with foreign companies? Answers: 1=Rarely; 2=Occasionally; 3=Usually; 4=Always or nearly always 3
* Is there a public authority designated to handle administrative, logistical and other issues related to investors’ disputes with the state or a state entity (e.g., specific agency, office of the Prime Minister, etc.)? No
Comment N/A
** How frequently do private parties in your country agree to attempt to settle their commercial disputes through mediation or conciliation? Answers: 1=Rarely; 2=Frequently; 3=Usually; 4=Always or nearly always 1
* Is there an institution (or institutions) in your country that administers the mediation or conciliation of commercial disputes? No
Comment Azerbaijan Arbitration and Mediation Center
Have any of the courts in your country adopted mandatory procedures for mediating commercial disputes (e.g., for screening cases and referring to mediation those that appear susceptible of settlement by mediation, or by establishing “multi-door court houses” that enable parties to choose between litigation and mediation of their disputes)? Yes
Comment The Local Economic Court No.1 of Baku has started referring cases to mediation.
Additional Comment There is no tradition of obeying procedure and rules of evidence.
* Scored ** Bonus Question
This index compares the extent of judicial assistance before, during, and after the arbitration proceedings.
QuestionAnswer
* Have the courts in your country stated a “pro-arbitration policy”, i.e., a general policy in favor of enforcing arbitration agreements and arbitration awards, in applying your national law of arbitration In domestic/international arbitrations taking place in your country? No
Comment N/A
* If the parties have expressly agreed (i.e., in writing) that the arbitration tribunal can rule on its own jurisdiction, will that be upheld by your national courts? Yes
Comment N/A
* If a party brings an action in a court of your country with respect to a dispute that the parties have previously agreed (in a valid arbitration agreement or other writing) must be arbitrated (either in your country or elsewhere) how frequently would the courts in your country decline to hear the case and refer the parties to arbitration In domestic/international arbitrations taking place in your country? Answers: 1=Rarely; 2=Usually; 3=In all or nearly all cases 1
* If a party brings an action in a court of your country with respect to a dispute that the parties have previously agreed (in a valid arbitration agreement or other writing) must be arbitrated (either in your country or elsewhere) how frequently would the courts in your country decline to hear the case and refer the parties to arbitration in international arbitrations taking place in your country? Answers: 1=Rarely; 2=Usually; 3=In all or nearly all cases 2
Comment N/A
* Does your national law provide for domestic courts to assist the arbitration process by ordering the production of documents or the appearance of witnesses In domestic arbitrations taking place in your country? No
* Does your national law provide for domestic courts to assist the arbitration process by ordering the production of documents or the appearance of witnesses In international arbitrations taking place in your country? Yes
* Are requests for court assistance by ordering the production of documents or the appearance of witnesses generally granted In domestic arbitrations? No
* Are requests for court assistance by ordering the production of documents or the appearance of witnesses generally granted in international arbitrations? Yes
Comment An arbitration tribunal or a party may request the Supreme Court for assistance with obtaining the evidence. The tribunal may satisfy such request pursuant to the procedure for obtaining the evidence ...more in Article 27 of the Law on International Arbitration. ...less
* Does your national law provide for your courts to assist the arbitrators or parties by granting interim relief to prevent immediate and irreparable injury (e.g., preliminary injunctions, the sequestration of property) while the arbitration is pending or before the arbitration has commenced In domestic arbitrations taking place in your country? No
* Does your national law provide for your courts to assist the arbitrators or parties by granting interim relief to prevent immediate and irreparable injury (e.g., preliminary injunctions, the sequestration of property) while the arbitration is pending or before the arbitration has commenced In international arbitrations taking place in your country? Yes
* If an immediate need can be shown, how often do courts grant interim relief requests for assistance? Answers: 1=Rarely; 2=Usually; 3=In all or nearly all cases 2
List the law and article which provide for courts' assistance with interim relief. Article 17 of the Law on International Arbitration provides that, subject to agreement between the parties, a national court may, upon the request of any party, issue an order granting interim relief ...more, should the court consider such measures necessary. The ...less
Comment The courts rarely grant interim relief even in matters, which are not arbitrated.
Given the amount of the arbitration award ($US100, 000) and the location of the assets (your country's largest business city), what court in your country has jurisdiction to enforce an arbitration award rendered in your country (in domestic or international proceedings)? Supreme Court of the Republic of Azerbaijan is appropriate only for international arbitration awards made in Azerbaijan. There is no law on domestic awards.
** Is the court for enforcement of arbitration awards rendered in your country, a higher level court or a specialized court? Yes
* May a judgment of that court enforcing the award be appealed to a higher court or courts? No
May a judgment of that court denying enforcement of the award be appealed to a higher court or courts? No
If Yes, indicate the name of the court(s) of appeal Under the law, the Supreme Court of the Republic of Azerbaijan is the only body that rules on the recognition and enforcement of arbitration awards and its decisions are final. Based on the informat ...moreion provided by the Supreme Court, the Civil Procedure C ...less
* In the case of a domestic award, if a party brings an action in court to set aside (vacate or annul) a domestic arbitration award against it, is the court authorized to review that award on the merits? No
* In the case of an international award, if a party brings an action in court to set aside (vacate or annul) a domestic arbitration award against it, is the court authorized to review that award on the merits? No
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Invalidity of the underlying arbitration agreement or lack of capacity of a party? Yes
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Lack of a fair hearing? Yes
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Award deals with matters outside the scope of the arbitraton agreement? Yes
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Arbitration procedures not in accordance with the parties' s agreement or the governing arbitration law? Yes
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Subject matter of the dispute not subject to arbitration? Yes
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Enforcement of the award would be contrary to country's public policy? Yes
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Error of law? No
Under your national law, can a domestic award rendered in favor of a local company be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country on the following grounds: Award not supported by substantial evidence? No
Under your national law, list any additional grounds under which the domestic award rendered in favor of GlobiCo may be denied confirmation or enforcement, or be set aside, annulled or vacated, by a court in your country. The other grounds include:
(1) the award is not final between the parties; or
(2) the award is annulled or suspended by the court.
* What is the likelihood that your courts would enforce a domestic arbitration award if no objection to enforcement were filed? Answers: 1=Rarely; 2=Usually; 3=In all or nearly all cases 1
* What is the likelihood that your courts would enforce an international arbitration award if no objection to enforcement were filed? Answers: 1=Rarely; 2=Usually; 3=In all or nearly all cases 2
* Number of days on average necessary to enforce a domestic and international arbitration award in your country: (a) From the filing of an application for enforcement to the date of a hearing for such an application in the first instance court ? 30
* Number of days on average necessary to enforce a domestic and international arbitration award in your country: (b) From the date of the first hearing to the first instance court decision, if no objection to enforcement has been filed? 90
Number of days on average necessary to enforce a domestic and international arbitration award in your country: (c) From the first instance court decision to the decision of the final court of appeal (assuming that all avenues of appeal were pursued). In the second column, please list all relevant courts of appeal? 0
* Number of days on average necessary to enforce a domestic and international arbitration award in your country: (d) From the final court decision granting enforcement to GlobiCo obtaining a writ of execution attaching Supplier’s assets (e.g. bank account)? 240
Comment N/A
Given the amount of the foreign arbitration award ($US100, 000) and the location of the assets (your countrys' largest business city), what court in your country has jurisdiction to enforce a foreign arbitration award (i.e. an award rendered outside of your country)? Supreme Court of the Republic of Azerbaijan
** Is the court for enforcement of arbitration awards rendered outside your country, a higher level court or a specialized court? Yes
* May a judgment of that court enforcing the award or denying enforcement be appealed to a higher court or courts? No
If Yes, indicate the name of the court(s) of appeal N/A
Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground of "invalidity of the underlying arbitration agreement or lack of capacity of a party"? Yes
Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground of lack of a fair hearing? Yes
Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground of that the award deals with matters outside the scope of the arbitraton agreement? Yes
Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground that the arbitration procedures not in accordance with the parties' s agreement or the governing arbitration law? Yes
Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground that the award was set aside in the country where it was made? Yes
Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground that the subject matter of the dispute not subject to arbitration? Yes
Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground of public policy? Yes
* Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground of "error of law"? No
* Under your national law may an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts on the ground of that the award not supported by substantial evidence? No
* Under your national law, list additional grounds under which an arbitration award rendered in another country be denied recognition or enforcement by your country’s courts On ground 32(2) (lack of a fair hearing):
It may be denied under Article 476.0.1.2 of the Civil Procedure Code.

On ground 32(4) (arbitration procedures not in accordance with the part ...moreies' agreement or the governing arbitration law):
It may be denied under Article 476.0.1.4 of the Civil Procedure Code.

On ground 32(10) (other grounds):
It may be denied if an Azerbaijani court decision exists, which involves the same matter between the same parties or there is a case pending in an Azerbaijani court involving the same matter between the same parties.
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* What is the likelihood that your courts would enforce a foreign award if no objection to enforcement were filed? Answers: 1=Rarely; 2=Usually; 3=In all or nearly all cases 3
* Number of days on average necessary to enforce a foreign arbitration award in your country: (a) From the filing of an application for enforcement to the date of a hearing for such an application in the first instance court ? 60
* Number of days on average necessary to enforce a foreign arbitration award in your country: (b) From the date of the first hearing to the first instance court decision, if no objection to enforcement has been filed? 15
Number of days on average necessary to enforce a foreign arbitration award in your country: (c) From the first instance court decision to the decision of the final court of appeal (assuming that all avenues of appeal were pursued). In the second column, please list all relevant courts of appeal? 0
* Number of days on average necessary to enforce a foreign arbitration award in your country: (d) From the final court decision granting enforcement to GlobiCo obtaining a writ of execution attaching Supplier’s assets (e.g. bank account)? 240
Comment N/A
* In arbitrations involving a state or state entity, can your court(s) review the arbitration award on its merits in connection with recognition and enforcement proceedings? No
Additional Comment Although the Azerbaijani law provides for enforcement of international arbitration awards, in practice, it is very rare.

Based on the information provided by the Supreme Court of Azerbai ...morejan, the Civil Procedure Code does not provide for a possibility to appeal a Supreme Court judgment to the Plenum of the Supreme Court. Such judgment could be brought before the Constitutional Court, which pursuant to Article 130 of the Constitution of the Republic of Azerbaijan (Clauses III.4 and V) has jurisdiction to consider the compliance of the Supreme Court judgments with the Azerbaijani Constitution and laws. However, the latter is not an appeal but rather an announcement on constitutionality of that Supreme Court judgment.
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* Scored ** Bonus Question