During the period of a legislative tempest, when even key legislative acts are being significantly amended, you never know that the winds of change will bring you. This time, the Russian State Duma proposed a law introducing a set of new rules to the Russian Arbitration Procedural Code. 

On March 02, 2016, Vladimir Putin signed Federal Law No.47-FZ “On introducing amendments to the Arbitration Procedural Code of the Russian Federation” introducing, among other things, the following significant novelties to the commercial arbitration procedure: 

1.    Mandatory pre-trial procedure for examination of disputes arising out of civil law relations 

Previously the pre-trial procedure applied only in cases directly provided by an agreement or the law, but now in order to apply to a commercial arbitration court, according to the general rule, you first of all need to send a letter of claim/request to the other party and only after that, following an additional thirty calendar days, can you file a claim with a court, unless the parties foresaw another term and/or procedure. There is no clarity as to whether or not such agreement between the parties can exclude the pre-trial procedure, as this part does not rule out double interpretation. 

The rule on mandatory pre-trial procedure does not apply to certain types of cases concerning insolvency, corporate disputes, disputing decisions of arbitration courts and others.

 2.    Maximum amount for examining cases through simplified procedure is increased 

Previously these amounts were 300,000 rubles for legal entities and 100,000 rubles for individual entrepreneurs, but now they are 500,000 rubles and 250,000 rubles respectively. At the same time, claims on recovering compulsory payments will be examined through a simplified procedure within the amount from 100,000 to 200,000 rubles (previously it was no more than 100,000 rubles).

 3.    Provision of a motivated court decision will not be mandatory in some cases 

Under a simplified procedure (except for decisions on specific types of cases), the court will publish only the operative part of the decision. The reasoning of the decision will be prepared only upon request from a party participating in the case, filed within five days from the date the operative part of the decision is published on the court’s web site.

 4.    Institution of court order is introduced in the arbitration process 

A new Chapter of “Order proceedings” is introduced into the Russian Arbitration Procedural Code. Previously the institution of court order existed and was actively used in the civil law process, but there was no such concept in the Russian Arbitration Procedural Code.  In essence, this novelty establishes a “simplified procedure” in the commercial arbitration process in order to perform simplified examination of disputes and it is applied only in respect to the following claims: 

• Claims arising out of non-fulfillment of an agreement in relation to debt that is confirmed by the debtor, but is not paid, with total claims up to 400,000 rubles;
• Claims based on the protest of a promissory note performed by a public notary upon failure to pay, non-acceptance or no date on an acceptance, with total claims up to 400,000 rubles;
• Claims regarding collection of mandatory payments and sanctions with total claims up to 100,000 rubles. 

The court order is issued within ten days from the date of receiving a request on its issuance, without summoning the parties of the dispute and without holding a trial. As in the civil process, the debtor has ten days to dispute enforcement of the court order from the date of its receipt, and when such objections are received, the court order is subject to cancellation.

The Law will become effective 90 days after its official publication, that is, on June 01, 2016. 

Federal Law No.47-FZ “On introducing amendments to the Arbitration Procedural Code of the Russian Federation” dated March 02, 2016.

Igor Gorokhov    Principal Associate   St. Petersburg     igorokhov@cls.ru    Tel.: +7 (812) 346 7990

Daniil Petrukh   Associate   St. Petersburg      dpetrukh@cls.ru    Tel.: +7 (812) 346 7990

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Igor Gorokhov or Daniil Petrukh, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.