On March 02, 2016, the president of the Russian Federation Vladimir Putin signed Federal Law No.47-FZ “On introducing amendments to Arbitration Procedural Code of the Russian Federation.” From June 01, 2016, the law establishes a number of changes in the Russian Arbitration Procedural Code:

 1.    Mandatory pre-trial procedure

When applying to a court, previous rules required sending a claim to the other party (or to follow other form of pre-trial procedure) only in cases directly specified by law or an agreement between the parties. Starting from summer 2016, the situation changes drastically – now the procedure for pre-trial settlement of disputes is mandatory, except for a number of cases specified by law (in particular, pre-trial procedure is not required for corporate disputes).

2.  Court order

The institute of a court order is widely used in courts of general jurisdiction. Now this instrument will also be used in commercial arbitration.

The court order will be issued to state authorities (tax, customs and other authorities) recovering mandatory payments and sanctions from businesses in the amount up to 100,000 rubles, and to creditors initiating a monetary claim recognized by the debtor in the amount up to 400,000 rubles. The court order will also be the final step in examination of cases based on notarial protest of a promissory note upon failure to pay, non-acceptance or an undated acceptance, if total claims do not exceed 400,000 rubles.

The deadline for appealing a court order is ten days from the date it is received; therefore, the reply to an order received must be prompt. However, appeals filed in due time are guaranteed to cancel a court order, and claims will need to be submitted once again as part of the litigation process.

3.  Changes in simplified procedure

Due to the court order institute being established in commercial arbitration process, the minimum and maximum amounts of total claims which are examined within the simplified procedure, are increased:

• up to 500,000 rubles for legal entities (previously up to 300,000 rubles);
• up to 250,000 rubles for individual entrepreneurs (previously up to 100,000 rubles);
• from 100,000 to 200,000 rubles when recovering mandatory payments (previously up to 100,000 rubles).

The reasoning of the decision made under the simplified procedure will be prepared by the judge only upon a relevant request from a party of the proceedings. The deadline for filing such request is five days from when the operative part of the decision is published on the court’s web site. In the event there is no request, the reasoning will not be prepared and only the operative part will be available to the parties.

It is obvious that these amendments are aimed at decreasing workload for the courts, which in some cases can indeed exceed reasonable limits. In general, novelties should be assessed as positive since they, firstly, decrease the workload for small and undisputed cases that will allow judges to spend enough time on more important cases and, secondly, increase procedural responsibility and discretion of the participants of the procedure, confined within the strict limits of short timeframes for examining certain types of cases.

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

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

Daniil Petrukh   Associate   St. Petersburg      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.