The Russian Federation is a civil law jurisdiction. Justice is administered based on the following principles (Articles 5 and 7 to 11 of the Arbitrazh (Commercial) Procedure Code (hereinafter, the Russian APC)):
Additionally, the parties may submit both written and oral evidence to the court. For some types of case, parties are not heard, and the court confines its examination to written evidence (for small claims).
Russia’s state court system is represented by two senior courts. The first is the Constitutional Court of the Russian Federation. The Constitutional Court has no instances. Its judgments are final and not subject to appeal. That court can adjudicate over matters of:
The second senior court is the Supreme Court of the Russian Federation (hereinafter, the Russian SC). The Russian SC is the highest court for arbitrazh (commercial) courts and courts of general jurisdiction. Arbitrazh (commercial) courts resolve commercial disputes between economic entities, and primarily between legal entities and individual entrepreneurs. Courts of general jurisdiction deal with criminal, administrative and civil cases involving individuals.
The legal procedure in the courts of general jurisdiction is based on the rules of the Civil Procedure Code (hereinafter, the Russian CPC), the Criminal Procedure Code (hereinafter, the Russian CrPC), and the Administrative Procedure Code (hereinafter, the Russian AdPC) depending on the nature of the dispute; and in arbitrazh (commercial) courts, based on the Arbitrazh (Commercial) Procedure Code (hereinafter, the Russian APC).
Furthermore, the arbitrazh (commercial) court system includes a specialised intellectual property court that examines disputes related to the protection of intellectual property rights.
Russia also has a separate system of military courts exercising judicial authority over the Armed Forces of the Russian Federation.
Judicial acts in the Russian Federation may be revised in appellate and cassation procedures, as well as in a supervisory procedure (for more details on the court system see 10.1 Levels of Appeal or Review to a Litigation).
In arbitrazh (commercial) courts, procedural submissions of the parties are not generally publicly available. At the same time, in the past, there existed software that allowed anyone granted a relevant power of attorney from a specific party to a case to have access to practically all electronic files the parties had submitted in the case in question. That possibility was abolished in around 2016-2017. Some companies, however, still retain access to case files via that software.
At the same time, all judicial acts issued by arbitrazh (commercial) courts are publicly available free of charge at https://kad.arbitr.ru/. No identification is required to review them.
For courts of general jurisdiction, all judicial acts are also published and accessible free of charge at https://bsr.sudrf.ru/bigs/portal.html. But, unlike the arbitrazh (commercial) court system, judicial acts for this system are not always duly published. Moreover, they often contain deletions of the personal data of individuals made in order to rule out violations of their privacy.
Hearings, both in arbitrazh (commercial) courts and courts of general jurisdiction, are public, that is, open. This means that persons who are not involved in the case may freely attend a hearing. Closed hearings are allowed at the court’s initiative, where an open hearing may result in the disclosure of state secrets or violate the confidentiality of adoption of a child. A participant in a case may file a motion to hold closed hearings in order to keep trade, official and other secrets protected by the law confidential. Third parties that are not participants in the case cannot attend closed court sessions; such sessions are held without audio recording, and the resulting judicial acts are not published.
One can observe a trend towards the emergence of a professional legal assistance market in Russia. Where previously the parties in the overwhelming majority of cases could be represented by persons without a legal education, at present, a considerable category of cases is subject to requirements on qualifications, and a party may be represented only by an advocate or a person with higher legal education or a degree in law.
In criminal cases, in general, the accused may only be defended by advocates – that is, persons who have successfully passed a bar exam and obtained their advocate status. That said, Federal Law No 63-FZ dated 31 May 2002 On the Practice of Law and the Legal Profession in the Russian Federation does not prohibit defence in a criminal case by a foreign national. Such a foreign national, however, must hold the status of an advocate.
As a result of a recent reform, starting from 1 October 2019, parties to litigation in arbitrazh (commercial) courts may be represented only by advocates and persons with a higher legal education or a degree in law.
Only an advocate, or a person holding a degree no lower than that of a candidate of legal sciences (first step of a PhD in Law), may speak in the Constitutional Court.
In the courts of general jurisdiction, there are no professional requirements required of the representatives of the parties. An exception is made in a number of administrative cases, where a party may only be represented by an advocate or a person with a higher legal education or a degree in law.
Litigation funding is not prohibited in Russia. There are no special laws in this sphere, and, consequently, there are no restrictions for litigation funding in specific cases. But if litigation funding takes the form of assignment (cession) of claim, such arrangements fall under a prohibition of assignment of rights where the personality of the creditor is material for the debtor, pursuant to Article 388(2) of the Russian Civil Code (hereinafter, the Russian CC). Under Article 383 of the Russian CC, such claims include, in particular, claims for the payment of child support and claims for the compensation of personal injury.
At the same time, the parties are not prevented from structuring their relations in a different manner; for instance, they can enter into an agreement on co-operation. It seems that the above prohibition would not apply in that case, since there would be no assignment as such.
Since this sphere of legal relations is not governed at the legislative level, the parties are free to resort to funding for all, or the majority, of categories of cases. There is no doubt that such cases can include challenges to the acts of public authorities.
Litigation funding is available to all parties in a litigation, that is, both to a plaintiff and a defendant. There are no exemptions or benefits for either party. At the same time, the interest for funders in funding a litigation on the defendant’s side is clearly relatively rare; it tends to arise where the defendant may file a counterclaim against the plaintiff for a large sum or may otherwise motivate an investor.
The amount of third-party litigation funding in Russia is not limited. But judging by the existing market offers for litigation funding, the threshold for the value of a claim that triggers an interest of a litigation funder is around RUB10 million.
When a litigation is funded by a third party, funds are allocated, first and foremost, to cover the following expenses:
The contingency fee’s fate in Russia is currently the subject of debate. On the one hand, the now liquidated Supreme Arbitrazh (Commercial) Court of the Russian Federation forbade this form of fee structure in its judgments, reasoning that the use of the contingency fee as a form of remuneration paid to representatives might increase corruption in courts. Later, the same Court allowed for the possibility of using the contingency fee. Moreover, the contingency fee could even be recovered from the unsuccessful litigant, within reason.
At present, in the vast majority of legal cases contingency fees are allowed and recognised as legal by courts.
Moreover, the possibility of using contingency fees as a form of remuneration in property disputes is expressly envisaged in Article 16(3) of the Code of Professional Ethics of Lawyers (adopted by the First National Congress of Russian Lawyers on 31 January 2003).
There are no time limits for raising litigation funding. At the same time, the temporal aspect of raising such funding may be preordained by the very nature of such costs. Thus, for instance, since the state duty is generally payable prior to the filing of the claim, funding for this item of the costs will have to be raised before the claim is filed. The same rule stands for the legal fees. If the legal fees must be paid in advance, the relevant party will evidently need to seek funding for those fees at the earliest stages of litigation, or preparation for the same, where funding is raised by the plaintiff rather than the defendant.
In arbitrazh (commercial) courts, the parties must complete a pre-trial complaint procedure. As a general rule, the potential defendant must respond to the complaint within 30 days of the date on which it was sent. The parties may enter into an agreement setting forth either a longer or a shorter term for the response. That being said, the potential defendant does not have to respond to the complaint, and if it fails to do so, no sanctions can be employed against it for not responding.
If the parties fail to comply with the mandatory complaint procedure, the court will not examine the claim, which, however, does not preclude the relevant party from reapplying to the court after completing the complaint procedure.
In a number of case categories the complaint procedure is not mandatory; these include bankruptcy cases, corporate cases, cases on the recognition and enforcement of foreign judgments and awards, etc.
The system of courts of general jurisdiction does not normally provide for a mandatory complaint procedure. However, such a procedure must be completed if required by a federal law, for instance, in the case of claims on the termination of contracts in court and claims of individuals against insurance organisations in the sphere of automobile liability insurance. Should the complaint procedure fail to be complied with, the court will reject the claim without consideration.
The institution of statutes of limitation in Russia is one of substantive law, rather than procedural law as in some other jurisdictions.
The general statute of limitations for civil cases is three years. A number of types of case may be subject to shorter statutes of limitations. Thus, for instance, the statute of limitations for cases on the invalidation of voidable transactions is one year. Moreover, the statute of limitations cannot in any event exceed ten years.
The statute of limitations begins to run from the date when the party learned, or should have learned, of the violation of its right. At the same time, for claims for the application of the consequences of invalidity of a void transaction, the statute of limitations begins to run from the moment when the performance of such a transaction commenced. The 10-year statute of limitations begins to run from the time of violation of the injured party’s right, rather than the date on which such a party learned, or should have learned, of that violation.
Claims are filed at the location (for legal entities) or domicile (for individuals) of the defendant. The law may provide for other requirements to filing claims with a relevant court. Thus, claims on rights to land plots shall be filed at the location of those land plots irrespective of where the defendant resides or is located. The same holds true for claims against carriers that should be filed at the location of the carrier.
The courts involved also differ. When the defendant is an individual, the claim may be filed only with a court of general jurisdiction. Where a claim is filed by a legal entity, and the defendant, too, is a legal entity or an individual entrepreneur, the claim shall be filed with an arbitrazh (commercial) court, provided that it arose from the business, or other economic activities, of the parties. Conversely, where a claim is filed by an individual, in the overwhelming majority of cases it will be properly filed with a court of general jurisdiction.
Legal proceedings are initiated based on a statement of claim filed by the plaintiff. The statement of claim must indicate the parties to the dispute, their addresses, the subject matter of the dispute, the applicable rules of law, the value of the claim and the underlying calculations, the name of the court, the circumstances underlying the plaintiff’s claims and the evidence proving such circumstances. The claim should also show that the plaintiff has completed the pre-trial complaint procedure. Moreover, the plaintiff can also include a motion for injunctive relief (interim measures) in the claim.
The claim must have, enclosed within it, proof of the powers of the signatory of the claim (a power of attorney); proof of the circumstances underlying the plaintiff’s claims; proof of payment of the state duty; proof of the sending of the claim to the defendant; proof of state registration of a plaintiff that is a legal entity or an individual entrepreneur; and proof of the plaintiff’s and defendant’s addresses. Furthermore, if the court has introduced interim measures, the claim must have enclosed within it the respective judicial act on interim measures.
Notification of the parties of an initiated litigation must be effected through a means capable of ensuring that the service to a party is recorded. Such a notification is normally carried out by sending registered letters with a list of enclosures and a notice of receipt. A notification of process will be valid only if it comes from a court or was effected by a party on the court’s instructions.
In Russia, service is also recorded. A person is deemed notified of a litigation if the notification was not received for reasons within the control of that person. This would be the case, for example, if that person does not regularly check their letter box or has refused to receive the notification.
Moreover, in arbitrazh (commercial) courts, the parties must track the progress of the case themselves from their first notification of the litigation. If the court has notified a party of the litigation once, it is no longer obliged to send any further notifications to that party. The same procedure is used in courts of general jurisdiction for legal entities and individual entrepreneurs. But if individuals are involved, the court must notify them of each new hearing.
A claim against a Russian resident can also be filed in a jurisdiction outside Russia. This usually happens if the parties have agreed on a different court, outside the jurisdiction of Russian courts, in their contract or if another court has exclusive competence over the dispute in question.
If the defendant fails to appear at the hearing and submit its written position to the court in response to the claim filed, the court will try the case in a standard procedure without any special implications.
A court of general jurisdiction may render a summary judgment should the defendant fail to appear. A summary judgment will be set aside if the court finds that the defendant’s failure to appear was caused by compelling reasons the defendant was unable to communicate to the court in a timely manner, and if the defendant relied on circumstances and submitted evidence that could affect the merits of the judgment.
Pursuant to Article 225.10 of the Russian APC, the right to file a class (group) action arises if the following conditions are cumulatively met:
Moreover, at the time of filing of a class action with an arbitrazh (commercial) court, it must be joined by at least five members of the relevant class.
Such actions in commercial litigation are typically actions in corporate disputes and disputes related to the operations of professional participants in the securities markets. It should be noted that corporate actions, being collective, are tried pursuant to the special rules of Chapter 28.1 of the APC, different from the general rules applicable to class actions. Thus, for instance, corporate actions are not subject to the requirement that at least five shareholders join such an action; a corporate action may well be filed by a sole shareholder.
Class (group) action in commercial litigation is based on the opt-in model, that is, to join an action, a group member must explicitly express its intention to this effect in writing. In that case, the circumstances established by an effective judgment of an arbitrazh (commercial) court in a prior case on the protection of the rights and legitimate interests of the group, do not have to be proven again when the arbitrazh (commercial) court proceeds to examine another case on a claim filed by a member of that group who had failed or refused to join the claim for the protection of the rights and legitimate interests of the group earlier filed against the same defendant and concerning the same subject matter, save where the circumstances are challenged by that member of the group.
An important exception is made for class action in corporate disputes on the recovery of damages caused to the company and challenging the company’s transactions. By virtue of Article 65.2(2) of the Russian CC, corporation members who have not, in accordance with the procedure set forth by the procedural legislation, joined an action for the recovery of damages caused to the corporation (Article 53.1) or an action to invalidate a transaction made by the corporation, or on the application of the consequences of invalidity of a transaction, cannot subsequently file identical claims with a court, unless the court finds the reasons for that filing to be compelling.
It should also be noted that a revised version of the Russian CPC has entered into force from 1 October 2019, with a new Chapter 22.3 on cases for the protection of the rights and legitimate interests of a group of persons. Thus, since 1 October, class actions have been regulated by the Russian CPC as well.
The conditions to be met to file a class action in a civil procedure are the same as stipulated in Article 225.10 of the Russian APC. But unlike the rule in the Russian APC, the Russian CPC requires that the action should be joined by at least twenty members of the group. In order to join a class action in a civil procedure, a party will also need to express its intent to do so in writing. The consequences of failure to join are the same as those provided in the Russian APC.
There are no requirements to provide clients with a cost estimate for legal services before the litigation. For this reason, the party incurring those costs does not have to inform the other party of the same in advance.
But since the court assesses whether legal costs are reasonable if it is adjudicating over a matter of their recovery, it is feasible to disclose the approximate amount of potential legal costs to the other party in advance. That may be useful at the stage of recovery of legal costs but does not unconditionally guarantee that in such a case the legal costs will be recovered in full.
In general, Russian courts do not issue interim judgments on issues in litigation. But preliminary injunctive relief (interim measures), discussed in more detail in 6 Injunctive Relief, is akin to such interim judgments.
A party may not seek to have a judgment delivered on some or all issues relevant to the merits of the dispute. These issues are usually resolved by the court when it renders its final judgment after the trial has been completed. At the same time, the court may decide on some interim issues, such as, for example, its own jurisdiction over the case, if one of the parties is contesting its competence. Such issues are not distinguished as independent issues in theory or in practice, but rather make an integral part of the legal process as a whole.
Moreover, pursuant to Article 160 of the Russian APC, if one statement of claim combines a claim to establish the grounds of the defendant’s liability and an associated claim to apply sanctions, the arbitrazh (commercial) court may, if the parties consent, consider such claims in separate hearings.
Should it be satisfied by the claim to establish the grounds of the defendant’s liability; the arbitrazh (commercial) court, immediately or after a break that cannot exceed five days, may hold another hearing and use it to consider the claim for sanctions, including to determine the amount sought.
However, based on the results of consideration of the case over several separate hearings held pursuant to the rules of Article 160 of the Russian APC, the arbitrazh (commercial) court issues a single judgment on all of the claims filed.
The most typical dispositive motions in arbitrazh (commercial) proceedings are motions to terminate the proceedings in the case or to leave the claim without trial.
The key differences between terminating proceedings in the case and leaving the claim without trial are that in the former case, a party can no longer file a similar claim with a court, while in the latter case the party retains the right to go to court.
The grounds for terminating proceedings in a case are as follows (Article 150 of the Russian APC):
A claim may be left without trial on the following grounds (Article 148 of the Russian APC):
Similar dispositive motions can be filed in civil proceedings.
A third party that has not joined the case may intervene before the trial is completed in the court of first instance.
The law distinguishes the following types of third parties:
The former may intervene in a case if the judicial act may affect their rights and obligations with respect to one of the parties (for instance, if the claim against the defendant is granted, the defendant may then sue the third party for damages).
The latter have an independent protected interest in the subject matter of the dispute. For example, if the plaintiff (ex-husband) files a claim to divide a land plot against the defendant (ex-wife), seeking to get a part of that land plot, the defendant’s father may join the case, arguing that the land plot was purchased with his money and advancing his own claims to the entire land plot. In this case, the father is a third party with independent claims with respect to the subject matter of the dispute. The third party has an interest of its own in the outcome of the case and joins an already pending procedure.
Security for a party’s legal costs does not generally apply in Russia. Such security can be sought as part of injunctive relief (interim measures), see 6 Injunctive Relief, but that remedy will be exotic and very unusual for the Russian legal order.
Courts deal with the issue of distribution of legal costs after they complete trial on the merits. Thus, the costs incurred by the parties in the course of examination of interim judgments (which is also extremely atypical) will be allocated by the court only after it delivers its final judgment.
As a general rule, the law does not set forth the timeframe for considering motions. Courts consider motions in the course of the litigation. They can either do it on the day when a motion is filed, or leave it open and come back to it later, when they render the judicial act on the merits of the dispute.
That, however, should not apply to motions for injunctive relief (interim measures). The court must resolve such motions no later than the day following the day of their submission, and without summoning the parties.
Also, five business days are given for motions to cancel interim measures.
Moreover, challenges to courts, experts, specialists and other participants of the case are generally examined on the day when they are filed.
The discovery procedure, as traditionally understood, is not used in Russia. By virtue of Articles 65 of the Russian APC and 56 of the Russian CPC, each party must prove the circumstances it relies upon in support of its claims and defences.
Additionally, the opposing party does not have an obligation to disclose evidence, including against itself.
Discovery with respect to third parties does not apply. But, if the parties to the dispute request it, the court can demand that third parties supply evidence. Such evidence disclosure requests are often addressed to state authorities and legal entities that do not participate in the litigation (for more details, see 5.4 Alternatives to Discovery Mechanisms).
The court can, in a number of cases, oblige a third party to appear and give testimony on the merits of the dispute. This mechanism, however, is not frequently used by courts.
As the discovery procedure is not used in Russia there are no particular rules governing it.
In Russia, there are alternative ways to collect and submit evidence to the court.
If a party is unable to obtain evidence, the court can assist it in requesting that evidence.
A motion to call evidence must indicate:
The court shall issue a request for evidence to the relevant party or request the evidence directly from the addressee of the request. The party in possession of the evidence requested by the court shall submit it to the court or deliver it in person to the requesting party for submission to the court.
In practice, courts often refuse to call evidence from the opposing party.
At the same time, there also exists a somewhat different legal approach expressed in Resolution of the Presidium of the Supreme Arbitrazh (Commercial) Court of the Russian Federation No 12505 dated 6 March 2012. According to this approach, if one of the parties supplies compelling and adequate proof of a fact, and the other party has no difficulty in refuting the existence of such evidence by relying on the evidence in its possession, the fact can be deemed proven. In other words, there is a presumption of proof in this case.
It is also possible to collect evidence by filing an advocate’s request. Upon receiving such a request, the addressee must reply on the merits of the questions posed within 30 days from receipt.
Legal privilege can apply only to advocates, that is, those who have passed the bar exam and received a special advocate status. This concept is defined, in Russia, as advocate (attorney-client) privilege. It does not cover other lawyers, including in-house counsel.
The key document governing advocate privilege is Federal Law No 63-FZ dated 31 May 2002 On the Practice of Law and the Legal Profession in the Russian Federation.
Pursuant to Article 8 of this Law, advocate privilege covers any and all information related to the advocate’s legal assistance to his or her client. Thus, the list of documents and information protected by advocate privilege, is rather wide.
An advocate cannot be summoned and interrogated as a witness to the circumstances he or she became aware of in view of his or her client’s request for legal assistance or the rendering of that assistance.
Law enforcement agencies’ searches and investigative operations with respect to an advocate (including in residential premises and offices used for the advocate’s activities) are only allowed based on a court decision.
The information obtained via law enforcement agencies’ searches or investigative operations (including after the suspension or termination of advocate status) can only be used as evidence by the prosecutor when it does not belong to the advocate’s files kept for the cases of his or her clients. These limitations do not extend to instruments of crime or prohibited or restricted items.
An important distinction between advocate privilege and legal privilege in common law jurisdictions is that only the attorney (advocate) can invoke advocate privilege to refuse to disclose a document, but not the client. Advocate privilege in Russia is aimed at guaranteeing the inviolability of information the client provides to the advocate and to encourage the client to be as candid with the advocate as possible, rather than to accord general protection to certain categories of documents, irrespective of who holds them.
The parties may refuse to submit evidence if that evidence contains state or other secrets protected by the law. However, these rules do not apply to a court request, and if a court has requested information containing state secrets, the party must submit it to the court.
The Russian legal system distinguishes between two main categories of injunctive relief (interim measures): preliminary interim measures and interim measures introduced by a court in a standard procedure.
Preliminary interim measures can be introduced by a court before a party files its claim. In that case, if the plaintiff fails to file its claim within the term set forth in the court’s ruling on preliminary interim measures, the measures will be cancelled by the court.
Interim measures introduced by a court in a standard procedure should be requested simultaneously with the filing of the statement of claim.
Injunctive relief is permitted at any stage of the commercial procedure if a failure to introduce such measures can complicate or frustrate the execution of the judicial act, including where the judicial act is supposed to be executed outside of the Russian Federation, as well as in order to prevent significant losses to the applicant.
The list of interim measures that can be taken by a court is not exhaustive, and the court can take various measures based on the applicant’s request. It is important that the interim measures introduced should be proportionate to the claim advanced. Article 91 of the Russian APC lists the following types of injunctive relief:
In theory, a court may prohibit the parties from referring their dispute to a court in another jurisdiction. But we are unaware of any such instances.
To improve its chances of obtaining injunctive relief, a party must provide counter-security for the potential losses of the opposing party. The most suitable security is a deposit of funds with the court or a bank guarantee for the amount of the claims made. But provision of counter-security, in and of itself, does not guarantee that the court will grant injunctive relief.
The issue of injunctive relief should be examined by the court no later than the day following the filing of the respective application with the court. Courts normally observe this term.
Applications for injunctive relief are considered by courts without summoning the parties to a hearing and without notifying them. In some cases, the court may, at its discretion, notify the parties and schedule a hearing to resolve the issue of injunctive relief.
The defendant and other parties whose rights have been violated by the injunction securing the claim may, after the issuance of the arbitrazh (commercial) court’s judicial act refusing to grant the claim, demand recovery of damages or payment of compensation.
The amount of compensation shall be determined by the court depending on the nature of the violation and other circumstances, subject to the requirements of reasonableness and equity. That said, the compensation in corporate disputes may range from RUB10,000 to RUB1 million; and from RUB1,000 to RUB1 million for other disputes.
Since the list of injunctive relief (interim measures) is not exhaustive, the court may attach the respondent’s worldwide assets. A ruling on such relief can indicate the amount of assets attached and make no special mention of the effect that the attachment has worldwide, but such a worldwide asset attachment will be implied. At the same time, its efficiency will be heavily dependent on the plaintiff’s efforts to have such injunctive relief recognised in other jurisdictions (if permissible) or to seek similar measures in support of the Russian litigation, with reference to the Russian court’s act granting injunctive relief as evidence of the necessity of such measures.
Interim measures may be introduced by a court against third parties as well, as expressly stipulated in Article 91 of the Russian APC (see 6.1 Circumstances of Injunctive Relief).
Any and all transactions by the debtor made in violation of an injunction will be deemed invalid. Moreover, the debtor itself and third parties, if they were aware of such an injunction, may face criminal charges for malicious incompliance with the judicial act.
Article 315 of the Criminal Code of the Russian Federation envisages the following punishments:
Procedure in court is initiated based on the written statement of claim filed by the plaintiff. The court then schedules a preliminary hearing of the case. The aim of this preliminary hearing is to prepare for the proceedings proper. At the hearing, the court would see whether the evidence in the case is sufficient, resolve the motions submitted by the parties and determine other matters to be resolved during the preparation for a proper hearing.
Although this stage is intended to prepare for the litigation, it is more formal in practice. The reason is that in subsequent hearings, the parties are not deprived of the opportunity to present further evidence, examine experts and take other steps that can be completed only at the stage of the preliminary hearing.
After the court is satisfied that the case is ready for hearing, it schedules the main hearing. Usually, the parties would support their arguments with written evidence in the case. For some categories of cases, for instance, concerning construction contracts, expert testimony would be commissioned. If the court still has questions after the expert testimony is presented, the expert may be interrogated at the hearing.
In arbitrazh (commercial) courts, witnesses are not questioned very often. The existing court practice does not deem their testimony substantial for the case and views it instead only in conjunction with the totality of other evidence in the case.
Courts of general jurisdiction are more attentive in their approach to witness testimony and often place such testimony at the core of decisions made in the case.
For some cases, a court renders its judgment based only on the written documents submitted by the parties, without summoning the parties to a hearing. These are mostly cases involving small claims (up to RUB500,000).
Case management as a separate institution does not apply for all types of cases. The conduct of litigation is managed by the court subject to the opinion of the parties. No hearings held in the course of the litigation can be especially long. In general, one hearing would take half an hour to an hour. If the court believes that it is not ready to issue the judgment or it needs to examine further proof, it postpones the hearing in the case. As a result, there can be three, four or five such short hearings, and the court would render its judgment at the last one.
Arbitrazh (commercial) courts can invite commercial court assessors (equivalent in some ways to jurors) to the procedure. They are engaged where the court is in need of special expertise in the spheres of economics, finance and management, or in view of the complexity of the case. Commercial court assessors may be engaged only in the court of first instance.
In the courts of general jurisdiction, cases are tried by professional judges only and the law does not provide for a procedure for resolving them with the involvement of court assessors.
In view of the adversarial nature of the legal process, the parties may only rely on the evidence that was disclosed by the court in advance before other parties. At the same time, in some cases a piece of evidence may be disclosed directly to the other party at the last hearing when the judgment in the case is announced. If this happens, the party doing the disclosing would usually incur no substantial sanctions for doing so.
Evidence is submitted to the court in the form of certified copies or original documents. When certifying a copy, the party confirms its authenticity, inserts its initials and affixes a “true copy” stamp and its signature. When a copy is submitted, it is added to the case files, and the original document may be reviewed by the court and the parties at a hearing.
Along with the submission of document copies, the court can also require that a party submit the original document. This is necessary in case of discrepancies between the document copies or doubts as to the authenticity of the submitted copy of the relevant piece of evidence.
Expert testimony is permitted in court. In a number of cases, such as, for instance, concerning challenging the cadastral value of real estate, it may be very difficult for the court to render its judgment without engaging an expert. The parties would usually submit an expert report commissioned by themselves. If the other party does not contest that report or the report contains no critical or manifest defects, the court will rely on it.
If, however, a party disagrees with an expert report submitted by the other party, the court may order a forensic expert inquiry. In such a case the expert organisation and the issues requiring expert testimony are determined by the court subject to the opinions of the parties.
The court may appoint an expert examination on its own initiative. But that happens extremely rarely, since the costs of such an examination will be paid from the public budget.
All court hearings are public, and any person may attend them. At the same time, closed sessions are allowed for some cases (see 1.3 Court Filings and Proceedings).
The court plays a passive role in litigation. In the circumstances of adversarial proceedings, the court evaluates only the evidence submitted by the parties. The court oversees the course of litigation and defines its procedure.
However, if the court believes that third-party rights may be affected, it can, on its own initiative, bring such affected parties to the proceedings. Moreover, the court can oblige a party to perform certain actions. Thus, for instance, it can require that the defendant appear at the hearing and submit an explanation of the merits of the dispute.
The Russian APC provides that the timeframe for a litigation starts running from the date when the claim is filed with a court. This term is three months in the first instance, two months in the second instance (appeal), and two months in the cassation instance.
For some cases, the timeframe for the proceedings is reduced. Thus, challenges against the actions of a court bailiff must be tried by courts within ten days from the court’s receipt of the claim.
But, in practice, courts frequently fail to meet these terms, without any consequences for the courts. On average, it takes about six to eight months to try a case at a court of first instance, and about two to three months for the appeal and cassation.
Under Russian law, a settlement agreement is a transaction. Accordingly, civil rights and obligations arise from the execution of such a settlement agreement. At the same time, settlement agreements only become binding upon their parties and enforceable after a court endorses them by its ruling, a ruling that should summarise all the terms of the settlement agreed upon by the parties, without exception. In approving the settlement agreement, the court simultaneously terminates proceedings in the case.
The court may not approve a settlement agreement if it violates third-party rights or is inconsistent with the law. There are no other grounds to refuse to approve a settlement agreement.
It should also be noted that not all, but only some of the participants of the proceedings can enter into a settlement agreement. This does not preclude approval of such an agreement.
By virtue of Article 141(7)(2) of the Russian APC, a ruling of a court dealing with arbitrazh (commercial) matters must contain the terms of settlement. Therefore, and since all judicial acts are published in the https://kad.arbitr.ru/ database, the terms of settlement cannot remain confidential between the parties. At the same time, if the settlement agreement contains state or other protected secrets, those terms will be confidential and will not be disclosed to third parties. However, to keep such terms confidential, the parties must submit a motion to have the settlement-related issues discussed in a closed session.
After a court approves the settlement agreement, the proceedings are terminated. The parties are then obliged to fulfill the settlement terms. If, however, a party to the dispute does not perform its undertakings, the other party may approach a court with an application for a writ of execution in order to enforce the settlement agreement.
After the respective party receives such a writ of execution, further execution of the judicial act is carried out in accordance with the general rules for the enforcement of judgments.
Since a settlement agreement is a transaction, the parties can agree to annul or amend any terms of that settlement agreement. Moreover, if any party to the dispute or other interested party believes that the settlement agreement approved by the court violates its rights, that party may contest that settlement agreement. The appeal will be filed with a cassation court and reviewed in a standard cassation procedure.
Judicial protection can take the form of remedies stipulated in the law. The most typical remedies are listed in Article 12 of the Russian CC:
By their legal nature, damages are compensatory. Punitive damages do not apply as a general rule. At the same time, one can see some semblance to punitive damages in the punitive penalty – that is, the penalty recovered on top of the amount of damages caused. Such a penalty is often agreed upon by the parties and enforced by the court. At the same time, if the penalty amount manifestly and unduly exceeds the amount of damages, the law provides that it can be reduced by the court in exceptional cases. In practice, nothing “exceptional” is required and courts very often reduce the penalty.
If the obligation in question involved payment of money, a default on such an obligation triggers accrual of interest. Interest accrues based on Article 395 of the Russian CC and its amount is defined by the key rate of the Bank of Russia. In 2019, that rate equalled 7-7.75%.
Interest accrues both during litigation and after the judgment in the case is delivered. The legislation sets forth no limitations for the maximum amount of interest accrued.
Judgments are enforced in accordance with the rules of Federal Law No 229-FZ dated 2 October 2007 On Enforcement Proceedings. The court bailiff service is a state agency and is funded out of the state budget.
After a judgment enters into full force and effect, the court issues a writ of execution. Based on that writ, the court bailiff service initiates enforcement proceedings. A court bailiff gives the debtor five days to execute the judicial act voluntarily, and if the debtor does not comply, it must pay an enforcement fee of 7% of the awarded amount. If the debtor fails to execute the judicial act, the court bailiff uses compulsory means of execution, such as, for example:
To have a foreign judgment recognised and enforced, the interested party must file a respective application with a court. This application must be filed within three years from the time when the foreign judgment entered into full force and effect. The term may be renewed by the court if it was missed for compelling reasons.
Recognition and enforcement of foreign judgments in the Russian Federation is possible if there is a bilateral or multilateral treaty on reciprocal recognition of judgments between the Russian Federation and the foreign state whose court’s judgment the applicant seeks to have recognised. Moreover, Russian courts recognise foreign judgments based on the principle of reciprocity. To prove such reciprocity, the applicant must demonstrate that the courts of the state whose judgment it seeks to have recognised, recognise Russian judgments. In practice, that requires a legal opinion from a lawyer qualified under the law of that state and/or translated judgments of the courts of that foreign state recognising Russian judgments.
Upon consideration of the application, the court issues a ruling on the recognition and enforcement of the foreign judgment. Based on that ruling, the applicant receives a writ of execution it then presents to the court bailiff service for execution (enforcement) (for more details, see 9.4 Enforcement Mechanisms of a Domestic Judgment).
In the Russian Federation, there exist both appellate and cassation mechanisms of judicial review. Furthermore, judicial acts can also be revised in a supervisory review procedure.
The system of courts of general jurisdiction usually offers the following instances that may differ depending on the category and amount of the dispute:
The system of state arbitrazh (commercial) courts has the following instances:
Where a party disagrees with the court’s judgment, the judgment may be reviewed by an appeal court based on the interested party’s appeal. Not only parties to the dispute can appeal; a third party that was not involved in the case but believes that the judgment violates its rights may also do so.
The judgment of the court of first instance can be set aside or amended by the appeal court on the following grounds:
A violation or improper application of the procedural law rules warrants reversal or amendment of the judgment only where it resulted or could result in an incorrect judgment.
The judgment of a court of first instance is set aside in any event based on the following grounds (the so-called absolute grounds to set aside a judicial act):
A distinctive feature of the appeal procedure in higher courts (starting from the cassation court level) is that those courts cannot independently establish the facts of the case and must follow the facts found by lower courts. If the court believes that some fact relevant to resolving the case was not established, it remands the case for a new trial to a lower court.
To initiate an appellate procedure, a party must file the appropriate appeal with a court. The appeal must be filed with a court within a month from the date when the judgment was produced in full.
That party must enclose with the appeal the appealed judgment, proof of payment of the state duty, proof of powers of the representative (a power of attorney), and proof of sending the appeal to other parties involved in the case.
The appeal is filed with a court of first instance rather than directly with an appeal court.
The court of appellate instance rehears the case on the merits. The parties may not submit new arguments or evidence to the appeal court, except where they can prove that it was impossible to submit those arguments and that evidence before the court of first instance. An example of such a situation includes dismissal by the court of first instance of a motion filed by a party, where the appeal court finds such dismissal unjustified.
In that case, a court generally cannot go beyond the scope of arguments of the appeal. But the court in any event verifies the judgment for any violations constituting the so-called absolute grounds to set aside a judicial act (see 10.2 Rules Concerning Appeals of Judgments).
If the court of first instance committed violations that constitute an absolute ground to set aside the judicial acts, the appeal court proceeds to try the case as a court of first instance. In that case, the parties may submit further evidence.
Russia has a total appeal system, meaning that all appeals are referred to an appeal court and no selection is carried out either by the courts of first or appellate instances.
After a court hears an appeal, it may decide to:
The attorney’s (representative’s) fees incurred by the prevailing party are recovered from the other party in the case. Where the claim is granted in part, the legal costs shall be covered by the parties involved in the case, pro ratato the amount of claims granted by the court.
Where the plaintiff was duly released from payment of the state duty, the state duty shall be recovered from the defendant to the federal budget pro rata to the amount of claims granted by the court, unless the defendant is also exempted from its payment.
Furthermore, the losing party is also charged with such legal costs as the fees of experts, witnesses and specialists.
The amount of legal costs to be recovered from the losing party should be reasonable. Legal costs are often drastically reduced. Thus, where the actual costs incurred amount to around RUB1 million, the court might recover merely RUB150,000 from the losing party.
While arbitrazh (commercial) courts do not reduce the legal costs that much, they can be lowered ten times or more in courts of general jurisdiction.
According to Clause 10 of Resolution No 1 of the Plenum of the Russian SC dated 21 January 2016 On Certain Matters of Application of the Legislation on the Compensation of Trial-Related Costs, a party applying for the recovery of legal costs must prove the amount of those costs, the fact that it incurred them, as well as the connection between incurring the costs and the case tried by the court with that party’s involvement.
Failure to prove these circumstances is a ground for a court to refuse to award costs.
Moreover, when a court renders a judgment to award costs, it assesses the reasonableness of the amount of costs incurred.
The definitive approach on whether interest can accrue on the awarded legal costs was only recently formulated in the Russian law. The Russian SC, in its Ruling No 309-ES17-7211 dated 12 October 2017, concluded that interest on legal costs may accrue.
Interest shall accrue from the time when the court awarded legal costs, and the amount of interest is determined using the Bank of Russia’s key rate pursuant to Article 395 of the Russian CC.
Russia offers access to all possible types of ADR, including, in particular:
The most frequently used mechanism is arbitration. Mediation is rarely resorted to, although there is a special law in this area and a wide campaign to promote that institution.
In general, state policy is aimed at expanding the use of ADR. At the same time, due to its lack of efficiency (although this does not relate to arbitration), ADR is unpopular.
In some cases, ADR is compulsory. Thus, for instance, before filing a claim with a court, an individual must challenge the decision of an insurance organisation on the payment of an insurance indemnity under an agreement on automobile liability insurance, before a financial ombudsman.
Despite the low popularity of ADR, it is actively promoted. Conferences are held with the involvement of arbitral and other alternative institutions. Such conferences are often organised with the support and participation of state authorities.
The principal law governing the conduct of arbitration is Federal Law No 382 dated 29 December 2015 On Arbitration (Arbitration Proceedings) in the Russian Federation.
This law sets out the key principles of arbitration, the requirements of an arbitration clause, the composition of the arbitral tribunal, its competence, the arbitral procedure and other organisational issues of arbitration.
Arbitral awards are enforced as provided for by the procedural codes, that is, the Russian CPC and APC.
The following disputes cannot be referred to arbitration (Article 22.1 of the Russian CPC and Article 33 of the Russian APC):
This list is non-exhaustive and the law can provide for other categories of cases that are non-arbitrable.
Arbitral awards may be set aside by a state court on one of the following grounds:
To enforce an arbitral award, a party to the dispute shall file the respective application with a state court.
It should enclose to the application, in particular:
The application must be considered by the court within one month from its filing with the court. As a result of this consideration, the court shall issue a ruling to recognise and enforce the foreign award/issue a writ of execution for the enforcement of a domestic award.
After that, the party receives the writ of execution and submits it to the court bailiff service for enforcement (for more details, see 9.4 Enforcement Mechanisms of a Domestic Judgment).