Pre-trial disputes settlement procedure: new amendments take effect on 11 July 2017

In June 2016, a mandatory pre-trial procedure for resolving most commercial disputes was introduced through the adoption of amendments to the Commercial Procedure Code of the Russian Federation (the “Procedural Code”).

However, the new rules left several important issues unregulated (see our previous report). To resolve the issues that arose, in practice a new set of amendments was prepared and signed into law by the Russian President on 1 July 2017 (see Federal Law No. 147-FZ*).

These amendments, which will come into force on 11 July 2017, will narrow the categories of disputes, where pre-trial settlement procedures are mandatory.

Under the new rules, the mandatory pre-trial procedure remains applicable in civil disputes seeking recovery of money from contractual obligations, other transactions and in cases of unjustified enrichment. Such disputes may be referred to a commercial (“arbitrazh”) court after the expiration of 30 calendar days from the date of submitting the claim, unless another period or procedure is established by law or a contract between the parties.

Other civil disputes (as well as economic disputes from administrative and other public relations) are transferred to a commercial court after such cases have gone through the pre-judicial dispute settlement procedure, only if such procedure is provided for by federal law or a contract between the parties.

The amendments have clarified many controversial situations that often arose when assessing whether it was necessary to comply with the pre-trial settlement procedure. It will, in particular, no longer be necessary to comply with the mandatory pre-trial procedure in disputes as to whether a contract has been concluded or is valid or to reclaim property that is in the possession of another person.

* In Russian