Mandatory pre-trial procedures before litigating in Russian courts

Global Publication May 2016

On June 1, 2016, amendments affecting litigation before Russian Arbitrazh (commercial) courts will come into effect.

The Arbitrazh Procedure Code of the Russian Federation (“APC”) will provide for manda-tory pre-trial procedures for most commercial disputes. As a general rule, the claimant will need to send a claim letter to the respondent before commencing litigation.

Legal background

The Russian Supreme Court pushed forward a series of amendments to the APC aimed at reducing the number of disputes resolved by the courts and, thus, reducing their caseload.

Starting from June 1, 2016, a civil law dispute may be resolved by an Arbitrazh court only after the parties have attempted to resolve it through a pre-trial procedure.

As a general rule, the claimant would need to serve a claim letter to comply with the pre-trial procedure, although different procedures (e.g. mediation) may be prescribed by law or agreed upon by the parties. A suit may be filed with the Arbitrazh court 30 days after the day when the claim letter was sent to the other party to the dispute; however a different term may be prescribed by law or the parties’ agreement (Art. 4(5) APC).

The APC provides for the following list of disputes in which compliance with pre-trial procedures is not required:

  • corporate disputes;
  • bankruptcy cases;
  • applications to set aside an arbitral award;
  • class action cases;
  • cases on the cancellation of an unused trademark protection; and
  • cases on compensation for breach of the right for timely judicial and enforcement process.

Compliance with pre-trial procedures is mandatory for all other categories of civil-law disputes, including non-contractual disputes arising out of unjust enrichment or tort. However, this requirement does not apply to cases arising out of administrative and other public law matters.

Consequences of failure to comply with the pre-trial procedure

Information on compliance with the pre-trial procedure by the claimant should be included into the statement of claim (Art. 125(2)(8) APC). Documentary evidence to prove that should be exhibited to the statement of claim (Art. 126(1)(7) APC). If these requirements are not complied with, the statement of claim will be shelved by the court in accordance with Art. 128(1) APC.

If the court determines that claimant failed to comply with the mandatory pre-trial procedure it returns the statement of claim (Art. 129(1)(5) APC). If the court establishes this only after initiating proceedings, the court leaves the claim without consideration (Art. 148(1)(2) APC).

Form and contents of claim letter

A claim letter is a statement addressed to the other party of the dispute that claims for voluntary remediation of a breach. The claim letter should be served in writing.

In practice the claim letter should usually include the following information:

  • names and addresses of the parties;
  • precise relief requested in the claim letter which should be identical to the relief to be requested in the prospective statement of claim;
  • legal and factual reasoning in support of the relief requested;
  • evidence in support of the relief requested should be exhibited to the claim letter unless already in possession of the other party;
  • amount claimed including penalties and interest (with precise description of calculation method used);
  • proposals to enhance amicable settlement of the dispute; and
  • indication of intent to file a claim with a court in case of failure to resolve the dispute amicably.

Method of serving the claim letter

It is advisable to serve a claim letter by registered mail with confirmation of delivery and list of enclosures. The letter should be served at the other party’s address as indicated in the Uniform State Register of Legal Entities. If a different address of the counterparty is indicated in the contract, the claim letter should be served at both addresses.

In addition, the claim letter may be served via email if: (i) a proper email address for communication between the parties was agreed upon by the parties; or (ii) such email address is specifically indicated at the official website of the party.

A 30-day period should expire prior to filing the law suit with the court. This starts running from the date of dispatch of the claim letter, rather than from the moment it was received by the other party.

Pre-trial procedures and limitation period

The limitation period is suspended for the duration of out-of-court procedures specified by law or contract. If no specific duration is provided for, the limitation period is suspended for 6 months starting from the date of commencement of the out-of-court procedures (Art. 202(3) Russian Civil Code).

In accordance with the views of the Supreme Arbitrazh Court and the Supreme Court of the Russian Federa-tion, a mandatory pre-trial procedure is considered to be an out-of-court procedure for these purposes. Hence, the limitation period will be suspended from the moment when the claim letter is dispatched at least until the expiration of the 30-day period provided for by the APC.

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