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The Russian Constitutional Court absolved Moscow from abiding by the 2014 (ECHR) ruling on Russia's $2-billion liability to the shareholders of Yukos

On 19 January 2017 Russian Constitutional Court considered it impossible to fulfill the decision of the European Court of Human Rights (ECHR) from July 31 2014, as it “contradicts the Constitution of the Russian Federation”: in other words, the court allowed the Russian authorities not to pay €1.9 billion to former shareholders of Yukos. In its 14 July 2015 decision the Court came to the conclusion that Russia may not enforce decisions under European Convention on Human Rights if they contradict the Constitution of the Russian Federation.

In 2014 the ECHR ordered Russia to pay former shareholders of Yukos compensation in the amount of €1.9 billion for the alleged violation of their rights to protection and a fair trial. Later, the Ministry of Justice sent a request to the Constitutional Court whether such payments can be made.

This case might have far-reaching consequences and right now it establishes a sort of precedent for the further non-compliance with some decisions of the ECHR. It resulted in the situation when Russia, in particular cases, may refuse to enforce ECHR’s decisions stating that they are contrary to provisions of the Constitution of the Russian Federation.

January 26, 2017

A new law gives Arbitrazh (commercial) courts In Russia the right to refuse cases

On 19.12.2016, Federal Law №. 453-F3, “Federal Law on amendments to the Arbitrazh Procedure Code of the Russia Federation” was signed by the President Putin.

Among reasons arbitrazh courts can refuse to try cases is lack of jurisdiction, if the case has already been tried and awarded, or if the case is being heard in another court. Before, commercial state courts could only end hearings after accepting cases. Now, the process is expedited. Under the new rules, the court decision and other documents will be sent to the applicant not later than five days from the date the claim is received by the court.

The new law brings the Arbitrazh Procedure Code in line with other procedural codes: Code of Civil Procedure of the Russian Federation and the CAS of the Russian Federation CAS. Courts of general jurisdiction could previously refuse cases. If a case is rejected, the rejection can be appealed to a higher court. If the case is rejected, the claim is recorded as submitted on the day the initial request was made to the court.

January 20, 2017

Formation and operation of arbitration tribunals in Russia in 2016

 Permanent arbitration institutions.

One of the most significant changes of Arbitration Law aimed to prevent creation of “pocket arbitrations” is mandatory licensing of permanent arbitration institutions in order to operate at the territory of Russia (not applied for two well-known arbitral institutions in Russia-International Commercial Arbitration Court and Maritime Arbitration Commission at the Chamber of Commerce and Industry of the Russian Federation).

The right to operate as permanent arbitration institution will be granted by the act of the Russian Government under recommendation of the Arbitration Development Council under the Russian Ministry of Justice basing on such criteria as specified list of arbitrators, reputation, range and kind of non-commercial organization’s activity etc.

Ad hoc arbitrations.

The authority of ad hoc arbitration is limited. First of all the corporate disputes cannot be subject to ad hoc proceedings. Another important revision is that parties to ad hoc arbitration lose their right to waive the right for the setting aside of an arbitral award, it could be disputed in the state court in any case.

Foreign arbitration institutions.

Foreign arbitration institution may administer the arbitration seated in Russia must obtain the consent of the Russian Government and for administering majority of corporate disputes to publish the special rules for corporate disputes.

In the absence of such consent the decisions of foreign arbitration institution will be considered as decisions of the ad hoc arbitration (with all abovementioned disadvantages).

December 23, 2016

New changes for joint stock companies and LLCs regarding the approval of large transactions are coming soon

On July 4, 2016 the President Putin signed Federal Law from 03.07.2016 #343-FZ "On Amendments to the Federal Law 'On Joint Stock Companies' and Federal Law 'On Limited Liability Companies' in the regulation of large transactions and transactions in which there is an interest."

The notion of "large transaction" (Article 78 of the Federal Law on Joint Stock Companies and Article 46 of the Federal Law On LLCs) now also includes transfers of property for temporary possession and/or use, providing third parties the right to use the result of an intellectual activity or means of individualization on the terms of the license, if their carrying amount is 25 percent of the book value of the company's assets.

The notion of "related party transaction" (Article 81 of the Federal Law on Joint Stock Companies and Article 45 of the Federal Law LLCs). Such a transaction is recognized in an interested member of the Board of Directors (Supervisory Board), the sole executive body, members of the collegial executive body of the company or person who is the controlling person of the company or the person entitled to give binding instructions to the public for him.

The decision to approve a major transaction will be called "the consent of the commission, or on the subsequent approval.

September 18, 2016

New Arbitration Legislation in Russia

Arbitration reform was initiated by the President Putin in 2013 aiming to increase the credibility of this type dispute resolution in Russia and update the framework regulating domestic and international arbitration. “Pocket” or “sham” arbitration tribunals in Russia were heavily criticized by many members of arbitration community.
On 29 December 2015 the President signed the Law on Domestic Arbitration in the Russian Federation (“the DCA Law”) and the Law on amendments into related acts (“the Amendments Law”). One of the most important act to be revised is the Law on International Arbitration 1993. The amendments will come into effect in September 2016.
Among the most important amendments in newly enacted laws are the status of foreign institutions that administer proceedings in Russia, the status of ad hoc arbitrations, and long debated issues of arbitrability of corporate disputes.

October 03, 2015

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