Russia: Arbitration and Dispute Resolution II

Procedure

Generally speaking, the courts of common jurisdiction are open to all members of the public over the age of 16. In principle, state arbitrazhniy court proceedings are also open to the public. However, in practice, special permission must be obtained to gain access to any hearing. In addition, state arbitrazhniy courts will sit in closed hearing in order to protect industrial secrets or commercially sensitive information.

Pleadings

Actions are begun in the court of common jurisdiction when a claimant files a statement of claim with the appropriate first instance court. The statement of claim will contain a mixture of alleged fact and law, coupled with details of the evidence that the claimant proposes to adduce at trial. However, the claimant can modify or add to his claim at any stage up until the moment when the court retires to consider its verdict.

The service of the pleadings will be effected by the court.

Under state arbitrazhniy court procedure, the claimant files a written and signed statement of claim, just, as he would do in a court of common jurisdiction case. While the defendant in a state arbitrazhniy court is expressly entitled to service a written defence as well as a counterclaim, the claimant in the court of common procedure has no such express right, although he will equally be permitted to serve a written reply.

Evidence

Under both the Civil Procedural Code of 1964 and the Arbitrazhniy Procedural Code of 1995, the chairman of the court is responsible for preparing a case for trial. He will question the parties in an attempt to clarify the issues in dispute between them. The chairman may also instruct the parties to deliver further documentary or other evidence to the court and has the power to examine the parties' experts before commencement of the main hearing.

There is no equivalent of common law discovery and disclosure of documents and there is no mechanism for the pre-trial exchange of expert evidence. In state arbitrazhniy court cases such evidence will be in written form. In courts of common jurisdiction cases – where experts are usually court appointees in any event – expert evidence will be required in oral and written form.

Judgments

Usually judgment will be given orally and in writing immediately after the proceedings have ended. If the court has consisted of more than one judge, this will (if necessary) be a majority judgment. In a complex case before a state arbitrazhniy court, there may be a three-day delay before full judgment is given.

Enforcement

The enforcement of all court judgments and orders by both courts of common jurisdiction and state arbitrazhniy courts is dealt with by the enforcement officer attached to the court for the district in which the enforcement is to be executed. The enforcement officer is an employed court official often reported to be of variable quality and dedication. Should it prove necessary, the officer can be assisted in his duties by both the police and the militia.

Litigation Costs

In the courts of common jurisdiction, the costs consist of the court fee plus the costs related to the trial of the case. In general, the claimant has to pay the necessary state court fee when starting an action, although there are certain exceptions.

The level of the state court fee will vary according to the value of the claim. It is calculated using the fixed table set out in the Law Of the Russian Federation Of the State Duty. Losing parties are usually ordered to pay the winner's costs. If a claim or a defence is only partially successful, then the cost award will reflect this.

Costs are dealt with in the same way in the state arbitrazhniy courts. However, under the Arbitrazhniy Procedural Code of 1995, the claimant always has to pay the state court fee.

Alternative Dispute Resolution Mechanisms

Under the Arbitrazhniy Procedural Code of 1995, the presiding judge has a duty at the pre-trial preparation to encourage the parties to settle their differences rather than engage in full-scale litigation. However, judges in the courts of common jurisdiction do not have a similar statutory duty and thus the public policy support for non-litigious civil dispute resolution remains patchy.

In addition to these limited alternatives to dispute resolution provided by the public court system, many arbitral bodies offer conciliation as well as arbitration services. However, formal alternative dispute resolution procedures are rarely used in Russia at the present time. Indeed, people are reluctant to use the new facility of private arbitration even for their domestic disputes.

No Concept of 'Without Prejudice' Negotiations or Settlement

Neither the Civil Procedure Code of 1945 nor the Arbitrazhniy Procedural Code of 1995 restrict the ability of any party to plead in evidence any negotiations or offers made by any other party before or after proceedings are commenced. The practical effect of this is to severely hamper any opportunity for the parties to resolve and settle disputes without admitting liability. If an offer to settle is made then it may be introduced into court proceedings as evidence of admission of liability, and hence great care must be taken when dealing with customer complaints and disputes of any kind.

For further information please contact Sergei Yuriev at:

[email protected]

or +7 095 258 5000.