Litigation practice

As part of the analysis of the legislative instruments in Russia, the following ways of ensuring performance of obligations can be singled out: penalty, deposit, insurance, suretyship, retention, a letter of credit, an independent (bank) guarantee. The optimal strategy for preventing accounts receivables must be chosen in accordance with the terms of the contract. However, it is worth remembering that the listed interim measures do not guarantee a 100% recovery of the receivables.

As a rule, each case is individual and must be analyzed from several sides: the availability of the necessary documents and their correctness, the debtor’s solvency, the court in which the dispute will be considered, etc. It takes an average of 3 months (in case of simplified procedure) to 11 months (in case the defendant appeals against the court decision) from the moment a claim is sent to the court until the moment the money is received on the bank settlement account. If the debtor does not have funds in the current account, the process of receiving the debt may take up to 2-3 years (in case of bankruptcy of the debtor).

It is possible to apply art. 395 of the Civil Code of the Russian Federation, which provides for liability for failure to fulfill a monetary obligation if a different amount of interest is not established by law or by contract. The same article of the Civil Code of the Russian Federation also stipulates the procedure for calculating interest for obligation default.

The APC of the Russian Federation provides that civil disputes on the recovery of funds may be referred to the court’s resolution after taking measures for pretrial settlement after 30 days from the date of the claim, unless law or contract establishes other periods of time and procedures.

In this case, if the pre-trial settlement of the dispute is not observed, the filed claim will be returned in accordance with Art. 129 APC RF.

Most often, firms sell goods and services, but no one forbids them to sell their debts (receivables). There are several ways to execute this operation: factoring, when an organization / bank acquires debtor’s money requirements and collects debt on their own; the contract of receivables assignment (cession), in other words, the lender and the buyer of the debt sign an agreement on the assignment of debt.

As a rule, the claim must be sent to the local court at the location (legal address) of the defendant. Besides,  if the contract provides for the resolution of disputes in a particular court, then the dispute must be heard in that court. Real estate disputes are to be heard at the location of the disputed property.

Yes, you can. Guided by art.106 of the APC RF, the costs associated with legal proceedings (costs for experts, lawyers, translators, etc.), as well as sums of money related to the fare to the meeting place, are subject to collection.

In this case, according to Art.110 of APC RF court costs incurred by persons involved in the case, who won the court award, shall be recovered by the commercial court. If the claim is partially satisfied, the court costs are borne by the persons involved in the case, in proportion to the amount of the claims satisfied.

According to Art.259 of the APC RF the term for filing an appeal is one month. The deadline must be calculated from the time the decision was made in full. You can learn about the decision on the website https://kad.arbitr.ru/ by specifying in the search card the case number or the person involved in the case.

After receiving the court decision, each of the parties has the right to file an appeal against the decision of the court of first instance. For example, it is possible to appeal against the decision of the Moscow Court of Arbitrazh to the Ninth Arbitrazh Court of Appeal (appeal instance). Cassation appeal against the appeal decision can be submitted to the Arbitrazh Court of the Moscow District (cassation instance) and a cassation appeal to the Supreme Court of the Russian Federation (the so-called “second cassation”). The decision of the Supreme Court of the Russian Federation on the ruling of the “second cassation” can be appealed to the Presidium of the Supreme Court of the Russian Federation by filing a supervisory appeal (supervisory authority).

Distinctive features of the simplified procedure is the case hearing without summoning the parties and in a shorter time period (2 months).

The categories of cases investigated in the simplified procedure are listed in article 227 of the APC RF. Most of the cases in a simplified procedure consider claims for recovery of funds if the price of the claim does not exceed 500 thousand rubles for legal entities and 250 thousand rubles for individual entrepreneurs.

According to the current legislation of the Russian Federation, the costs incurred by the party of the dispute (whether the plaintiff or the defendant), including the payment of attorney’s fees and state fees, will be reimbursed by the party that lost the legal process. In other words, if a dispute with a state body is resolved in favor of a legal entity, then it can demand reimbursement of its court costs from a public authority.

To ensure the fulfillment of the obligation to pay taxes and fees, the tax authority, as a rule, chooses the most effective and extremely uncomfortable way for a business - the suspension of operations in a bank account.

The tax authority sends to the bank its decision on the restriction of cash flow. If the bank received a decision from the tax office to freeze the account, then it is obliged to accept it for execution. Unfortunately, it is not possible to know in advance about the upcoming blocking, as in accordance with Art. 23 of the Tax Code of the Russian Federation, the taxpayer is obliged to independently and timely transfer money to budgets.

Challenging non-regulatory legal acts, decisions and actions (inaction) of government officials is carried out under Chapter 24 of the APC of the RF.

Citizens and organizations can apply to the court if they believe that the conzzzed non-regulatory legal act, decision and action (inaction) do not comply with the law or other regulatory legal act and violate their rights and legitimate interests in business and other economic activities, illegally impose any duties and create other obstacles for their business and activities.

If, in your opinion, the state body committed illegal actions and caused damage to your organization, then you have the right to appeal to the court with a request to declare the actions of a public body illegitimate and to pay damages.

Article 225.1 of the Arbitration Procedure Code stipulates that some disputes may be referred to arbitration courts on condition that plaintiffs or defendants in such disputes have concluded an arbitration agreement on the transfer of such disputes to an arbitration court. In such a case, the dispute may be referred to an arbitration court only in the framework of arbitral proceedings, administered by a permanent arbitration institution, which approved, deposited and placed on its website the rules of corporate disputes resolution according to federal law, with the place of arbitration on the territory of the Russian Federation.

Disputes in the field of corporation law arise on issues related to the creation, management and participation in the organization. They do not include the activities of depositories, issues of hereditary property or division of property by spouses, including shares, stakes, etc.

Participation of a notary in corporate relations is necessary in the case of notarization of decisions made by the founders and the membership, in the process of alienation of shares in the authorized capital, certification of security and pledge agreement, etc.

In the first place, you should rely on the company's charter; it always stipulates the pre-emption rights to buy out stakes from other participants prior to third parties. You must first offer to purchase your participation interests to your co-founders, and only upon their refusal (in making the purchase) to third parties.

The procedure for the consideration of such disputes is prescribed in Chapter 28.1 of the APC RF. In accordance with the law, the claim must contain the registration number of the legal entity and the address of its location (legal address) among other requirements, provided for by Art. 125 of the APC RF. As an application, you must provide an extract from the Uniform State Register of Legal Entities, as well as the list of documents contained in Art. 126 APC RF.

In case the bailiff does not fulfill or improperly fulfills the requirements of the Federal Law dated 02.10.2007 No. 229-FZ “On Enforcement Proceedings”, the person may file a complaint regarding his actions / inaction by way of subordination within 10 days after the bailiff issues the decree, or within 10 days from the time when the person learned or should have been informed of the decree. The unsatisfactory decision can be appealed to the court.

Today, there are several ways to interact with bailiffs regarding debt. You can personally visit your local FSSP at the place of your registration or use the online service on the bailiffs official website for the exact answer.

The law provides for the possibility of submitting executive documents on collecting money to banking and credit institutions, and in the case of collecting money from the budget of the Russian Federation, executive documents must be submitted to the treasury bodies, financial bodies of the relevant subject of the Russian Federation or the municipality.

According to Art. 30 of the Enforcement Law executive proceedings are initiated based on an executive document following the petition of the recoverer. The petition and the executive document are submitted to the bailiff within 3 days from the date they were received by the bailiff unit, and within 3 days from the day the documents were received, the bailiff makes a decision either  to initiate or refuse the enforcement proceedings.

In cases of loss of the execution writ, you have the right to receive a duplicate. To do this, you must submit an application (describing the circumstances of the loss) within 3 years from the date of the original document issuance. Please note that the application is submitted to the court that issued the original.

Federal Law of 26.10.2002 No. 127-FZ "On Insolvency (Bankruptcy)" specifies the full list of documentation. For example, to start a bankruptcy case of an individual, you must provide:

- Personal documents (Personal insurance policy number/SNILS, passport, TIN, extract from the personal account, documents on marital status, including marriage contract, birth certificates of children (adoption, custodianship) and extract from EGRIP if available.)
- Documents confirming the financial standing of the applicant (income certificates, 3-NDFL (personal income tax) declarations, information on the status of cash accounts, current information about the salary from the workplace).
- Documents that indicate the property status of the applicant (inventory of property, certificate of ownership, an extract from the register of shareholders, documents on transactions carried out, etc.).
- Documents displaying claims of creditors (documentation showing that there are overdue debts, a list of creditors and debtors of an insolvent person, notifications sent to creditors on initiation of bankruptcy).
- Payment documents (state duties, statement of payment into court).

The list of documents for commercial bankruptcy:

- Constituent documents of a legal entity, as well as a certificate of state registration;
- A list of legal entity’s creditors and debtors stating the amounts of financial obligations to each of them;
- The balance sheet of the organization on the closing date;
- Report on the value of the legal entity’s property prepared by an appraiser;
- Other necessary documents, depending on the company’s legal form.

The bankruptcy law envisages quite an extensive list of documents to be attached to the petition in personal bankruptcy:

- Documents confirming the existence of the debt, existence or absence of an individual entrepreneur status;
-Citizen’s lists of creditors and debtors;
- Inventory of the citizen’s assets, specifying their location and place of storage;
- Copies of documents confirming the title of the individual to the assets;
- Information about the income gained and the amount of taxes withheld;
- Information from the bank on existence of accounts and deposits in the bank;
- A copy of the Government employment services decision on acknowledging the citizen jobless, if such decision was taken;
- A copy of the certificate of marriage / divorce;
- Other documents (the full list is indicated in paragraph 3 of article 213.4 of the Bankruptcy Law).

The debtor, bankruptcy creditor, authorized bodies, as well as the debtor’s employee, the former employee, who have claims for severance benefits and (or) labor wages may submit the petition on bankruptcy to the commercial court.