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02.08.2021 — NEW RULES OF PRE-TRIAL NOTICE EXPLAINED BY SUPREME COURT

On 22 June 2021 the Ruling of the Plenum of the Supreme Court of the Russian Federation No. 18 “On some issues of the pre-trial mechanism examined in civil and commercial proceedings” was issued, in which the Supreme Court resolved a number of important issues connected with the rules of sending of a claim (including via electronic communication) as well as cases where sending of the claim is not required.

One of such clarifications is the provision on when it is not required to comply with the pre-trial procedure. Such cases include the recovery of penalty if the claim was sent earlier in the dispute in respect of the principal debt; submission of a counterclaim if the claim was sent earlier by a legal predecessor of a claimant; and in cases of amendments to the claim, applying to the court by a prosecutor or by public authorities.

A separate clause of the Ruling is dedicated to the issue of sending the claim via electronic correspondence. The Supreme Court clarified that the claim may be sent by email (and also by message via social media or messengers), but only in case if such procedure either is provided for in a contract or is the usual established business practice between the parties. In this case sending of the claim may be proved by screenshot certified by a party on its own behalf. Other clarifications of the Ruling are dedicated to the status of conciliation procedures during the pre-action resolution of disputes, the rules of interruption of the statute of limitations upon sending of the claim, as well as special aspects of the rules on the necessity of the pre-trial mechanism for certain categories of disputes.

(see Ruling of the Plenum of the Supreme Court of the Russian Federation dated 22 June 2021 No. 18)

26.07.2021 — STATUS OF BANK IN ENFORCEMENT PROCEEDINGS: WHAT CLAIMANT IS ENTITLED TO DEMAND

On 16 June 2021 the Presidium of the Supreme Court of the Russian Federation approved the Digest of case law on resolution by the courts of disputes relating to compulsory enforcement of the requirements of enforcement documents by banks and other lending institutions. The Digest summarized a number of important clarifications on the issues of banks’ work with enforcement documents.

The most important clarifications include, in particular, the clarification with regard to the procedural differentiation: in this connection, the lawfulness of the bank’s actions must be challenged under the rules of the Administrative Procedure Code of the Russian Federation (or section 24 of the Commercial Procedure Code of the Russian Federation) since the bank performs public functions in enforcement proceedings. However, if the claim on the recovery of damages is submitted against the bank in accordance with the procedure set forth in the Civil Procedure Code of the Russian Federation, the court must establish the lawfulness of actions in the civil case.

Moreover, the Supreme Court included the number of other important clarifications in the Digest. The bank’s obligation to provide information on the paid amounts and on the specific grounds of the impossibility of enforcement of an enforcement document upon the application of the recoveror could be included among such clarifications. The Supreme Court also clarified that the recoveror is entitled to request the bank via an application to enforce an enforcement document in part, and the bank’s obligations were specified: for example, if the recoveror specifies one settlement account of the debtor in the application, the bank is entitled to debit money from other accounts not protected by enforcement immunity.

These and other clarifications see in more detail in Digest of case law of the Supreme Court of the Russian Federation dated 16 June 2021

19.07.2021 — TENANT MAY RECOVER FROM THE NEW LANDLORD SECURITY PAYMENT WHICH WAS DEPOSITED TO PREVIOUS LANDLORD

The Supreme Court examined the case involving the landlord that purchased the leased premises, in respect of which the lease agreement was concluded and the security payment was deposited. The Supreme Court stated that due to transfer of ownership to the premises from the previous landlord to the new landlord, the latter assumes all rights and obligations under the lease agreement concluded in respect of the premises in full, and the previous owner is out of the lease relations. Under such circumstances the new landlord may be forced to return the security payment deposited by the tenant to the previous landlord.

The company concluded the lease agreement in respect of the premises with the individual entrepreneur (the initial landlord), in accordance with which it deposited the security payment to the latter. Later the entrepreneur sold the premises to another person (the subsequent landlord). The tenant and the subsequent landlord agreed to terminate the agreement subject to payment of compensation for termination to the tenant. However, the parties thought that the security payment was to be returned not by the new landlord, but by the initial landlord, and in this regard the tenant submitted the claim to the court on the recovery of the security payment from the initial landlord. The court dismissed the claim since the initial landlord was no longer the party to the lease agreement.

Subsequently, the tenant tried to recover the security payment from the new landlord, but the court of three instances dismissed its claim. However, the Supreme Court did not agree with the said approach of the lower courts and remanded the case for reconsideration, referring, in particular, to the fact that the new landlord received all rights and obligations of the landlord under the lease agreement, and that the transfer of rights and obligations of the landlord to another person may not worsen the position of the tenant, including by depriving the latter of the right to return the security payment (see Ruling of the Judicial Panel on Economic Disputes of the Supreme Court of the Russian Federation dated 18 June 2021 No. 306-ЭС21-4034).

12.07.2021 — SUPREME COURT PROTECTED RIGHT TO REDUCED RENTAL RATE FOR SMALL BUSINESS

On 1 June 2021 the Judicial Panel on Economic Disputes of the Supreme Court of the Russian Federation examined case No. 305-ЭС21-82 on the dispute between the company (a tenant) and the Department of Urban Property of Moscow (a leaseholder), in which the Panel established the need to apply the reduced rental rate stipulated by the legislative act of the constituent entity of the Federation, despite the additional agreement with the leaseholder on different terms.

The dispute was initiated upon the claim of the Department of Urban Property of Moscow against the company on the recovery of rent debt for the use of non-residential premises. Earlier the parties had concluded the additional agreements on extension of the lease agreement several times. Prior to signing the last additional agreement, the tenant as a small-sized and medium-sized enterprise sent requests to the leaseholder for establishing the reduced rental rate stipulated by the Decree of the Government of Moscow dated 25 December 2012 No. 800-ПП, but later signed the additional agreement providing for the rent at the market rate.

As a result, the tenant was not able to reach agreement with the leaseholder on the need to apply the reduced rate for the lease of the premises to it. Eventually the leaseholder, thinking that the tenant did not pay the rent in full, submitted the claim on the recovery of debt in the court. By the decision of the first-degree arbitrazh (commercial) court, upheld by the appellate court and the cassation court, the debt was recovered.

However, the Judicial Panel on Economic Disputes of the Supreme Court of the Russian Federation did not agree with the lower courts and remanded the case for reconsideration by the first-degree court, stating, in particular, that the company as a small-sized and medium-sized enterprise had the right for the application of the reduced rental rate, despite its signing of the additional agreement providing for another rental rate (see Ruling of the Judicial Panel on Economic Disputes of the Supreme Court of the Russian Federation dated 01 June 2021 No. 305-ЭС21-82).

05.07.2021 — CONSTRUCTION IN PROTECTED ZONES: NEW CLARIFICATIONS OF SUPREME COURT

On 23 June 2021 the Presidium of the Supreme Court of the Russian Federation approved the Digest of case law on disputes relating to construction of real estate objects in the protected zones of pipelines and in the borders of minimum distances to main or industrial pipelines.

The Digest addressed the issues of application of the use-restricted zones legislation until 1 January 2022 and the rights and obligations of the owners of pipelines and constructions situated within their protected zones. In this regard, the Supreme Court clarified the issues related to the procedure of establishing the protected zones. The Digest also specifies the range of regulations, on the basis of which the territory within the borders of minimum distances to a main or industrial pipeline is to be determined prior to the establishment of that zone in accordance with the procedure set out in article 106 of the Land Code of the Russian Federation.

Moreover, some of the clarifications of the Supreme Court address the issues of issuance of permits for building of constructions situated in the protected zones of a pipeline (or in the borders of minimum distances to a pipeline) and declaring these constructions unauthorized. In particular, the Supreme Court clarified that the construction built in such zone cannot be declared unauthorized if public access to information about such zone was not provided, and the developer did not know and could not have known about it. A separate paragraph of the Digest addresses the possibility of review of the case on demolition of an unauthorized construction based on new evidence if the issue of the developer’s awareness about such zone was not resolved.

(see in more detail Digest of case law of the Supreme Court of the Russian Federation dated 23 June 2021)