11.03.2016 — European Human Rights’ Watchdog Condemns New Powers of Russian Constitutional Court

The Venice Commission of the Council of Europe has criticised the Russian Constitutional Court for testing its new powers. The Court has started to consider the first request made under the recently adopted legislation by the Ministry of Justice. The Ministry alleges that the decision by the European Court of Human Rights (ECtHR), that a blanket (legislative) ban on electoral rights of convicted prisoners violates the European Convention, should be deemed unenforceable.

The Venice Commission is of the view that the new powers of the Constitutional Court, which allow it to declare the ECtHR decisions unenforceable, are inconsistent with Russia’s international law obligations. According to the Commission, the Constitutional Court is entitled only to assess whether ECtHR decisions are compatible with the Russian Constitution, but not to prohibit their enforcement in Russia.

The comment was made with regard to ECtHR decisions obliging the Russian state to pay out monetary compensations, as well as to carry out other ‘individual measures’ so as to restore the applicants’ rights. It will be recalled that according to the ECtHR statistics, Russia owes more than 2 billion EUR to successful applicants in 133 cases heard by the Strasbourg court (including the Yukos case).

10.03.2016 — Foreign Workers May Be Obliged to Prove Their Sanity

The State Duma is going to consider a new bill that proposes to extend the list of medical conditions preventing a foreigner from obtaining a work permit in Russia. The bill obliges foreign citizens wishing to work in Russia to submit (among other relevant documents) an opinion issued by a Russian medical organisation that confirms the absence of any mental disorders.

According to Gadzhimet Safaraliev, the author of the bill, the imposition of the above rule will limit any negative ramifications resulting from violent acts carried out by mentally ill people, and improve the perception of foreigners in Russia.

It will be recalled that in order to obtain a work permit in Russia, a foreign citizen shall submit a medical certificate confirming the absence of HIV/AIDS, a medical opinion confirming the absence of drug addiction and a number of transmissible diseases, such as tuberculosis, leprosy and syphilis.

09.03.2016 — State Duma to Consider New Social Insurance Payments

The State Duma is going to consider a bill obliging employers to make contributions to the Social Insurance Fund with the aim of providing additional guarantees to the company’s employees in case the company goes bankrupt. The bill provides that employees that have unexpectedly stopped receiving their salary due to the company’s insolvency will be entitled to obtain a one-off insurance payout, the amount of which shall be calculated based on the total debt accrued within the last three months not including the severance package, interest payable as a result of delay in salary payment, as well as other benefits.

According to the bill, the financial burden shall be borne by both, companies and sole traders, and shall amount to 0.02% of the payroll fund.

The bill also proposes to oblige employers to inform the Unified Federal Register of Activities of Legal Entities of any delays in salary payments amounting to more than 100 000 RUR. 

Should the said bill be passed, it will come into force on June 01, 2017, and employers will be given 90 days as of the official date of the act’s publication in order to register with the Social Insurance Fund as payers of social contributions for the purposes of insuring employees’ salary payment in case of insolvency.

08.03.2016 — Small B2B Debts to Be Recovered in Summary Proceedings

The Federal law No. 47-FZ amending the Arbitrazh Procedure Code was passed on March 02, 2016. The law has introduced changes with regard to compulsory pretrial dispute resolution and fast-track proceedings, as well as new concepts, such as ‘a court order issued in summary proceedings’ and ‘a special ruling’. The amendments will become effective on June 01, 2016. It is anticipated that they will expedite proceedings in commercial (arbitrazh) courts.

Pursuant to the above Federal law, the claimant can be entitled to commence fast-track proceedings (i.e. the case is resolved without an actual trial, but the court considers the arguments of both parties), provided that the amount in dispute does not exceed 500.000 RUR for legal entities and 250.000 RUR for sole traders. Moreover, the Federal law introduces the possibility of initiating summary proceedings, which enable the claimant to obtain a debt collection court order within 10 days and without an actual trial, provided that the debtor has acknowledged the debt but has not taken any actions to repay it. The maximum amount recovered by way of summary proceedings cannot exceed 400.000 RUR. Any debts exceeding the said amount shall be recoverable in full contentious proceedings.

Arbitrazh courts will also be entitled to issue special rulings, a measure used to promptly prevent the violation of legislation by state authorities, their officials, trial lawyers (‘advocates’), as well as other professionals.

07.03.2016 — General Director to Keep Company’s Documents for More Than 5 Years?

The Supreme Court has recently considered a dispute between a company and its former general director, where the company demanded that the latter returns all the company’s documentation, issued and handed over to him since 2005, and requested the court to order an astreinte of 10.000 RUR for every day of failing to comply with the court’s decision (case No. А33-16565/2014). The first instance court fully satisfied the company’s claim, however the appellate and cassation instance courts concluded that the general director shall return the documents issued within the previous 5 years only, and reduced the astreinte to 100 RUR for every day of non-performance and limited it to 50.000 RUR.

The Supreme Court partially upheld the decision of the first instance court, obliging the general director to return all the documents that had been handed over to him, including those created before 2010. Nevertheless, the Supreme Court agreed with the higher courts regarding the astreinte amount, thereby keeping it 100 RUR for every day of non-performance and limiting it to 50.000 RUR.

According to the Supreme Court, the company’s demands to return the documentation were lawful, as it follows from the strict construction of the Federal laws “On Accounting” and “On archive-keeping in the Russian Federation” that the obligation to keep accounting documentation is not limited to 5 years. Notwithstanding the fact that Russian legislation determines the amount of years within which the company’s documentation shall be kept, it does not suggest that the documentation shall be destroyed after the said period expires. Therefore, as noted by the Supreme Court, documents that are older than 5 years still have value to the company.