14.05.2016 — Supreme Court Supported Pledgee Who Prior to Pledge Execution Relied on Data from EGRP
The Supreme Court of the Russian Federation in its ruling N 306-ES15-8369 dated 04.04.2016 protected the interests of a pledgee who relied on the validity and relevance of records in the Unified State Register of Real Estate Rights and Transactions (EGRP) that no other mortgage was agreed upon in respect of the property in question.
The Samara region Arbitrazh court ruled in favour of the bankruptcy supervisor – government corporation “Deposit Insurance Agency” - on the bankruptcy case of the open joint-stock company (OJSC) “Interregional Volga-Kamsky Bank of Reconstruction and Development” who asked to consider debt transfer agreements null and void and to apply implications of invalidated transactions thereto.
Thus, the Court decided that if an entity bona fide relies on credibility of the data available in the EGRP, such entity can rightfully expect to become the only pledgee. Its requirements must be addressed as a matter of priority, even if the former pledge is reinstated.
13.05.2016 — Expensive Property Lease to Be Subject to Approval as Major Transaction
A bill introduced to the State Duma proposes that lease agreements concluded in respect of property owned by joint-stock companies (AO) and limited liability companies (OOO) be considered major transaction if the value of such property accounts for at least 25% of the joint-stock company’s assets book value, or 50% thereof - as to limited liability companies. The assets’ value is to be determined on the basis of data of the accounting statements over the most recent period.
If the bill is approved, according to the Russian legislation such transactions will be subject to the consent of the Board of Directors or the consent of the general shareholder meeting (for joint-stock companies), and as for limited liability companies such transactions are subject to the consent of the general meeting of participants. Please note that even though it was not enshrined legally de facto long-term lease in some cases has already been recognized as major transactions, which required approval.
11.05.2016 — French Court Lifts Freeze on Russian Assets in Yukos Case
Since the District court of The Hague overturned the 2014 decision of the Permanent Court of Arbitration (The Hague) the French court released the Russian assets in the Yukos case. As a result, 7,5% of stocks owned by the Russian holding the All-Russia State Television and Radio Broadcasting Company (VGTRK) in Euronews were released from asset freeze.
Note that earlier, in 2014, the Permanent Court of Arbitration in The Hague ruled that Russia is to pay over 50 billion USD to the former Yukos shareholders. In this regard, Belgium and France began collecting the dаmаges. However, recently The Hague District court invalidated the decision of the Arbitration court, which gave Russia every reason to fight legal battle for release of its assets.
10.05.2016 — Russian Council of Judges Proposes Measures to Reduce Workload on Arbitrazh Court Judges
The draft document intends to allow a single judge to consider appeals, instead of a panel of three judges as it is done now. In addition, the Council of Judges suggests establishing clear definition of the powers of two cassation courts – district arbitrazh courts and the Judicial panel for economic disputes of the Supreme Court. The first cassation court will be entitled to investigate new evidence and to reassess relevant evidence of the case. In turn, the legal positions stated in the rulings of the Judicial panel of the Supreme Court will become a basis for reconsideration of analogous cases.
The Council suggests reserving the right of the parties to file motion for consideration by a judicial panel rather than by a single judge, and also setting out an exhaustive list of cases which are subject to review by a judicial panel despite the amendments.
The amendments proposed by the Council of Judges are quite ambiguous. Consideration by a single judge will probably reduce the appellate courts’ workload but can affect quality of their rulings. The right of the first cassation court to investigate new evidence will allow the parties to protract cases. The precedent-setting nature of the Judicial panel rulings will increase the consistency of case law, but at the same time will increase workload on lower courts whenever a change in their established legal stance is necessary due to the new precedents issued by the Supreme Court.