Beginning on 7 March 2012, pledges of participatory interests in Russian limited liability companies given by a legal entity may be enforced:
- pursuant to a court decision; or
- extrajudicially, if expressly provided for by an agreement between the parties.
For pledged interests created by an individual, the second enforcement option is only available at law when the consent of another individual (e.g. other participants, or a spouse) or body (state or corporate body) is not required to conclude the pledge agreement. In practice, this is fairly rare.
Beginning on 7 March 2012, the same regime for the extrajudicial enforcement of pledges will apply, irrespective of whether the pledge has been created by a legal entity or an individual.
The court regime for enforcement of pledges is less efficient in practice than extrajudicial enforcement of a pledge. It will usually be advisable for lenders to include this type of provision in the agreements to be signed once this change has come into force.
[Federal Law No. 405-FZ "On Amending Separate Legislative Acts of the Russian Federation Relating to Recovery Proceedings against Pledged Property", dated 6 December 2011]