Russian law allows arbitrazh (commercial) courts to grant summary judgments when the claim is uncontested, acknowledged by the respondent or when the claim amount is not financially significant.
Federal Law No. 86-FZ “On Amending the RF Arbitrazh Procedure Code Due to the Development of Summary Proceedings” (the Summary Proceedings Law)2 was adopted in June of this year and will substantially change the implementation of summary proceedings in arbitrazh courts. In this article, we review the most important and interesting changes to summary proceedings that were introduced by the Summary Proceedings Law.
Disputes That Qualify for Summary Proceedings
The following disputes may be subject to summary proceedings:
- claims to recover funds not exceeding 300,000 Rubles (appr. $10,000) for legal entities and 100,000 Rubles (appr. $3,000) for individual entrepreneurs;
- certain administrative and public relations disputes, particularly, administrative liability cases where the sole penalty is an administrative fine not exceeding 100,000 Rubles (appr. $3,000) and cases on recovery of mandatory payments and sanctions not exceeding 100,000 Rubles (appr. $3,000);
- claims based on documents submitted by theclaimant establishing the respondent’s monetary obligations, regardless of the claim amount, which the respondent has acknowledged but did not fulfill, and/or on documents confirming contractual debt; and
- claims based on a notary protesting a bill for non payment, to accept or to date acceptance.
Upon mutual consent of the parties, other disputes may also be considered in summary proceedings, if there are no intervening circumstances, such as a third party joining the process, the risk of disclosing a state secret or a breach of the lawful rights of third parties, the necessity to appoint an expert or to hear witness statements, the risk of a miscarriage of justice where summary proceedings are granted or the necessity to clarify additional circumstances and research additional evidence. The Summary Proceedings Law does not regulate how the parties may give consent for their case to be decided by summary proceedings (for example, if that consent can be included in a contract or if consent must be granted immediately before referring the case to the court or during the court proceedings).
Certain categories of cases, such as corporate disputes and class action lawsuits may not be considered in summary proceedings.
The Procedure for Considering a Case in Summary Proceedings
As a general rule, judges must consider summary proceedings cases individually within two months after a claim has been filed with an arbitrazh court.
The judge considering a summary proceedings case establishes the deadlines for the parties to submit their objections to the claim and evidence in the case. If a party submits an objection, new evidence or other documents after the expiration of the term set forth by the judge, these documents will not be considered by the judge and will be returned, unless the submitting party is able to justify the delay for not submitting its documents within the established term for reasons outside of its control.
Information technologies and the internet are widely used in considering summary proceedings cases. To grant access to electronic case material a judge will send the parties information giving them access to the electronic database with the case materials. After the supporting documents are submitted to court for consideration, they are placed on a secure webpage on the official website of the arbitrazh court; this page is only accessible to the case participants.
After the term expires for submitting evidence and documents, the judge considering the case in summary proceedings issues a judgment without summoning the parties for a hearing. No preliminary court hearing is held, no transcripts are recorded and consideration of the case may not be stayed or continued.
The Procedure and Timeframe for Appealing a Summary Judgment
A summary judgment is subject to immediate enforcement. However, an appellate court has the authority to suspend enforcement of a judgment if the appealing party either provides evidence of the irreversibility of the decision’s enforcement or provides counter security.
The term for appealing a summary judgment is brief. It may only be appealed in the appellate court within 10 business days after it has been issued. In addition, an appeal may only be considered in an appellate court by a judge individually on the basis of the evidence available in the court files.
The judicial act in a case considered in summary proceedings may also be appealed to an arbirazh court of the cassation instance, but only on the basis of a limited number of procedural grounds, such as improper composition of the court, undue influence by persons not involved in the proceedings, or failure to sign a decision or the signing of a decision by a judge not named in the decision.
The amended summary proceedings are yet another step towards introducing expedited procedures in Russia. This procedure should decrease the burden on judges and should facilitate faster and more efficient resolution of small claims and/or uncontested disputes. In addition, the procedure will minimize court expenses, particularly expenses for lawyers and travel, allowing the parties to resolve commercial disputes in all courts in Russia by electronically submitting documents through the Internet.
It’s possible that summary proceedings may become widely used in the sphere of banking and finance, allowing for the recovery of debt from borrowers to a fast and efficient manner. We would expect that banks and financial institutions may try to include clauses mandating the use of this procedure in their standard contracts.
On the other hand, the Summary Proceedings Law may lead to a significant restriction of procedural rights that are currently available to parties to a dispute. Certain disputes that may be considered in such proceedings could be very important for the businesses but the involved parties would not have the opportunity to properly present their case in court.
However, if a party does not want to have its case heard in summary proceedings, it may prevent its case from being heard in such manner by:
- expressing its objection to the procedure (in cases when such consent is mandatory); or
- creating circumstances preventing the consideration of a case in summary proceedings (involving third parties to the proceedings, petitioning for the appointment of an expert or summoning witnesses, or referring to a potential miscarriage of judgment, etc.).
We will, of course, only know how efficient and rational these proceedings are once the Summary Proceedings Law has had a chance to be implemented in practice.