1. Applicable Law
1.1.1 The procedure for obtaining interim measures within disputes involving commercial entities heard by the state commercial (“arbitrazh”) courts of Russia is regulated by the Arbitrazh Procedure Code of the Russian Federation(APC).
1.1.2 In certain cases (e.g. involving the arrest of vessels etc.), the provisions of various international treaties are applied.
1.1.3 For cases adjudicated by international arbitration, provisions of the Russian Law on International Commercial Arbitration dated 7 July 1993 will apply together with the APC. As for domestic arbitration, the Federal Law on Courts of Arbitration in the Russian Federation dated 24 July 2002 will apply.
1.1.4 Further, certain legal provisions on interim measures are also provided in other laws:
- Civil Procedure Code of the Russian Federation;
- Commercial Maritime Code of the Russian Federation;
- Tax Code of the Russian Federation;
- Law on Insolvency (Bankruptcy).
1.1.5 For the purposes of this Guide, the provisions of the APC in respect of commercial entities will be referred to as they are the most relevant.
2.1 International and geographical jurisdiction – the venue
2.1.1 As interim measures are linked to a substantive underlying claim, the general venue rules provided by the APC equally apply to the corresponding request for interim measures.
2.1.2 According to the general rules, the claim should be filed with the court with jurisdiction over the respondent’s place of incorporation (i.e. the state registration of a company).
2.2 The effect of jurisdiction clauses
2.2.1 Under article 37 of the APC, the general venue rule outlined in paragraph 2.1.2 above applies. However, in cases where “exclusive jurisdiction” rules do not apply, the venue may be altered by a jurisdiction clause/agreement between the parties before the claim is filed with the court. If a binding agreement of this nature has been reached between the parties, the application to secure the claim must be filed with the court where the claim has been or is to be brought in accordance with the jurisdiction clause/agreement.
2.3 Subject-matter jurisdiction
2.3.1 Under Russian law, disputes involving commercial entities fall within the jurisdiction of arbitrazh courts under the APC. Thus, the venue rules provided in the APC are applicable in the event of commercial disputes, so a claim and/or an application for interim measures must be filed with the relevant arbitrazh court in accordance with the general venue rules set in chapter IV of the APC that provide that the claim must be filed at the court where the defendant is located (registered).
2.4 Choice of venue if more than one court has jurisdiction
2.4.1 When applying for an interim measure the applicant has the right to choose the competent court depending on the place where:
- the defendant is located (registered);
- the applicant is located (registered), or where the applicant’s rights have been violated, if preliminary interim measures are sought;
- the assets to be the subject of the requested interim measures are located; or
- in the event of a corporate dispute, where a legal entity involved in a corporate dispute is located (registered).
2.4.2 However, a court chosen by the applicant may refuse to grant the interim measure sought if it establishes that an interim measure granted by another court would be more appropriate to the circumstances of the case. Thus, when choosing a court, the applicant should consider the nature of the secured claim, the type of interim measure requested, as well as whether it is enforceable by the relevant court.
3. Types of Interim Measures and their Criteria
3.1 Three categories
3.1.1 In Russia, interim measures are divided into the following three major categories: (i) preliminary interim measures; (ii) measures to secure the claim; and (iii) enforcement measures. These different types of interim measures can be applied to monetary as well as non-monetary claims.
Preliminary interim measures (“Predvaritelnie obespechitelnie meri”)
3.1.2 A preliminary interim measure (i.e. an interim measure requested and granted prior to filing of a claim) may be granted if the applicant can prove at least one of the conditions outlined in article 90(2) of the APC:
- the non-granting of such measures may seriously complicate enforcement of a court decision or make such enforcement impossible; or
- the applicant may suffer material damage if an interim measure is not granted.
3.1.3 In addition to proving the criteria set out above, article 99(4) of the APC urges the applicant to provide counter security (by way of a bank guarantee, deposit etc.). Provision of counter security by itself does not however guarantee that an application for a preliminary interim measure will be granted.
3.1.4 If a request for a preliminary interim measure is granted, a court will issue an order indicating the timeframe for the applicant to file its substantive claim (within no more than 15 days). If the applicant fails to submit the claim within the timeframe set by the court, the court will cancel the preliminary interim measure that it granted.
3.1.5 Preliminary interim measures aim to secure assets before the substantive claim is brought. After the substantial claim is filed with the court, the preliminary interim measure remains in force as a measure aiming to secure the claim for the duration of the court proceedings.
Measures to secure the claim (“Meri v obespechenie iska”)
3.1.6 Under article 90 of the APC a court may order urgent temporary measures (such as an injunction) in order to secure a claim or the proprietary interests of an applicant. In order to obtain such measures, an applicant must prove that:
- the non-granting of such measures may materially complicate the enforcement of a court decision or make such enforcement impossible; or
- the applicant may suffer material damage if an interim measure is not granted.
3.1.7 In particular, serious complications in enforcing a court ruling may be connected with the respondent’s lack of assets or its activity aiming to reduce the amount of its existing assets in order to hinder enforcement.
3.1.8 The relief sought must be directly connected to the subject matter of the substantive dispute – for example, if the company’s title to a building is disputed, the applicant may ask the court to impose a temporary prohibition on the respondent taking any action in connection with the building, but it may not request that the court freeze the respondent’s bank accounts.
3.1.9 The relief sought must also be in proportion to the subject matter of the claim – for example, if a claim for the collection of USD 10,000 is filed, an applicant cannot seek to freeze or seize the respondent’s property worth USD 25,000.
Enforcement measures (“Meri obespecheniya ispolneniya sudebnikh actov”) 3.1.10 In accordance with article 100 of the APC, the rules governing measures to secure the claim are applied to enforcement measures in order to guarantee the enforcement of a court ruling resolving the substantive claim.
3.2 Types of interim measures available under Russian law
3.2.1 Article 91(1) of the APC sets out the following (non-exhaustive) list of interim measures:
- freezing bank accounts, seizure of money in cash, seizing property and other assets (including bank accounts) of the respondent which are in the respondent’s own possession or in the possession of third parties;
- placing a restriction order on the respondent and third parties prohibiting certain conduct or acts related to the subject matter of the claim;
- obliging the respondent to perform certain acts in order to prevent spoilage and impairment of the property in dispute;
- ordering the placing of property in dispute into the custody of the applicant or a third party;
- suspending the enforcement of a writ of execution or any other enforcement document; and
- suspending the sale of property if a claim on the release of property from seizure is filed.
3.2.2 When considering an application for the granting of interim measures, the court should make sure that an injunction would not make it impossible or extremely difficult for the respondent (if it is a company) to conduct its usual business activities or that the imposition of the interim measure would lead to any violation of Russian law by such a legal entity.1
3.2.3 The court may grant such other types of injunctions as it deems appropriate, as well as ordering several interim measures simultaneously. One interim measure may be replaced with another by application of the applicant or the respondent.2
3.2.4 However, the Russian court may only grant a “specific” injunction – e.g. freezing a particular bank account or property (such as a building, vessel or production facility). It is impossible to get injunction on “all properties and assets belonging to the respondent”.
4. Procedural and Evidential Requirements for Interim Measures
4.1 Procedural requirements
Form of the request
4.1.1 An application for interim measures may be filed together with the main claim or during the course of the substantive proceedings, but no later than the date on which the case is decided by the court. The applicant may apply for interim measures when the case is being considered by the court of first instance, court of appeal and court of cassation as well as the Supreme Court of the Russian Federation as a “supervisory” (i.e. extraordinary appeal) instance.
4.1.2 A request for an injunction may be included in the statement of claim or filed as a separate document. Applications for interim measures should be filed in written form only. Applications cannot be filed electronically.
Content of the request
4.1.3 Under article 92(2) of the APC, applications for interim measures should provide the following details:
- name of the court where the application is brought;
- applicant’s and respondent’s name and legal address/place of residence;
- subject-matter and amount of the substantive claim;
- reasons for applying for interim measures;
- an indication of the particular type of interim measure(s) requested; and
- a list of documents enclosed with the application.
Enclosures of the request
4.1.4 The applicant should attach copies of relevant documents to the request. It may also provide counter-security when necessary. An application for interim measures should also be supported by a document evidencing payment of a state duty of RUB 3000 (USD 45 approx.).3
4.2 Implementation of the procedure
Interim measure proceedings before the court of first instance
4.2.1 Consideration of an application for interim measures by the court includes the following stages:
- filing the request for interim measures with the court (Day 0);
- ex parte hearing of the request (Day 1);
- the court’s order (either granting an interim measure or rejecting it) is forwarded to litigants on the day following the day of the hearing. The order is immediately enforceable (Day 2). If the request for a preliminary interim measure is granted, the court’s order will also indicate the time period within which the applicant must file its claim on the merits of the case (no longer than 15 days). Failure to comply with the time limit leads to the cancellation of the interim measure(s). The order may be appealed within one month from the date of its issuance. The filing of an appeal does not affect the validity or enforceability of the injunction;
- the respondent may file a request for the cancellation of the (preliminary) interim measures (Day 5);
- the court considers the request for cancellation and either grants it or rejects it. This decision is also immediately enforceable (Day 11).
4.3 Evidential requirements
4.3.1 Interim measures are considered to be an urgent form of relief, thus evidence to the extent necessary to support the substantive claim on the merits of the dispute is not required.4
4.3.2 As mentioned above, generally interim measures may be granted if the applicant can prove at least one of the following facts:
- that the non-granting of interim measures may seriously complicate the enforcement of a court decision or make such enforcement impossible; or
- that the applicant may suffer material damage if an interim measure is not granted.5
4.3.3 The applicant should provide the court with documentary evidence of the existence of the challenged or violated right as well as the fact of its violation.
4.3.4 When evaluating the evidence submitted, the court considers the following criteria:
- the reasonableness and justifiability of the applicant’s request for interim measures;
- the likelihood of significant damage that would be incurred by the applicant in the event that the interim measures are not granted;
- the balance of interests of the concerned parties;
- the preservation of public interests and rights of third parties if the interim measures are granted; and
- the correlation of the requested interim measure(s) with the subject matter of the substantive claim and its amount, as well as how it would guarantee the initial aim of the interim measure requested.6
5. Legal Safeguards for the Respondent
5.1.1 When awarding interim measures, the court may request the applicant provide counter security in order to guarantee the reimbursement of possible damages that may be incurred by the respondent.
5.1.2 Counter security is provided either by transferring monies to the court’s deposit account in the amount proposed by the court, or by provision of a bank guarantee, pledge or other financial security of the same value. It may be limited to the amount of the claim and interest on it. However, the amount of counter security may not be less than half of the amount of the substantive claim.7
5.1.3 Counter security may also be provided by the respondent in order to lift the interim measures imposed, by depositing in the court’s account the amount sought in the substantive claim. Providing monies to the court’s deposit account is the only type of counter security available to the respondent.
5.1.4 Counter security will be requested by the court no later than the next day after the application for the provision of security is filed with the court. Counter security should be provided no later than 15 days after the relevant order is issued by the court. If counter security has been requested by the court, it will not be entitled to decide on the granting of interim measures until it is in receipt of documents that evidence the payment of such monies into the court’s deposit account.
5.1.5 An applicant’s failure to provide counter security within the period established by the court may result in the dismissal of its application for interim measures. If the respondent confirms its provision of counter security as outlined in paragraph 5.1.3 above, an application for interim measures will be rejected and any previous injunction awarded will be cancelled.
5.1.6 The court may replace preliminary interim measures with due and sufficient counter security if such security is provided by the respondent. This frequently occurs in cases involving seizure of property, i.e. trucks, vessels etc.
5.2 Damages for unjustified interim measures
5.2.1 Article 98 of the APC provides for an opportunity for the respondent to obtain a reimbursement for damages or compensation caused by interim measures. After the court rules on the dismissal of the substantive claim, the respondent and third parties have the right to claim for a reimbursement of the damage suffered or compensation from the party that succeeded in obtaining the interim measure.
5.2.2 The amount of compensation is determined by the court and will depend on the nature of the violation and other circumstances of the case as well as reasonableness and justifiability. Thus, such compensation may range between EUR 250.00-25,000.00 for corporate disputes and EUR 25.00-25,000.00 for all other disputes.8
5.2.3 A claim for the recovery of damages or compensation should be made in the court that has been reviewing the case regarding interim measures.
5.2.4 Claims for damages or compensation may also be brought in the event that the claim was set aside without hearing the merits of the substantive case, as well as in the event of termination of the proceedings on the grounds outlined in article 150 of the APC (which are, for example: abandonment of the claim by the claimant, the parties entering into a settlement agreement, dismissal of claim due to lack of jurisdiction etc.).
6. Timing of Interim Measures
6.1 Similarities and differences when filing a request before or after the case on the substantive matter is pending
6.1.1 Apart from the requirement to file the substantive claim no later than 15 days after the preliminary interim measures have been granted, there are no other differences between a preliminary injunction and measures to secure the substantive claim. Nevertheless, certain material and procedural differences between these two types of injunctions outlined throughout this chapter are present and should be taken into consideration.
6.2 Duration of the interim measure procedure
6.2.1 An application for interim measures should be reviewed by the court no later than the next day after it is filed. Making a decision on granting/rejecting the interim measures sought may in practice take up to two weeks, and the law does not provide for any possibility of speeding up this process. Applications for interim measures are considered ex parte (on paper only). Once granted, the interim measure stays in place for the duration of the substantive proceedings.
7.1 General overview
7.1.1 Under article 333.21 of the Russian Tax Code, each application for interim measures is subject to a state duty in the amount of EUR 50.00.
7.1.2 If the applicant fails to pay the state duty when applying for interim measures, the request is suspended by the court until the state duty is duly paid.9
7.1.3 State duty is not required when an application is made for (i) counter security, (ii) cancellation of security, (iii) replacement of one measure with another or (iv) enforcement measures.
7.1.4 According to a recent ruling of the Supreme Arbitrazh Court, payments made to banks for the provision of a bank guarantee as counter security should be reimbursed by the losing party as legal fees.10
7.1.5 As a general point, even if the applicant is successful in obtaining the interim measure, its legal fees are not recoverable from the respondent.
8. Remedies Against the Decision on Interim Measures
8.1 Modification and revocation
8.1.1 A respondent may request the court substitute an imposed interim measure with an injunction of another type (e.g. to replace the arrest of equipment with an arrest of bank accounts). The court considers an application for replacement of an interim measure on the next day after its submission.
8.1.2 In accordance with article 97 of the APC, the applicant (as well as the respondent or any third parties whose rights have been violated by the interim measures awarded by the court) may also request that the court cancel the interim measures. An application for the cancellation of an injunction will be considered within five days of the date of its submission.
8.1.3 Russian law does not set out any specific reasons that may lead to the cancellation of an interim measure or its replacement. Thus, a decision to grant a release from an interim measure is at the court’s sole discretion.
8.2 Appellate remedies
8.2.1 An order of the Court of First Instance granting/rejecting an injunction may be challenged before the Court of Appeal, the Court of Cassation or the Supreme Court within one month after the relevant order is issued.11
Proceedings in the Court of Appeal
8.2.2 The approximate timescale for this stage is two to three months. In the Court of Appeal, the applicant must prove that the court either made a mistake in applying the law or made a mistake in interpreting facts and evidence.
8.2.3 A resolution of the Court of Appeal will become enforceable immediately after it is issued.
Proceedings in the Court of Cassation
8.2.4 A resolution of the Court of Appeal may be further appealed before the Court of Cassation within two months of the date of its issuance. The timescale for this stage is approximately two months. Only arguments relating to mistakes in law may be advanced at this stage.
8.2.5 A resolution of the Court of Cassation will become enforceable immediately after it is issued.
Proceedings in the Supreme Court
8.2.6 A resolution of the Court of Cassation may be appealed to the Supreme Court within three months from the day of its issuance. However, only fundamental mistakes in law may lead to the revision of court rulings at this stage.
8.2.7 Due to the specific appeal procedure in Russia, the appeal process does not always proceed in a straightforward step-by-step manner. The Court of Cassation can send the case back for reconsideration either to the Court of First Instance or the Court of Appeal. This can significantly affect the timing of the proceedings.
9. Enforcement of an Interim Measure
9.1 Enforcement of interim measures issued by national courts
9.1.1 An order of the court on securing a claim is enforced with immediate effect and a respective writ of execution is issued.
9.1.2 A writ of execution may either be placed with the bank(s) where the respondent holds its accounts, or provided to the state bailiff service in order to search a debtor’s property and seize it. If a freezing order is imposed on real estate assets, a writ of execution should also be filed with the registration authorities.
9.1.3 A failure to comply with the court order granting interim measures is punishable by a fine of EUR 2,500.00.12
9.2 Enforcement of interim measures issued by foreign courts
9.2.1 Orders of foreign state courts imposing interim measures (preliminary interim measures as well as measures to secure the substantive claim) are not subject to recognition and enforcement in Russia, as these orders are not considered to be final rulings on the merits of the case.13
10. Interim Measures in International Commercial Arbitration
If interim measures are requested in support of arbitration proceedings, the applicant should also attach a copy of the claim and the arbitration agreement (both verified by a notary public or the chairman of the tribunal).
10.1 Interim measures by state courts
10.1.1 A party to arbitral proceedings may apply to a state arbitrazh court in order to secure a claim which is subject to arbitration.
10.1.2 A state arbitrazh court considers applications for the granting of interim measures in accordance with the general rules set out in the APC. However, an application for interim measures filed by a party to arbitration must additionally be supported by:
- a copy of the statement of claim accepted by the arbitral tribunal and verified by the chairman of the arbitral tribunal or a notary public; and
- a duly verified copy of the arbitration agreement between the parties.
10.1.3 When considering an application to grant interim measures in support of the on-going arbitration, the statearbitrazh court will additionally verify (a) the validity of the arbitration agreement and (b) whether the matter in dispute may be referred to arbitration under the Russian law.
10.1.4 An application to the state courts for injunctions in support of an ongoing arbitration must fulfil the same basic criteria as set out for interim measures in article 90(2) of the APC.
10.1.5 The arbitration panel has the right to grant interim measures, however these are not binding on the parties to such arbitration. Notwithstanding any interim measures awarded by the arbitration panel, a party thereto has to apply to a state court for interim measures that would be binding and enforceable in accordance with Russian law.
10.1.6 When considering an application for interim measures brought by a party to arbitration, a state court acts in its sole discretion and with no regard to interim measures (if any) that have been awarded by an arbitration panel.
10.1.7 If a state court establishes that interim measures granted by the arbitration panel are efficient, sufficient and voluntarily fulfilled by the respondent (i.e. the grounds for awarding interim measures set out in article 90(2) of the APC are not present), the court will not grant the injunction requested.14
10.2 Interim measures by an arbitral tribunal with its seat in Russia
10.2.1 The Russian Law on International Commercial Arbitration applies to international commercial arbitration located in Russia. One such arbitration panel is the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (ICAC).
10.2.2 Under the Law on International Commercial Arbitration, an application to a state court for interim measures to secure the claim filed prior to or during the arbitration procedure (as well as the state court’s order awarding interim measures) is not contrary to an arbitration agreement.15
10.2.3 Unless otherwise agreed by the parties and subject to the request of either of the parties, the arbitration panel may require one of the parties to comply with those interim measures in respect of the subject matter of the claim, as it deems to be necessary. The arbitration panel may demand appropriate counter security from either of the parties within such interim measures.
10.2.4 However, as mentioned in paragraph 10.1.5 above, these interim measures are not obligatory, i.e. the arbitration may not force a party to an arbitration to comply with such an interim measure.
10.2.5 The Rules of the ICAC also provide certain rules in respect of interim measures (outlined below) similar to the provisions of the Law on International Commercial Arbitration.
10.3 Interim measures by arbitral tribunal with seat abroad
10.3.1 The Russian Law on International Commercial Arbitration does not provide any rules on interim measures granted by arbitral tribunals located abroad. Therefore, the only opportunity for the parties to such arbitrations to secure their rights in respect of the subject matter of the claim connected with Russia is to apply to the state arbitrazhcourts of Russia in accordance with Russian law.