On 4 July 2014 the Rossiyskaya Gazeta (Russian Gazette) published the Federal Law No.186-FZ dated 28.06.2014 which enacts material amendments to the Arbitrazh Procedural Code of the Russian Federation (the RF APC), aimed at formalising the dispute consideration mechanism in the context of the reformed court system. The amendments shall take effect from 6 August 2014.
1. Procedure for cassation and supervision proceedings
The substance of the reform and the amendments to the RF APC come down to the Supreme Court of the Russian Federation (the RF SC) becoming the only supreme judicial body with jurisdiction over civil, criminal, administrative and other types of cases, as well as economic disputes. The Higher Arbitrazh Court of the Russian Federation (the RF HAC) will cease to exist. The earlier Federal Constitutional Law No. 3-FKZ dated 05.02.2014 “On the Supreme Court of the Russian Federation” changed the structure of the RF SC and, inter alia, the Judicial Panel for Economic Disputes was formed for these purposes.
Under the amendments to the RF APC, as of 06.08.2014 the procedure for cassation and supervision proceedings in relation to arbitration cases brought before the RF SC, the competence of the RF SC Presidium as well as the authorities vested in the RF SC Chairman and his deputies, will be changed.
Proceedings before the cassation court
The amendments to the RF APC provide that there is now a “second cassation instance” in the case consideration procedure.
Court orders of arbitration courts which were appealed to the cassation instance and court orders of the cassation instance itself, may now be appealed to the RF SC Judicial Panel in accordance with the rules established for cassation proceedings. In other words, after a case has been considered by the circuit arbitration court (the “first cassation instance”), the parties shall be entitled to file an appeal with the RF SC Judicial Panel (the “second cassation instance”).
The timeline for filing an appeal is two months from the day on which the last appealed court order became effective.
Incoming cassation appeals shall undergo preliminary examination by a RF SC judge within two months, or, if the case was evoked, within three months of the date on which the appeal reached the RF SC. Based on the results of this preliminary examination, the judge shall issue a ruling on whether or not the appeal should be considered in a full court hearing of the RF SC Judicial Panel, or whether such referral should be denied. In the latter case, the RF SC Chairman or his deputy may disagree with the ruling issued by the RF SC judge, and may issue a ruling to reverse the same and refer the cassation appeal to the RF SC Judicial Panel for consideration.
Cassation appeals are to be considered in a court hearing of the RF SC Judicial Panel within two months of the date of issue of the ruling referring such appeals to the RF SC Judicial Panel. The powers of the “second cassation instance”, following consideration of the appeal, are similar to those presently vested in the circuit arbitration courts when considering cases as the cassation instance.
However, in contrast to present grounds for reversing or changing decisions made in cassation proceedings, the RF SC Judicial Panel will be able to reverse or change the court order of a lower instance court only if there have been material violations of the substantive and/or procedural law rules, which impacted the outcome of the proceedings and where, without those violations being rectified, it is impossible to restore and protect violated rights, freedoms and legitimate interests in entrepreneurial and other business activities, as well as public interests safeguarded by the law.
Proceedings related to the supervisory review of court orders
Rulings issued by the RF SC Judicial Panel in cassation proceedings may be appealed to the RF SC Presidium via the supervision procedure. On a literal interpretation of the legal provisions, only a ruling which is issued by the RF SC Judicial Panel on the merits of a dispute may be appealed to the FR SC Presidium. Rulings denying referral of a case for consideration by the RF SC Judicial Panel issued by the RF SC judge following the “second cassation appeal” may not, in accordance with the standard procedure, be appealled to the RF SC Presidium. There is an exception, where an application by interested parties is filed with the RF SC Chairman or his deputy, who have discretionary powers vested in them. The RF SC Chairman or his deputy are able to request the RF SC Presidium to review of court resolutions, pursuant to the supervision procedure, in order to rectify fundamental violations of rules of law, which have impacted the legitimacy of the resolutions being appealed and have therefore deprived the parties in dispute of the opportunity to exercise rights guaranteed by the RF APC, or have significantly limited such opportunity.
The supervisory appeal is to be examined on a preliminary basis by a RF SC judge (rather than three judges, as is current practice) who shall decide whether or not there are any grounds for the appeal to be referred for consideration in a court session of the RF SC Presidium. If the RF SC judge issues a ruling to deny referral of the supervisory appeal to the RF SC Presidium, the RF SC Chairman or his deputy may disagree with the ruling issued by the judge, reverse the same and refer the appeal, together with the case, for consideration in a court session of the RF SC Presidium.
In other respects, the consideration procedure in respect of supervisory appeals, as well as the grounds to reverse or change decisions made in the course of the supervision procedure, have not undergone any changes.
Therefore, the amendments made to the RF APC have resulted in:
- increased timelines for possible court proceedings due to the introduction of a new additional stage. At the same time, taking into account the two-stage system for considering an appeal by the RF SC Judicial Panel, this second stage is in its substance aimed at replacing the current supervisory instance and reducing the number of cases which may be referred to the RF SC Presidium;
- enhanced subjectivity with respect to considering cases, due to (а) the preliminary individual examination of appeals and (b) the discretionary powers vested in the RF SC Chairman and his deputies.
2. Transitional provisions
In order to ensure the legal succession and continuous consideration of cases, the law amending the RF APC has formalised the transitional provisions determining the future of applications pending before the RF HAC at 06.08.2014 (the date of enactment).
In accordance with these provisions, applications for supervisory review of court orders that would otherwise have been filed with the RF HAC, and in relation to which no ruling to refer the case to the RF HAC Presidium had been issued as at 06.08.2014, shall be referred to the RF SC Judicial Panel for consideration in accordance with the rules of the “second” cassation proceedings.
Cases, in respect of which rulings to refer the same to the RF HAC Presidium had been issued, will be referred to the RF SC Presidium for consideration pursuant to the supervision procedure.
3. Clarifications as to issues of judicial practice
Issues that have raised concerns in connection with the reorganisation of the judicial system include, inter alia, the destiny of clarifications given by the RF HAC in respect of certain practice issues. The amendments to the RF APC confirm that clarifications published by the RF HAC in respect of issues pertaining to judicial practice and resolutions passed by the RF HAC Presidium will remain effective until the RF SC Plenum and the RF SC Presidium adopt corresponding orders in relation to those issues.
4. RF HAC’s electronic database
One of the undisputed advantages of arbitration is its transparency, which is safeguarded by the “E-filing” system, including its module “Arbitration Case Directory”(ACD). However, in the context of the judicial reform, it is proposed to integrate the ACD with SAS (State Automated System) “Justice” (electronic database of the courts of law). The quality of the latter leaves much to be desired.
The form of and procedure for this integration are still unknown. What is more, judging from commentary, the ACD will probably form part of SAS “Justice” “as a separate component” so as to preserve its structure. It is assumed that one will be able to access the library from the official web- site of SAS “Justice”.