Thursday, 2 February 2017

Mandatory complaints

From the 1st of July 2016 the amended Arbitrage Code has mandatorily prescribed to send a complaint to a counterpart prior to sue, in order to diminish the sheer number of cases that have to be ruled by court.

In the previous year roughly 1,5 million cases went through the arbitrage courts and three fourth of them were disputes on property or contracts. Moreover, in about 60 % of these cases the claim value were less than $10 000, that means they were relatively cheap and simple. To ease this burden on the judges the Parliament put additional impediment on a potential plaintiff that is a mandatory complaint.
According to the new version of the art. 5 of the Russian Arbitrage Code a complaint is required to be send 30 day before bringing a suit to an Arbitrage court, unless otherwise provided in the contract, with just few exceptions.
Some remarks should be made in order to explain the rule.
First of all, as the Civil Procedure Code was not amended, ordinary people still can litigate without any compulsory pretensions, the scope of the law being restricted by legal entities. Then, the parties to the contract can change the length of the complaint period and set, for example, a fortnight for the document to be answered, but they may not avoid this procedure by mutual agreement. The law means that sending a complaint save a statute of limitation according to art. 202 (3) of the Russian Civil Code. The mentioned exceptions are mainly the bankruptcy cases, corporate disputes and trademark infringements, as well as some others of less significance.
Unfortunately in Russia e-mails are still argued to substitute written documents as a proof unless they are send in the address stated in the contract. So it’s worth thinking about changing all the contract forms to include it there, otherwise the complaint will have to be send by post which is more expensive and long while much less secure.