Interim measures in Russian courts in support of international arbitration: principles, procedure and the range of remedies available BRLA seminar 25 January 2010

2 Institution of interim remedies in support of arbitration proceedings  New institution introduced by the 2002 Arbitrazh Procedure Code (APC):  Art.90, clause 3: “Under part 2 of this article, and in accordance with the rules of this chapter, the arbitrazh court for the location of the arbitration tribunal, or for the location or residence of the debtor, or for the location of the debtor’s property may take interim remedies upon the petition of a party in arbitral proceedings”.  General requirements with regard to the content of the petition for interim remedies in support of international arbitration do not differ from those in support of Russian litigation.  Interim remedies are permitted at any stage of the proceedings

3 Arbitrazh courts’ acceptance of petitions for interim measures  A petition for interim measures must meet the requirements set forth in the APC. Breach of these requirements is grounds for deferment of the petition’s acceptance under the rules of article 128 of the APC.  Petition requirements:  In writing  Signed by an authorized person  Must contain the necessary details and information : - name of the arbitrazh court, - name of the claimant and respondent and their details, - subject of dispute, - amount of the claim, - justified grounds for the petition (the need to take interim measures), - the requested interim measure, - list of attached documents.  Payment of the state fee of 1000 rubles for submission of the petition

4 Arbitrazh courts’ acceptance of petitions for interim measures: attached documents  Pursuant to the APC, the applicant must attach a “copy of the statement of case” to the petition to secure the claim. Taking into account an analysis of the norms of international law that regulate issues of arbitration proceedings, ‘statement of case’ in part 5, article 92 of the APC should be understood in the widest sense, as a written procedural document whose submission begins the arbitral proceedings in a specific arbitral tribunal.  As required by the APC (part 5, article 92) a “copy of the statement of case accepted for examination by the arbitral tribunal and certified by the chair of the permanent arbitral tribunal” or a “notarized copy of such statement” must be attached to the petition to secure the claim. If the international commercial arbitration procedure stipulates two stages for submission of claims in the case (the request for arbitration and the statement of case), it is recommended that the first document include a detailed description of the essence of the claims in the case, as well as their amount.  The statement of case may be submitted to a Russian court without additional attachments if the attached documents are not relevant to the issues before the Russian court.

5 Satisfaction of a petition for interim measures  Interim measures are implemented on the condition that they are justified.  Interim measures may be taken:  if not taking interim measures would hinder or make impossible the enforcement of a judicial act;  for the purpose of avoiding significant losses for the applicant.  A petition is deemed justified if there is evidence confirming at least one of the above conditions  A petition to secure the claim is examined by the court no later than the day after a petition is received by the court, without the parties being notified of such. Thus the applicant has no opportunity to give oral explanations with regard to the content and form of the documents attached to the petition. Therefore the applicant must submit as much evidence as it can to justify a petition.  Interim measures must be proportionate (balanced) with the filed claim

6 Satisfaction of a petition for interim measures: cont’d  If the applicant presents “counter-security”, the court cannot refuse to satisfy a petition for interim measures  The applicant provides “counter-security”, which is done to maintain the balance of interests between the parties. This is possible upon an application from the debtor or at the court's initiative. A failure by the applicant to provide “counter-security” is a ground for refusing to implement interim measures.

7 Choosing a specific interim measure: the list  A list of interim measures is established by article 91 of the APC; among them are:  Attaching monetary funds (including monetary funds that are credited to the bank account at a later date) or other property belonging to the respondent and in its possession or in the possession of another entity;  Prohibiting the respondent and other entities from performing certain actions related to the subject of the dispute;  Obliging the respondent to perform certain actions in order to prevent ruin or deterioration of the disputed property;  Transfer of the disputed property to the care of the claimant or other entity;  Suspension of recovery under a writ of execution or other document, under which recovery is not subject to consent, which is being challenged by the claimant;  Suspension of the sale of property in the event of submission of a suit to release attached property;  Other measures established in federal law or RF international treaties.

8 What happens once measures are granted  A court ruling on the adoption of interim measures is subject to immediate implementation.  A writ of execution is issued on the basis of the ruling to adopt interim measures.  The applicant may seek enforcement of the ruling from the respective subdivision of the Federal Service of Court Bailiffs or directly from the authority empowered to implement interim measures  Replacing one interim measure with a different interim measure is permitted upon a petition from the applicant or the debtor

9 Effective period of interim measures  Interim measures are effective from the moment the respective ruling is made until:  The actual execution of the judicial act that resulted from the consideration of the case on its merits, if the claim was satisfied;  The entrance into force of a judicial act on refusal to satisfy the claim, on leaving the claim without consideration, or on termination of proceedings in the case. Upon a petition from an entity participating in the case, the court may hand down a ruling repealing the interim measures;  Repeal of the interim measures upon a petition from an entity participating in the case, if the entity submits the respective petition to the court and the court finds it grounded.

10 Experience  Recent experience:  We are aware of only two or three cases in which Russian courts have granted interim measures in support of ongoing international arbitration  Salans experience:  There have been several rulings from the Moscow appeal court, and also from the Arbitrazh court for the Moscow Oblast.  The measures taken by the Moscow appeal court have been repealed by the cassation court in Moscow but not per se: in that particular case, the arbitrazh court denied its jurisdiction over the matter on the basis that the Russian courts of general jurisdiction rather than arbitrazh (commercial) courts are competent to consider the matter due to the fact that the debtor in that case was a citizen.

11 Contact Information Anna Zhukova Associate for OOO Salans, St. Petersburg Tel: Fax: