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4. Rational Dispute Resolution
4.1 Rule of Law
4.2 Enforcement of Contracts
4.3 Commercial Dispute Resolution
In-Country Assessment Information

 

4. Rational Dispute Resolution – Strong

Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default

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4.1 Rule of Law

 

Core Question: Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime? No – Weak, Russia exhibits a significant implementation gap, meaning that many laws on the books are poorly enforced.

 

Impartiality

4.1.1   What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Weak – Percentile Ranking –  25.4 Trend

Source: Governance Matters  2011, World Bank, www.govindicators.org

Judiciary

4.1.2   Can members of the judiciary be held accountable for their actions? Yes– Score 89 out of 100 – Strong

 Source: Global Integrity Report 2010 www.globalintegrity.org/report/Russian-Federation/2010   

 

Costs of Crime

4.1.3   What are the business costs of crime and violence? High Costs – Ranking  90th out of  144 – Score  4.5 out of 7, Weak

Source: The Global Competitiveness Report  2012-2013, World Economic Forum
www.weforum.org/issues/global-competitiveness

 

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4.2 Enforcement of Contracts

 

Core Question: Are systems in place for timely and efficient enforcement of contracts?
Commercial – Yes – Strong, enforcing contracts is not difficult for market participants. This is due to the clear procedures set forth in the Commercial Procedure Code for courts to use in applying the law.

 

4.2.1 – Judicial Enforcement

Commercial – Very Strong – Ranking  11st out of 183 Trend ­

4.2.1.1  What is the number of procedures involved in resolving a commercial dispute? 36

4.2.1.2  What is the time between the filing of a lawsuit and resolution in judicial enforcements?  270 days

4.2.1.3  What is the cost of judicial enforcements as a percentage of debt value? 13.4%

Source: Doing Business  2013www.doingbusiness.org/data/exploreeconomies/russia

 

4.2.2 – Summary Proceedings

SQ 10  Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders? Available – but not widely used in property disputes – Weak

SQ 11  What is the cost of summary proceeding if available to lenders as a percentage of property value? Unknown

 

4.2.3 – Power-of-Sale

SQ 12  Power-of-sale agreements give creditors the power to sell properties after notice to the borrower without court intervention. What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders? Unknown

SQ 13  What is the cost of power-of-sale agreements if available to lenders as a percentage of property value? Unknown

Source – The Chamber of Commerce and Industry of the Saratov Province

 

 

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4.3 Commercial Dispute Resoluiton

 

Core Question: Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay? Yes – Strong, parties have the option of resolving disputes in official Commercial Courts or through commercial arbitration.

 

Survey Questions

Commercial Courts

SQ 14  Do specialized commercial courts exist for the handling of property disputes and foreclosures? Yes – Strong, Arbitration/Commercial Courts are under the supervision of the Supreme Arbitration Court of the Russian Federation.

Source: www.arbitr.ru/eng

 

Alternative Dispute Resolution

SQ 15  Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes? Yes – Strong, the system includes Arbitration Panels and Mediation. Arbitration is steadily growing, but its use in property disputes is significantly curtailed by de facto restrictions.

Source: The Chamber of Commerce and Industry of the Saratov Province

 

Commercial Treaties

SQ 16  What bilateral, regional and international commercial treaties exist concerning business between countries? Weak – Russia is in the process of negotiating terms of accession to the World Trade Organization.
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In-Country Assessment Information (as of February 2012)

FQ 18 To what extent do small businesses trust public institutions to support contract enforcement?

Crime is steadily decreasing in Russia today, which is having a favorable effect on the flow of investment. Updating laws in a timely manner remains a problem in the protection of real property rights. In recent years, the process of resolving disputes over real property has become more transparent and effective. Reforms have increased transparency in the court system. Judicial reforms are still being implemented today. The process of resolving disputes through the Commercial Courts is operating properly. This process is well-regulated by the law and not difficult to use.

However, under current law, judges are liable under general liability that applies to everyone, despite the crucial role of judges in the application of the law. There are no laws specifically addressing the liability of judges.

In 2010, the Federal Law entitled Alternative Dispute Resolution through a Mediator (Mediation Procedure) was enacted. This law allows parties to use alternative (non-judicial) dispute resolution procedures. As reforms are implemented and the use of alternative procedures grows rapidly, it can be said that dispute resolution is on a sustainable path of development. The simplified court procedures do not apply to property disputes involving real estate. Non-judicial foreclosure procedures are not yet sufficiently regulated, but this is due to the fact that these procedures became available relatively recently.

Source: The Chamber of Commerce and Industry of the Saratov Province 

 

 

 

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