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According to Andrei Mikonin, the lawyer and partner of legal firm S&K Vertikal, the court system is not suited for pacific settlement of disputes. RBC daily

5 August 2011

The Russian court system cannot be described as is ideally suited for supporting pacific settlement of disputes and protecting interests of the signatory parties to amicable agreement. Quite often, problems arise after the litigation has started. The point is that a dispute often includes several judicial proceedings in courts of different territorial jurisdiction, administrative jurisdiction and often in courts of different jurisdiction.

For instance, claims against guarantors filed with courts of general jurisdiction, claims against beneficiaries filed with foreign courts, and local actions in the arbitration court other than place of arbitration of the principal debtor etc., can be initiated simultaneously. In such case, contestants should accept the risk of discretion of all judges in all proceedings, when concluding a chain of amicable agreements. Any judge may, at his discretion, not to approve an amicable agreement by the scheduled date, and that may put the whole amicable settlement at risk of failure.

The adjective legislation lacks procedures necessary to solve this issue. For instance, it is impossible to expressly secure execution of any amicable agreement without losing momentum (of the other proceedings). None of the parties has the right to waive claim with a guarantee that proceedings shall be resumed, should the other party refuse to observe the terms of agreement. They also cannot undertake to waive further claims. Therefore, in existing conditions the fact that litigation is already initiated does not provide for a possibility to conclude an amicable agreement, even in a situation when it has profits for both sides.



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