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Experts of Baker Tilly inform you that on April 21, 2020, in connection with the issues raised by the courts, the Presidium of the Supreme Court approved the "Review of Certain Issues of Judicial Practice Related to the Application of Legislation on COVID-19 No. 1 dated April 21, 2020 ". (hereinafter referred to as the Review).

The review is carried out in the form of FAQ (Frequently Asked Questions).

The document contains answers to 26 questions on the application of procedural law, provisions of civil and criminal legislation, legislation on administrative violations and bankruptcy in terms of interpretation of the new rules.

Information source: web site of Russian Federation Supreme Court (https://www.vsrf.ru/appeals/)

Document review

The Review explains the procedure for calculating and restoring procedural and limitation periods, the issues of performance of obligations, recognition of epidemiological situation and restrictive measures by force majeure circumstances, the grounds for changing or terminating obligations, the use of new elements of crimes and administrative violations, and other issues.

In particular, it was explained that self-isolation and non-working days may not always be a valid reason for missing civil obligations and statute of limitations. Exceptions are force majeure circumstances, though restrictive measures will not automatically be recognize as force majeure, but individually in each case. In this connection, the Russian Federation Supreme Court has specified:

•non-working days in the period from March 30 to April 30, 2020 shall be included in the procedural terms and shall not serve as a ground to postpone the day of expiry of procedural terms to the working day following them. Non-working days are among the measures established to ensure the sanitary-epidemiological well-being of the population aimed at preventing the spread of a new coronavirus infection, and may not be considered as non-working days in the sense attached to this concept of the Russian Civil Code, which specifies weekends and non-working holidays provided for in articles 111 and 112 of the Labour Code. Otherwise it would mean suspension of all civil obligations without exception for a long period of time and significant limitation of civil turnover as a whole, which does not meet the objectives of the above Presidential Decrees;
•if in conditions of a new coronavirus infection circumstances distribution of insuperable force under rules of clause 3 of article 401 of the Russian Federation Civil code are established, it is necessary to consider that occurrence of such circumstances in itself does not stop the obligation of the debtor if execution remains possible after they have fallen off. 

Please note that item 7 of the Review concerns the resolution of the question whether an epidemiological situation, restrictive measures or a regime of self-isolation may be recognized as force majeure? The High Court clarifies:

"...in order for a circumstance to be recognized as a force majeure, it must be extraordinary, unavoidable under the given conditions and external to the debtor's activity ..."

The Supreme Court of the Russian Federation agreed that the epidemiological situation, restrictive measures, and the regime of self-isolation may be and are considered to be circumstances of insuperable force.

However, the Review makes one important observation: "Recognizing the spread of a new coronavirus infection as a force majeure cannot be universal for all categories of debtors".

In order to avoid liability, the debtor must prove, by responding to the creditor's claims:

а) the existence and duration of force majeure circumstances; 

b) the existence of a causal link between the occurrence of force majeure circumstances and the inability or delay in performing obligations; 

c) non-involvement of the party in the creation of force majeure circumstances; 

d) the party takes reasonable expected measures in good faith to prevent (minimize) possible risks

The Review has been sent to the lower courts.

Currently, preparation of clarifications on other issues that should be submitted to the Presidium of the Russian Federation Supreme Court is ongoing.