Business Disputes in Russia: FAQ

Most commercial conflicts in Russia, from unpaid invoices to fights between co-owners of a company, are heard by state arbitrazh courts. Before suing over money, a written claim letter must usually be sent to the other side, and the case can go to court only after the response period ends. The questions below cover how that process works for a foreign company or investor.

Attorney Elena Petrova advises owners and managers based in California and elsewhere who hold Russian businesses, suppliers or counterparties.

Choosing the Forum for a Commercial Claim

1. Which court hears a dispute between companies?

The arbitrazh court, as a rule at the defendant's location. A contract may set a different state court or refer disputes to arbitration.

2. Is international arbitration enforceable in Russia?

Foreign awards are recognised through the arbitrazh court under the New York Convention. Russian law also gives local courts exclusive jurisdiction over some disputes involving sanctioned persons, which can override an arbitration clause.

The Pre-Trial Claim Letter

3. Is a claim letter really mandatory?

For monetary claims between businesses, yes, unless the law or contract says otherwise. The APK RF sets a 30-day waiting period by default. A lawsuit filed without the letter is returned.

4. What should the letter contain?

The contract, the breach, the amount with a calculation, a deadline to pay and proof of delivery. Courts check that it went to the address in the state register.

Recovering Debts from Counterparties

5. How long can I wait before suing?

The general limitation period under the Civil Code is three years from the day you learned of the breach. The claim letter pauses it for the response period.

6. What if the debtor moves its assets?

Ask the court for interim measures: an asset freeze or a ban on registration actions. Courts expect evidence that enforcement is at real risk.

Conflicts Between Partners and Shareholders

7. Where are corporate disputes heard?

In the arbitrazh court at the company's registered address. This rule is exclusive and applies even to foreign shareholders.

8. Can a partner be expelled from an LLC?

Yes, through court, if the participant grossly breaches duties or makes the company's work impossible. The bar is high.

9. How do we break a deadlock?

Options include a share buyout, an exit with payment of the actual value of the share, a corporate agreement, or mediation.

Liability of Directors and Owners

10. Can a director answer personally for losses?

Yes. The company or its participants may claim losses caused by bad-faith or unreasonable acts of a manager.

11. What is subsidiary liability?

In bankruptcy, controlling persons may be ordered to pay the company's debts if their actions led to insolvency.

Collecting on a Court Judgment

12. Who enforces a judgment?

The bailiff service (FSSP) on a writ of execution. A writ can also go straight to the debtor's bank.

13. Can a Russian judgment be enforced in the USA?

There is no treaty on this. A US court decides under state law, so plan early.

Building a Litigation Strategy

14. What should I prepare first?

Contracts, correspondence, delivery and payment records, and a timeline of events. Evidence gathered early shapes the whole case.

15. Is settlement worth trying?

Often. Mediation and a court-approved settlement save time, and a settlement agreement is enforced like a judgment.

The main channel of communication with the attorney is email: attorneypetrova1@gmail.com.