Contract Disputes in Russia: FAQ

Most contract disputes with a Russian counterparty are resolved under the Civil Code of the Russian Federation. Business disputes go to arbitrazh (commercial) courts, and disputes involving individuals go to courts of general jurisdiction. Before suing, the claimant usually has to send a written claim and wait thirty days. Attorney Elena Petrova answers the questions foreign companies ask when a Russian deal goes wrong.

Proving a Breach

What counts as a breach?

Any failure to perform on time, in full or at the agreed quality. The creditor proves the breach, and the debtor proves that it is not at fault or that force majeure applied.

What evidence carries weight?

The signed contract, acceptance certificates, invoices, payment orders and business correspondence. Emails are accepted if the contract names the addresses or the exchange is otherwise authenticated.

Pre-Trial Claim Procedure

Is a pre-trial claim mandatory?

For monetary claims between businesses, yes. The Arbitrazh Procedure Code requires a written claim and a thirty-day wait unless the contract sets another period.

What should the claim contain?

The contract details, a description of the breach, the amount demanded with a calculation, and a deadline for payment. It should be sent by a method that proves delivery.

Damages, Penalties and Interest

Can a court reduce the penalty?

Yes. If the penalty is clearly out of proportion to the consequences, the court may lower it. For businesses, this requires a motion from the debtor.

Can I recover both a penalty and damages?

As a rule, damages are recovered in the part not covered by the penalty, unless the contract says otherwise.

Ending the Contract

When can a party terminate unilaterally?

When the contract or the law allows it, or by a court decision in case of a material breach. The notice of withdrawal should be delivered in writing.

What happens to advance payments?

Money paid for unperformed obligations must be returned. Otherwise it is recovered as unjust enrichment with interest.

Do sanctions excuse non-performance?

Not automatically. The party relying on sanctions must show that they made performance impossible and could not be overcome by reasonable steps.

Choosing the Court

Is foreign law or a foreign court clause valid?

Parties to an international contract may choose the governing law and forum. Russian courts may still hear the case if the defendant or its assets are in Russia.

How long do proceedings take?

Arbitrazh courts are meant to decide a case within a few months, with appeal and cassation following. Complex disputes with expert reports take longer.

Time Limits and Enforcement

What is the limitation period?

Three years from the day the claimant learned or should have learned of the breach.

How is a judgment enforced?

The court issues a writ of execution. It goes to the bailiffs or directly to the debtor's bank, which debits the account.

Can a foreign judgment be enforced in Russia?

Only if there is a treaty or the court applies reciprocity. International commercial arbitration awards are recognised under the New York Convention.

Starting a Case From Abroad

What should I send first?

The contract, correspondence and payment records. We assess the claim, send the pre-trial demand and file the suit under a notarised and apostilled power of attorney.

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