Dimitry Afanasiev, member of the General Council of Delovaya Rossiya and Chairman of Egorov Puginsky Afanasiev & Partners, called for a number of measures designed to improve Russian law’s competitiveness to be introduced during the Delovaya Rossiya Forum held in Moscow. The proposal was supported by the Forum’s participants and by Boris Titov, Chairman of Delovaya Rossiya. The event was attended by over 1000 people.
Within the framework of the Forum, Dimitry Afanasiev spoke at the plenary meeting and presented an action program to improve the competitiveness of Russian law, describing what steps need to be taken so that national business could comfortably exist within Russian jurisdiction.
The proposed program is based on the research results conducted by Egorov Puginsky Afanasiev & Partners Law Firm in the spring of 2012 and dedicated to the analysis of Russian law’s demand at support for activities of Russian companies.
According to the survey conducted by corporate lawyers, the vast majority of Russian companies do not trust Russian courts and are willing to subordinate the Russian law no more than 10% of significant transactions’ activities. The Russian entities actively use foreign (mainly English) law for complex structuring and important economic transactions’ activities (mergers and acquisitions, finance projects, joint ventures, debt restructuring, etc.), and such transactions’ disputes are often passed on review of Russia’s Arbitrazh courts or courts of foreign states.
The survey showed that among the main causes of low demand for Russian law are the following - too prescriptive approach of the Russian civil law, and related to this high-risk transactions void of recognition, lack of opportunity for effective agreement implementation, as well as effective parties’ protection in the case of their violation.
To solve the problems the following indicated measures have been proposed: First of all, discretionary principle of contract and corporate law should be enshrined in legislation. Secondly, it was proposed to give a clear signal to the judiciary system of the need to trust business choice and to scrutinize parties’ intentions under the contract, rather than to accept the contract null and void if it does not fit the strict Civil Code’s canon, thus rising to the side of dishonest transaction’s participant who wants to evade obligations’ performance under the contract. Thirdly, an effective measure will create a powerful and modern arbitration (Arbitrazh) Institute, which specializes in Russian law application and is aimed at solving disputes, in cases involving foreign companies, and disputes between Russian companies.
The voiced measures by Dimitry Afanasiev were supported by plenary meeting participants of the Forum and by its moderator, Boris Titov, Chairman of Delovaya Rossiya.