Russian Supreme Court clarifications on COVID-19
On 21 April 2020, the Russian Supreme Court issued clarifications addressing various issues related to COVID-19 (“Clarifications”).
Terms of performance of obligations
According to the Clarifications, the period from 30 March to 30 April 2020, which was declared to be non-working by the Decree of the Russian President, does not extend the terms of performance of obligations, including payment terms.
According to the Clarifications, the specified period from 30 March to 30 April 2020 does not suspend the limitation period.
However, the restrictive measures adopted by the authorities preventing a claimant from bringing a lawsuit before a court may suspend the limitation period.
According to the Clarifications, the consequences of the COVID-19 outbreak as well as the restrictive measures adopted by the authorities in connection with it may qualify as a force majeure based on the circumstances of a particular case only (taking into account the nature and terms of the disputed obligation as well as reasonableness and good faith of the debtor) and not as a general and universal rule applicable to all debtors.
As an exception from the previous practice, the lack of funds may be also considered a force majeure if it is caused by the restrictive measures adopted by the authorities (e.g. forced suspension of certain business activities).
If a force majeure event is proven by the debtor, the debtor shall not be liable (e.g. in the form of damages or penalty) for the breach of the obligation as a result of the force majeure. However, it will not be released from the obligation itself.
According to the Clarifications, the bankruptcy moratorium introduced by the Russian Government on 3 April 2020 with respect to certain categories of debtors (in particular, companies in the industries most affected by COVID-19) does not prohibit the commencement of ordinary court proceedings against such debtors or obtaining writs of execution against them, even though such writs of execution could be then used during enforcement proceedings only for obtaining freezing orders.
Source: Review No. 1 of Selected Issues of Court Practice Related to the Application of Legislation and Measures to Combat the Spread of the Novel Coronavirus (COVID-19) (approved by the Presidium of the Supreme Court of the Russian Federation on 21 April 2020).