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Supreme Commercial Court upheld astreinte

The failure to execute court decision may entail financial sanctions

The Supreme Commercial Court has adopted a decree “On Certain Issues of Awarding Monetary Means to Recoverer in Case of Non-Execution of Court Act”. The Decree introduces into the Russian legal practice  an analogue of the French legal institution known as astreinte (although the very term astreinte was not used in the Decree).

It is said that legislation (Art 395, Civil Code) permits accrual of interest on the amount of money awarded by a court as a sanction for the failure to execute a court act. Therefore, court may award such interest according to the Bank of Russia refinancing rate in case of the failure to execute court decision, if parties may not justify a higher amount of interest. Importantly, accrual of interest is possible also in case of non-monetary demands (for instance, if court satisfies the demand against the defendant regarding the fulfillment of certain actions or, vice versa, the abstention from actions which violate the rights of the plaintiff).  In such a case the amount of the awarded sum shall be determined by the court on the basis of principles of justice, commensurability and inadmissibility of deriving benefits from an illegitimate or unscrupulous behavior. The amount must be such as to make the execution of court act to be more beneficial for the defendant than its non-execution and the payment of the awarded sum. This awarded amount may consist in a lump sum, in a regular or even graduated payment, that is, to increase as the execution of court act is being delayed. This award may be granted both preventively at the moment of adoption of court act and afterwards, if it is revealed that the defendant does not fulfill it. 

The Decree has been devised in order to radically improve the situation as regards the execution of court decisions in the Russian legal system.