Russian lawyers are resigning themselves to the fact that the country will lose its commercial court, with future cases to be determined in 10 regional courts, the Gazette has learned.
The news comes as EU and US companies rush to review contracts and assess the risk of their business exposure in the country in the light of retaliatory sanctions, in place or planned, by the Russian government over the Crimea crisis.
The commercially focused Supreme Arbitrazh Court’s merger with the Russian Supreme Court already concerned lawyers advising clients with Russian business interests.
The court merger is delayed until the autumn, but it is understood that criminal and civil judges, and cases, will dominate the new court, pushing commercial cases down to the courts of cassation. The Supreme Arbitrazh Court (pictured) is now excluded from the Russian constitution and federal law.
Tatiana Menshenina, of counsel at international firm Simmons & Simmons, told the Gazette: ‘Some lawyers still hope that [judgments] of the Supreme Arbitrazh Court will have weight in the interim period, but most believe the cassation courts will each build their own jurisprudence.’
The Supreme Arbitrazh Court’s judgments had guided the lower courts, and reliably upheld foreign arbitrations and London commercial court judgments. Now, even in a ‘best case’ scenario, the court’s judgments in the run-up to merger will not carry the same force.
The significance of the change is magnified by a government drive to divert the incorporation of Russian businesses away from offshore jurisdictions such as the British Virgin Islands and Cyprus.