Translated material
Arbitration collapse
The economic crisis has reached the courts
The Moscow Arbitration Court is facing a “man-made” disaster - the judges may not be able to cope with the number of cases that come before them in the hundreds every day. This conclusion follows from the speech at yesterday’s press conference by the chairman of this court, Oleg Sviridenko. According to him, the workload on judges has become a global problem, which has already gone beyond the intradepartmental one, because it concerns all citizens, companies and organizations that have to turn to the arbitration court to resolve disputes. Judges are now forced to consider as many cases per year as they previously had to deal with in two years. And the economic crisis is to blame. As a result, professionals who have worked in the system for decades leave, unable to withstand the workload, as they work nights and seven days a week. The Supreme Arbitration Court (SAC) has already submitted to the State Duma a bill on amendments to the Arbitration Procedural Code (APC), and only its speedy adoption, the judges are confident, will help solve the problem.“It’s not that we complained, like, this is how bad we feel. But the burden in the arbitration system affects all citizens, companies and organizations. This is a global problem,” Mr. Sviridenko said yesterday. -- Judges hold 30-40 meetings a day, many have already registered here. With a scientifically based caseload of 15.5 cases per month, it has already increased to 107 cases. Thus, judges turn into extras, and the court into a conveyor belt. Holding 30-40 meetings a day, judges spend 15-20 minutes on each. But the quality of justice suffers significantly from this.”
The chairman of the Moscow Arbitration Court cited several figures according to which the number of cases this year has almost doubled compared to last year. And this is due to the economic crisis. “There’s nothing else to connect with. I don’t see any other reasons,” said Mr. Sviridenko. However, the numbers speak for themselves. In 2008, 96,476 claims were filed with the Moscow Arbitration Court (78,121 cases were considered); in the three quarters of 2009, this figure increased to 130,346, and for the year as a whole it is predicted to be 175 thousand (and 140 thousand will be reviewed). Every day, 1,100 claims are submitted to arbitration, which is exactly twice as many as last year. In addition, 500 thousand additional documents were submitted this year. A separate post office was created for the arbitration court, and in the court itself there are long queues of people wishing to submit another document.
In fact, the impact of the crisis is noticeable in the nature of those cases, the number of which has increased. Thus, the number of complaints about non-fulfillment of obligations under contract, lease, and supply agreements has doubled. And disputes about non-fulfillment of insurance obligations have quadrupled. The same applies to disputes about loan repayment obligations. Against this background, administrative disputes remained at the same level, tax cases even decreased, and bankruptcy cases increased slightly.
True, in the latter case, this figure will probably change in the direction of a significant increase when the federal law “On Financial Recovery (Bankruptcy)”, developed by the Ministry of Economic Development, comes into force. “Even now, bankruptcy judges are in a very difficult situation, making 5-8 thousand orders a month. Imagine that out of 9 million Muscovites, 1 million will undergo the financial recovery procedure. This will become a very serious burden for us. Maybe there will be bankruptcy courts. Why not? Or some kind of presence. But all this requires significant financial costs,” noted the chairman of the Moscow Arbitration Court.
In order to neutralize the current situation and prevent collapse, according to Mr. Sviridenko, it is necessary to quickly adopt amendments to the APC, which were developed and already submitted to the State Duma by the Supreme Arbitration Court. We are talking, in particular, about simplifying the process in the field of appointment deadlines, consideration of cases, issuance of decisions and writs of execution. In addition, the head of the capital’s arbitration center drew attention to the fact that the draft law “On Mediation” - the pre-trial stage of dispute resolution - has remained under consideration (or rather, without consideration) by parliament for four years now.
At the same time, the Moscow Arbitration Court resolves disputes between parties located in other regions under the so-called contractual jurisdiction. (We are talking about cases when companies enter into service agreements with capital law firms, and it is naturally easier for the latter to litigate in Moscow than to go to Vladivostok, Novosibirsk or Khanty-Mansiysk.) In Moscow arbitration, such cases make up 25% of the total number , and their consideration is often delayed due to the regular failure of the parties to appear. “It is hardly possible to abolish contractual jurisdiction, but to limit it - yes. Such cases should not prevail in our court,” Mr. Sviridenko said.
Also, according to Oleg Sviridenko, it is necessary to create an institution of writ proceedings in indisputable cases, which already operates in courts of general jurisdiction. This applies, for example, to cases of loan repayment. “There are no disputes in such cases and there cannot be. Loans must be repaid, even if there are claims to the loan agreement itself, because it is appealed in a separate manner,” explained the chairman of the Moscow Arbitration Court.
The Supreme Arbitration Court, in addition, initiated an increase in the cost of justice, proposing a proportional increase in state fees depending on the amount of the dispute. This, according to the judges, will lead to the fact that the “price of the issue” will force the parties to think about whether it is really necessary to file a lawsuit.
As Mr. Sviridenko said yesterday, the federal law “On Arbitration Assessors” also requires improvements. This institute was introduced in 2001 so that when considering highly specialized disputes (for example, on the financial market, land relations, etc.), professionals in the economic and business fields would help judges understand complex issues. According to statistics, the number of cases in which arbitration assessors can be involved has increased by 65% over the last six months. The law, when applied in practice, revealed a number of significant shortcomings that eight years ago no one could have foreseen or foreseen, but which have now become a real problem.
Arbitration assessors have all the powers that judges have and participate in the consideration of cases on an equal basis with them. And they not only give advice or explanations on some highly specialized issues, but also participate in making decisions on the case by a majority vote, and their opinions may not coincide with the opinion of a professional judge. “The assessors simply deliberately do not show up for meetings and delay the processes,” Mr. Sviridenko complained. According to him, it is now impossible to replace a “truant” assessor: “For example, the Mosmart company filed 100 lawsuits and nominated two assessors in all its cases. It is clear that they will not be able to participate in all of them at the same time.”
A way out of this situation has already been proposed by the Supreme Court - to introduce an amendment to the law that would allow replacing an absent arbitration assessor with another, as would happen in the event of a professional judge’s failure to appear. “But the institution of arbitration assessors itself is not bad. It shows that the judicial system is open and accessible, including for control by the public,” said the chairman of the capital’s arbitration court.
So far, the State Duma has not considered any of the proposals initiated by the Supreme Arbitration Court, but, as Mr. Sviridenko noted yesterday, their adoption would allow judges to abandon the role of extras, which they have become recently, and return to the qualitative study and resolution of complex disputes.