Changes in the Civil Code of The Russian Federation – part I

07.10.2013

Review of Russian civil legislation touched on rules of private international law. The Federal Law dd 30.09.2013 N 260- ФЗ "On Amendments to the third part of the Civil Code of the Russian Federation" will enter into force on the 1 day of November 2013. It is should be said that the section VI in a less degree will be subjected to changes than the rules of other sections of the Civil Code.

Besides the changes regarding the provisions on the effect of especially significant mandatory regulations, and the changes on applicable law to rights in rem, it is important to pay careful attention to the issue of member’s liability of legal entities for the debts of the company.

The main connecting factor in the member’s and founder’s responsibility issue will be the personal law of the legal entity. Another situation with the foreign legal entity which will carry its business in the Russian Federation. In this case with the requirements of liability for the obligations of the legal entity (to its founders (participants), other persons who are entitled to give binding instructions or otherwise have the opportunity to determine its activity) will apply Russian law or by the creditor's choice - the personal law of this legal entity.

Based on: http://www.consultant.ru/document/cons_doc_LAW_152471/

Expert’s opinion

Of course, during such massive and considerable changes in substantive regulation of the civil legislation it is very important to keep the balance and the harmony substantive rules and conflict rules.

In accordance with the article 1202 of the Civil Code the questions of founder’s and member’s responsibility are solved on the basis of the personal law of the legal entity (the law of the country of incorporation of legal entity).

In the conclusion we can summarize that the new edition provides an exception to this rule, and now, it will be possible at the choice of the creditor to use either the Russian law or the personal law of the legal entity to the liability requirements for the obligations of a legal entity (with the business in the Russian Federation).

In whole, to evaluate the future changes in section VI of the Civil Code, we can say that there will be an expansion of relations governed by new conflict rules. It is delighted that the legislature makes the provisions of Civil Code more detailed, and waives a conflict criteria of "close connection", because the application of this rule sometimes leads to unpredictable results.

Shevchenko Anna ( Paralegal of Legal Services and Bank Consulting Department of Honest&Bright company)