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. Last Updated: 07/27/2016

Judges Seek Order in The Courts

The Supreme Court plenum is expected to pass a resolution next week aimed at cutting down frivolous lawsuits by ordering civil courts to only accept lawsuits against companies registered in their region, Vedomosti reported Thursday.

The current practice allows individuals to sue in civil courts in any region, opening the door to lawsuits by single investors against multinational companies that have led to company assets being frozen.

Under the planned rules, a Moscow-based shareholder in Surgutneftegaz, for example, who wants to sue the oil producer would have to travel 2,300 kilometers to the remote Siberian town of Surgut where the company is registered.

"That would, of course, be bad for shareholders, but it would be good for corporations," said a lawyer who asked to remain anonymous. "Under the existing practice where 10,000 shareholders in a big company could simultaneously file suits in, say, 30 regions, the company would simply go bankrupt because of expenses on lawyers," he said.

The Supreme Court plenum is also expected to forbid civil courts from freezing the assets of companies during the investigation stage, Vedomosti said. That decision could only be made after the case goes to court. Only arbitration courts will be able to make the decision.

However, the plenum will not be able to completely enact the new resolution until the Civil Procedural Code is implemented. Article 25 of the code states that civil courts may rule on civil, household and employment disputes provided one of the parties is an individual.

Also, parliament must first pass the new Arbitration Procedural Code, which transfers all business-related disputes from civil courts to the jurisdiction of the state arbitration courts.