Supreme arbitration court offers the business to enter into out-of-court settlements more often

The Plenum of the Supreme arbitration court (SAC) has prepared the draft decree «About conciliation procedures». This project should help the parties reach an agreement, and at the same time to «unload» arbitration courts.

The statistics of recent years testifies to underdevelopment of conciliation procedures in domestic jurisprudence. Thus, in recent years the share of out-of-court settlements is no more than 3% of the total number of cases.

The decree prepared by the SAC Plenum contains numerous statings of desirability of out-of-court settlements in order to decrease the burden on courts. However, there is no mechanism for forcing the parties to conciliation in the draft decree, as well as there is no leading role of court in the conciliation of parties. Now therefore, this procedure attaches to disputing parties, which are given the freedom to formulate the terms of the settlement agreement. The interference of the court in the conciliation process is allowed first of all for prevention of procedural abuse, for example, in those cases, when one of the parties, as a rule, the defendant, uses formal conciliation procedures for protraction of hearing of a case. In this situation the party may be fixed with court costs, that should serve as a deterrent to commission of illegal actions.

The draft decree organizes and develops approaches worked-out during the judicial practice concerning questions, arising at the conclusion of settlement agreements. The key provisions for the business are provisions regarding conciliation procedures with public authorities, in particular, tax and competition authorities. As of today the conclusion of settlement agreements in such categories of dispute occurs rarely. Suggested project prohibited the conclusion of settlement agreements, aimed at changing of tax consequences of taxpayer’s activity, in particular, application of the reduced rate, change of the principles of estimation of penalty fee, tax exemption, and others. However, the parties can come to an agreement for the recognition of expenses for the purposes of formation of the tax base, for the recognition of methods of tax optimization of a taxpayer as acceptable, and so on.

Special mention should be made of the question as to whether the parties can apply to courts again, if the previously concluded settlement agreement hasn’t solved all problems. In this regard, the draft decree of the Plenum of the Supreme Arbitration Court of the RF contains two opposite versions. Selecting one of them in the final version of the decree should have a significant impact on the judicial practice on conclusion of settlement agreements.
In summary, it should be noted that the suggested decree will be useful first al all for those participants of proceedings, who really want to make an agreement, as well as will unload arbitration courts, therefore will speed up their work.