Commercial mediation in Russia

Unless contractually agreed, there is no obligation on the parties to mediate. However, the courts may encourage parties to settle disputes through an obligatory pre-litigation procedure and during the preliminary trial hearing. The court is obliged to explain the parties’ right to mediate. A variety of different types of disputes can be submitted to mediation. Mediations are confidential. If a mediation results in settlement after a dispute has been submitted to court, the parties may request that the court affirms the agreement, giving it the force of a court ruling. If a dispute has not already been submitted to court, the settlement agreement will be enforced as a contract, although if the parties agree to notarise the agreement, it will have the power of a writ of execution.

What is the status of mediation in this jurisdiction?

The basis of mediation procedure in Russia was established by Federal Law dated 27 July 2010 No. 193-FZ “On the alternative procedure of dispute resolution with the participation of a mediator (mediation procedure)” (the “Mediation Law”), which came into force on 1 January 2011.

Mediation procedure was recently amended by several laws, including: Federal Law No. 197-FZ dated 26.07.2019, Federal Law No. 198-FZ dated 26.07.2019 and Federal Law No. 3-FCZ dated 26.07.2019. Details of the amendments are described in the analysis below.

How is a mediation conducted?

Generally, the Mediation Law establishes that disputes arising from civil matters can be submitted to mediation. At the same time, recent amendments to the Mediation Law establish that disputes arising from administrative and other public law matters, including from entrepreneurial and other economic relations, and also disputes arising from labour and family disputes, can also be submitted to mediation.

A mediation procedure is initiated and governed by an agreement to mediate concluded by the parties to a dispute. The standard mediation procedures of a particular mediation organisation may also apply where the agreement to mediate explicitly refers to those procedures. The parties may also specify in the agreement to mediate that the mediator has discretion to determine the procedure to be applied to the mediation.

Mediation may be conducted by one or several mediators, who can perform their duties on either a professional or a non-professional basis. Where the dispute has already been referred to the court or an arbitral tribunal, only professional mediators may mediate the dispute. Where the dispute has not been referred to the court or an arbitral tribunal, either professional or non-professional mediators may mediate the dispute.

A mediator may be appointed by the parties. Alternatively, the parties may also request a particular mediation organisation to recommend a mediator or to appoint a mediator. The costs of the mediation are shared between the parties unless otherwise provided by the agreement to mediate.

A successful mediation will result in the signing of a settlement agreement between all parties.

Is there any obligation on litigants to mediate?

There is no obligation to mediate a dispute. Under the Mediation Law, the existence of a mediation clause or an agreement to mediate will not prevent the parties from submitting the dispute to the court or an arbitral tribunal for consideration.

However, where the parties have provided in the mediation clause of their original agreement that they will not apply to the court or an arbitral tribunal for resolution of the dispute until they have attempted mediation, the court or an arbitral tribunal will uphold that agreement. It should also be noted that the Mediation Law provides a broad exception to this rule if “one of the parties needs, in its own opinion, to protect its rights”. It appears from the literal meaning of this exception that it may be possible for a party to avoid the mediation clause altogether and refer the dispute directly to the court or an arbitral tribunal, provided they are able to justify the need to protect their rights. Therefore, in the absence of any statutory guidance or court practice on this exception, its exact meaning is unclear.

Russian procedural legislation indicates a general mandatory pre-litigation procedure, which must take place at least 30 days before a claim is filed at a state court. The procedure generally involves submitting an official pre-litigation request to the opponent before filing the claim. Failure to comply with these provisions will lead to the court’s refusal to accept a claim for consideration.

Does the court have powers to support a mediation?

Under Russian law, mediation is considered to be the right of the parties to a dispute. Therefore, the courts are not empowered to compel parties to mediate a dispute.

At the same time, under the Russian Arbitrazh Procedure Code, the courts are entitled to encourage parties to settle disputes through the obligatory pre-litigation proceeding (see above). Also, during the preliminary trial hearing a court is obliged to explain to the parties their right to mediate a dispute. Moreover, the court may, at its own discretion, adjourn a court hearing where the parties have agreed to mediate their dispute.

Are mediations confidential?

Yes. Confidentiality is one of the main principles of the mediation procedure established by the Mediation Law. All information relating to the mediation procedure is confidential and a mediator cannot be compelled to provide such information, unless a federal law or an agreement between the parties to a dispute expressly provides otherwise. Accordingly, with the exception of criminal cases, a mediator cannot be questioned in court on information obtained during the mediation procedure.

Does failure to mediate attract adverse cost consequences?

There is no explicit provision on the costs consequences for parties who fail to mediate. However, the parties may agree the consequences in their agreement to mediate.

How are settlement agreements enforced?

If a dispute has been submitted for consideration to a court or an arbitral tribunal but an intervening mediation has successfully resulted in a settlement agreement before the court or tribunal has given its decision, the parties may request the court or tribunal to affirm the settlement agreement. A court-approved settlement agreement has the force of a court ruling. A settlement agreement approved by an arbitral tribunal is enforceable as an arbitral award.

When parties resolve a dispute by mediation without applying to a court or an arbitral tribunal, the resulting settlement agreement has the status of a contract and is enforceable accordingly. At the same time, according to the recent amendments to the Mediation Law, if the parties agreed to notarise a settlement agreement, it will have a power of a writ of execution. This means that it can be compulsorily enforced excluding the need to affirm the agreement by the court.

Is there a system of accreditation and/or regulatory body for mediators?

There are no special accreditation requirements for non-professional mediators. However, to become a professional mediator, one must complete certain supplementary training courses as required by the Mediation Law. They are organised, and diplomas are issued by, specially accredited organisations. However, according to the recent amendments to the Mediation Law, retired professional judges are now able to act as professional mediators without the need to complete training courses and obtain diplomas. The only requirement for them is to be included on the list of retired judges willing to act as mediators.

Professional mediators and mediation organisations may join self-regulating mediation organisations but this is not mandatory under Russian law. These self-regulating mediation organisations are set up primarily to supervise members of such organisations.

Proposed changes to the Mediation Law

As mentioned above, recent amendments were introduced in the Mediation Law in July 2019. Therefore, currently there are no draft laws proposing any further changes to the Mediation Law.