Skip to main content

CIArb News

Principle of estoppel as a new concept in Russian legislation

5 May 2017 Features
By Diana Filatova, ACIArb
 he principle of estoppel was created by the English Common law system and then eventually became recognised under international law. The principle of estoppel should be understood as the principle of good faith, consisting of  precluding the party from raising a challenge or asserting a particular claim which contradicts that party’s previous position or statement.

 

The main purpose of this principle is to protect good-faith parties from unexpected claims of counterparties, who despite the reached agreements can raise their objections and make new demands.

 

The English word “estoppel” was used for the first time by the Presidium of the Supreme Arbitration Court of the Russian Federation in the decision 22.03.2011 N 13903/10.

 

Furthermore, the Presidium of the Supreme Arbitration Court of the Russian Federation expressly approved the principle of estoppel in a decision of 24.06.2014 N 1332/14. In this case, a party raised a challenge on the ground that it was not given proper notification of the arbitration and, consequently, it was not able to present its case. The challenge was dismissed by the court and reasoned that the party had waived its right to make a challenge because it raised this only at the stage of challenging the arbitral award and not earlier in the arbitration proceedings.

 

The new edition of the Civil Code of the Russian Federation with amendments from 2012 and 2015, legislatively established the concepts of “abuse of law”, which refers to the unfair implementation of civil rights (the basic articles are art.1.3 and art.10).

 

Furthermore, the principle of estoppel can also be found in article 432 of the Civil Code. The new edition of article 432 of the Civil Code provides a rule, according to which, a party challenging a deal cannot refer to circumstances it was aware of at the time when it wilfully consented to it.

 

Thus, the new edition of the Civil Code legislatively approved the notion of “abuse of the law”, which refers to the unfair implementation of civil rights. In the legal system of Russia, the new estoppel principle is introduced as a new method of judicial protection from abusing rights of the other party. The scope of the estoppel principle is quite extensive. It is used not only in substantive law but also in procedural law. The principle estoppel is an effective remedy which allows the rejecting of “unfair” claims without a consideration of their merits.

 

In conclusion, the official establishment of the principle of estoppel in Russian law represents a crucial development, allowing relations between parties to develop order and predictability. This principle guarantees legal security, observance of rights and interests of any contracting parties and legal entities. The introduction and implementation of estoppel in Russian legislation will contribute positively to Russian arbitration and litigation proceedings becoming more internationally-friendly.