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Pepeliaev Group Requests Ruling on Court Cost Recovery from Russian Constitutional Court

The Pepeliaev Group has, acting on behalf of Shell, filed a claim with the Russian Constitutional Court challenging article 110(2) of the Russian Commercial Procedure Code, which — the Pepeliaev Group claims — "does not allow a reasonable amount of court costs to be determined objectively."

According to the Pepeliaev Group, grounds for applying to the Constitutional Court arose when the Moscow State Commercial Court "twice substantially reduced the amount of court costs for which recovery was claimed”, first setting the "reasonable amount" at RUB 70,000 and then at RUB 150,000. In fact, according to a press release by the Pepeliaev Group, Shell’s actual expenses for its legal representation in the litigation came to RUB 2.75 million.

In making its decision, the Moscow State Commercial Court ignored Shell’s representations that its selection of legal adviser was reasonable, that the fees of the selected lawyers were at the market rate, and that such lawyers were highly reliable, experienced, and reputable.

According to the Pepeliaev Group, “the practice of substantially reducing the amount of court costs claimed for recovery is particularly widespread. It is especially frequently encountered in court disputes to which tax authorities are a party. Courts protect tax authorities’ financial interests, believing that they are serving the wider public interest by doing so."

However, the firm argues on behalf of Shell, that, "when contentious rules of the Commercial Procedure Code are arbitrarily applied, this contravenes article 19(1) of the Russian Constitution (‘all persons are equal before the law and a court’).” The firm also argued that, “in addition, the following constitutional rights of the applicant are infringed: the right to private property (article 35(1)); the right to receive qualified legal assistance (article 48(1)); and the right to be fully compensated for harm caused by the actions of state authorities (article 53)."

Finally, the Pepeliaev Group published the text of its appeal on the firm’s website, which, it reports, "will enable the business and legal communities to be informed about the essence of the problem that has arisen,” and "will also allow all interested parties to send the court letters of support as ‘friends of the court,’ expressing their own position concerning the need for this application to be examined. By doing so, they will facilitate the formation of a constitutional law position on the procedure for determining the reasonable limits within which court costs may be recovered."

Last modified onThursday, 31 March 2016 08:55
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