Legal representation in connection with coronavirus disease 2019 (COVID-19)
Legal services (legal assistance) on legal representation in connection with coronavirus disease 2019 (COVID-19)
The period of restrictions in connection with COVID-19 has led to a significant number of different disputes. Moreover, the features associated with legal representation in connection with coronavirus disease 2019 (COVID-19)require an individual approach to each specific case and careful legal analysis.
Dispute resolution and litigation are the important areas of legal services provided by BRACE Law Firm.
Disputes related to COVID-19
The introduction of a regime of self-isolation in Russia associated with the spread of coronavirus infection, as well as the imposition of restrictions on the work of some enterprises and organizations, had a very negative impact on the economic performance of many business entities and the welfare of the population.
Often, restrictions introduced in the Russian Federation at the end of March 2020 led to the insolvency of citizens and organizations and the inability to fulfill existing obligations that arose earlier based on concluding agreements and contracts, as well as other transactions.
According to the Review of Certain Judicial Practices Issues Related to the Application of Legislation and Measures to Counteract the Spread of the New Coronavirus Infection (COVID-19) N 1 in the Russian Federation, approved by the Presidium of the Supreme Court of the Russian Federation on April 21, 2020, recognition of the spread of the new coronavirus infection as force majeure cannot be universal and should be established taking into account the circumstances of a particular case. In addition to this document, explanations are given for various areas on the possible qualification of a pandemic as a force majeure event.
The Ministry of Finance of Russia together with the Ministry of Emergencies of Russia and the Federal Antimonopoly Service of Russia (letter of the Ministry of Finance of Russia N 24-06-05 / 26578, the Ministry of Emergencies of Russia N 219-AG-70, the Federal Antimonopoly Service of Russia N ME / 28039/20 dated April 3, 2020) as applied to the procurement of goods, work, services to meet state and municipal needs in connection with the spread of a new coronavirus infection caused by 2019-nCoV, it is established that the spread of a new coronavirus infection is of an emergency and unavoidable nature, and this is, therefore, a force majeure event.
In this regard, a huge number of disputes have arisen related both to cases of real impossibility of fulfilling obligations and to attempts to abuse the right by unscrupulous contractors and other persons.
In addition to the aforementioned, the settlement of such disputes was influenced by the factor that many authorities introduced a special regime of work. In particular, the courts and the Federal Antimonopoly Service of Russia accepted applications by e-mail or by post except the presence in person at the premises of the courts and the antimonopoly service.
Disputes between tenants and lessors in connection with COVID-19
A particularly large number of acute disputes in connection with COVID-19 arose precisely from the lease relationship, as many tenants were unable to make timely lease payments due to a temporary suspension of activity or a decrease in demand for the services rendered / work performed.
Some clarity regarding the procedure for leasing payments was introduced by the Federal Law of April 1, 2020 N 98-FZ “On Amending Certain Legislative Acts of the Russian Federation on the Prevention and Response of Emergencies”, which establishes the obligation of the lessor to conclude an additional 30 days from the date of the tenant’s request Deferred rent agreement.
It was also established the right of the tenant to demand a reduction in rent for 2020 due to the inability to use the property. In practice, disputes arise regarding the evidence of such impossibility.
Also, according to the requirements for the terms and conditions for the deferral of payment of rent under real estate lease contracts established by Decree of the Government of the Russian Federation of 3 April, 2020 N 439, deferral of rent is possible for tenants operating in sectors of the Russian economy who are most affected by the conditions worsening of the situation as a result of the spread of a new coronavirus infection. Moreover, such a delay is granted in respect of real estate owned by state, municipal or private property, except residential premises. The main sectors of the economy affected by the restrictions include the hotel business, transport, catering, fitness and leisure activities, tourism and entertainment.
According to the Judicial Practice Review on certain issues of judicial practice related to the application of legislation and measures to counteract the spread of the new coronavirus infection (COVID-19) N 2 in the Russian Federation, approved by the Presidium of the Supreme Court of the Russian Federation on April 3, 2020, companies have the right to defer payment of rent and individual entrepreneurs – tenants of real estate under lease agreements concluded prior to the adoption by the state authority of the relevant constituent entity of the Russian Federation of the decision specified in this norm, which operates in sectors of the Russian economy that are most affected by the deteriorating situation as a result of the spread of new coronavirus infection. In this case, the establishment of the presence of other additional grounds or conditions for the provision of a deferral of rental payment is not required.
The obligations of the parties to the lease are considered to be amended in terms of granting the tenant a deferral of payment of the rent from the date of the introduction of the high alert, regardless of the date of the conclusion of the relevant supplementary agreement.
It is important to note that the law does not directly provide for the termination of the contract in connection with the occurrence of force majeure circumstances. At the same time, in practice, most of the agreements contain the section “force majeure”, which provides for the possibility of unilateral cancellation of the agreement if the circumstances of force majeure have a long-term nature.
In practice, not all landlords were ready to provide tenants with a deferred payment or change the amount of rental payments downward. As a result, disputes between tenants and landlords must be resolved first through negotiations in the claims procedure, and in case of non-settlement of the dispute through negotiations and forwarding the claim, in court.
Litigation due to breach of obligation due to restrictions in connection with COVID-19
According to the general rule of Article 401 of the Civil Code of the Russian Federation, unless otherwise provided by law or contract, a person who has not fulfilled or improperly performed an obligation in carrying out entrepreneurial activity shall be liable if he does not prove that proper performance was impossible due to force majeure, that is, extraordinary and unavoidable under the given circumstances.
With the introduction of restrictions in connection with COVID-19, a lot of controversy arose as to whether the failure to fulfill obligations was a consequence of force majeure circumstances.
By reviewing N 1 of April 21, 2020, the Supreme Court of the Russian Federation clarified that a circumstance is recognized as inevitable if any person performing activities similar to the debtor could not avoid the onset of this circumstance or its consequences. At the same time, circumstances, the occurrence of which depended on the will or actions of the party to the obligation, for example, the lack of the necessary funds from the debtor, violation of obligations by its counterparties, unlawful actions of its representatives, cannot be recognized as force majeure.
From the above explanations, it follows that recognition of the spread of a new coronavirus infection as force majeure cannot be universal for all categories of debtors, regardless of the type of their activity, the conditions for its implementation, including the region in which the company operates, due to which the existence of force majeure circumstances It should be established taking into account the circumstances of a particular case (including the period of fulfillment of the obligation, the nature of the unfulfilled obligation, the reasonableness and good faith of the debtor, etc.).
Thus, in order to recognize a force-majeure circumstance, it is necessary that it be of an extraordinary, inevitable character. The emergency requirement implies the exclusivity of the circumstance under consideration, the occurrence of which is not usual in specific conditions.
Consequently, the very fact that the spread of coronavirus infection is recognized as a force majeure event can by no means always be used as a basis for exemption from the fulfillment of obligations and exemption from imposing sanctions associated with such non-fulfillment. To recognize the restrictions imposed in connection with COVID-19 as force majeure, an individual assessment of each specific situation is necessary.
In connection with the adoption of measures to prevent the spread of a new coronavirus infection, an aggravation of corporate conflicts often occurs. This is due both to the need to liquidate a business due to its unprofitability and the implementation of the separation of existing profits between partners, and to exacerbate previously arisen conflicts and attempts by unscrupulous business partners to make unilaterally profitable corporate decisions without proper notification to interested participants. All types of corporate disputes are particularly difficult to gather evidence and uphold a court position. For this category of disputes, the timely adoption of interim measures aimed at preventing the occurrence of negative consequences for all participants in a corporate conflict is especially important.
Disputes related to procurement in connection with COVID-19
To avoid suspension of procurement activities in connection with COVID-19, measures have been taken at the legislative level to continue procurement during the specified period. In particular, the right of the procurement commission to make a decision was introduced with the signing of protocols in electronic form. On its official website, the Russian Federal Antimonopoly Service clarified the possibility of non-competitive procurements aimed at preventing, preventing and eliminating the consequences of the spread of COVID-19.
Also, the Federal Antimonopoly Service of Russia switched to online complaints on procurement.
These innovations have their peculiarities and nuances, which are important to consider when contesting the provisions of the procurement documentation, as well as the actions (inaction) of the customer and/or the operator of the electronic site. In this regard, it is extremely important to timely seek legal support in resolving disputes related to COVID-19 in the course of procurement activities.
Disputes related to obtaining state support in connection with COVID-19.
A fairly large number of legislative innovations over the last period are aimed at supporting legal entities and individuals in connection with COVID-19.
In particular, an increase in sickness benefits and benefits due to job loss has been introduced. Payments have been introduced for persons with children, a moratorium on charging penalties for late payments of utility bills, credit holidays, etc.
To receive certain government support measures, it is necessary to provide a certain set of documents confirming the existence of appropriate grounds for receiving certain payments or deferrals / installments of fulfillment of obligations. At the same time, in connection with the mistake made by the authorized bodies, as well as in connection with the unlawful actions (inaction) of certain authorities, disputes may arise that must be resolved in administrative or judicial order.
To choose the most reliable way to protect violated rights, it is recommended that you seek legal assistance from lawyers with experience in upholding clients' rights in disputes related to obtaining government support in connection with COVID-19.
- Legal analysis of documents and other evidence submitted by the client on disputes related to COVID-19
- Legal advice from BRACE Law Firm regarding dispute resolution prospects for restricting new coronavirus infection
- Preparation and submission of a claim (if a mandatory pre-trial procedure is provided or the submission of a claim is necessary for other reasons)
- Development of a strategy and tactics for protecting a client in court
- Collection, preparation and retrieval of evidence for a court case
- Preparation and filing of a statement of claim (application) and other procedural documents on a litigation related to COVID-19
- Representation of interests, case management in court by lawyers of BRACE and completion of all necessary procedural actions
- Coordination of several parallel trials (if necessary)
- Preparation and support of conclusion of amicable agreements concluded at various stages of the trial
- Appeal of judicial acts in courts of appeal, cassation and supervisory review
- Legal support for disputes related to COVID-19
- Other legal assistance in litigation arising from disputes related to COVID-19