Suspension of the proceedings in the arbitration process occurs in the event of the occurrence of circumstances expressly provided for by law. In a number of situations, the court is obliged to suspend proceedings, in others it only has the right to do so. The judge makes a decision on this, which is sent to all participants in the process, and before resuming the consideration, he sends another act, which indicates a new date for the hearing.
This measure serves to protect the rights and legitimate interests of persons who cannot participate in meetings for a certain time, and is also used when consideration of a dispute is impossible for other reasons.
What is the arbitration process
The arbitration process is a judicial procedure mainly between business entities on issues related to their commercial activities. Everything related to the course of judicial consideration of this category of disputes is regulated by the Arbitration Procedural Code and is aimed at resolving contradictions that have arisen between business representatives.
An important feature of the arbitration process is that it exclusively considers disputes of an economic nature between an entrepreneur and another entity, provided that the issue concerns commercial activities.
Break
The legislation establishes three main forms of temporary suspension of legal proceedings. The first of these is a break. It should be understood as a temporary termination of the proceedings necessary for:
- Rest for judges and trial participants.
- Elimination of circumstances preventing the continuation of the consideration of the case. For example, the court may consider that the collected evidence is insufficient, and it is necessary to obtain additional information that can be provided in a short time.
The period of announcement and the procedure for interrupting production are regulated in Article 163 of the APC.
The maximum duration of a temporary suspension of proceedings is 5 days. If there is a need for a longer break, the arbitration tribunal must make a determination to adjourn the hearing.
The procedure for suspending and resuming proceedings in a case
If the consideration of the case is suspended, the arbitration court must issue a ruling (Article 147 of the Arbitration Procedure Code of the Russian Federation).
All participants are sent a copy of the document. Such a determination can be appealed by the participants in the case if they do not agree with it . For example, if a party can prove that the adjournment of the proceedings is initiated only for the purpose of delaying the process and that there is an abuse of its right.
The court has the right to refuse to satisfy a party’s request if it considers that there is no legal sense in establishing a pause in judicial proceedings, and that this will not help in any way to obtain new facts, information, evidence that is important for resolving the dispute, or the appearance of certain persons in court is not will affect the applicant's legal position.
The refusal to satisfy the application can also be appealed. The text of the complaint must justify why the suspension is necessary and how it will affect the outcome of the trial.
Commentary to Art. 143 Arbitration Procedure Code of the Russian Federation
1. Suspension of proceedings in a case is a type of temporary suspension of court proceedings, due to the impossibility of considering and resolving the case in court due to obstacles that have arisen.
The grounds for suspending the proceedings are divided into mandatory and optional. The grounds are objective in nature and do not depend on the will of the court or the persons participating in the case.
In Art. 143 of the APC establishes mandatory grounds, in the presence of which the arbitration court must suspend the proceedings in the case. For these reasons, the proceedings are subject to suspension not only in the first instance, but also in other instances (appeal, cassation, supervisory). The grounds for suspending proceedings in a case are applied not only when considering a case in a claim proceeding, but also in cases of other types of proceedings: in proceedings in cases arising from administrative and other public legal relations, proceedings to establish facts of legal significance, corporate disputes, etc. .
If there are appropriate grounds, the proceedings may be suspended repeatedly.
The question of the need to suspend the proceedings in the case may be raised by the persons participating in the case, or by the arbitration court itself, if it has become aware of the circumstances leading to the suspension of the proceedings.
Clause 1 part 1 art. 143 of the Arbitration Procedure Code provides for the obligation of an arbitration court to suspend proceedings in a case if it is impossible to consider this case until the resolution of another case considered by the Constitutional Court of the Russian Federation, the constitutional (statutory) court of a constituent entity of the Russian Federation, a court of general jurisdiction, the same or another arbitration court.
The impossibility of considering a case must be understood as the mutual connection of such cases, due to the fact that the circumstances included in the subject of proof in the case under consideration are established or disputed within the framework of the consideration of another case resolved in court. Such circumstances may include circumstances that are significant for the case and form the basis of claims or objections, legitimation of persons participating in the case. Circumstances established in another case, as a rule, have a prejudicial significance in matters of facts established by the court in relation to the participants in the arbitration case, the consideration of which is subject to suspension.
If the claims considered by arbitration courts in different cases are related based on the grounds for their occurrence and (or) the evidence presented and there is a risk of adoption of conflicting judicial acts, the arbitration court may, by virtue of a direct order of Part 9 of Art. 130 of the APC suspend the proceedings on the basis of the commented norm.
The basis for suspending the proceedings is also a challenge in the framework of constitutional proceedings to the rule of substantive law on which the applicant’s claims are based.
In light of the Resolution of the Constitutional Court of the Russian Federation dated January 21, 2010 N 1-P, and also taking into account the fact that consideration of the case in accordance with constitutional proceedings is the basis for suspending the arbitration case, it is of interest the possibility of suspending the proceedings in the case until the Supreme Arbitration Court of the Russian Federation develops legal positions on the application of the material norm rights in similar cases, if such cases are considered in supervisory proceedings in the Presidium of the Supreme Arbitration Court of the Russian Federation. Judicial arbitration practice, taking into account that a different interpretation of the norm of substantive law than will be formulated in the legal positions of the Supreme Arbitration Court of the Russian Federation will entail the cancellation of a judicial act, allows for the possibility of a positive answer to this question, considering it as a Federal Law, which allows in this case the suspension of proceedings in the case - Art. 6 APK. In accordance with this norm, legality in the consideration of cases by an arbitration court is ensured by the correct application of laws and other normative legal acts, as well as compliance by all judges of arbitration courts with the rules established by the legislation on legal proceedings in arbitration courts. If there are different judicial practices for a certain category of cases, in order to ensure legality and uniformity in the application of substantive law, it is permissible to suspend the proceedings until the consideration of supervisory complaints in similar cases in the Supreme Arbitration Court of the Russian Federation. In this case, it is permissible to suspend the proceedings under clause 1 of part 1 or under part 2 of Art. 143 APC.
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Determination of the Federal Antimonopoly Service of the West Siberian District dated April 4, 2006 in case No. F04-1382/2006(21095-A27-7).
It should be noted that the basis for suspension is the consideration of another case, which excludes the possibility of suspension of proceedings in the case of consideration by another court of a previously filed identical claim (between the same persons, about the same subject and on the same grounds). In this case, the application must be left without consideration.
When filing appeals against the rulings of the arbitration court, the question of the need to suspend the proceedings must be decided depending on the consequences that the consideration of the appeal may entail, as well as in order to exclude the possibility of making conflicting decisions. If a complaint is filed, consideration should be given to adjourning the trial until the complaints are resolved or to suspending the proceedings.
Proceedings in the case in the court of appeal are subject to suspension until an additional decision is made by the court of first instance in the case where the court of first instance is considering an application from a person participating in the case to make an additional decision on an unconsidered claim.
Consideration of the initial claim may be suspended or postponed until the consideration of appeals against such determinations as: a determination to return a counterclaim, or to refuse to approve a settlement agreement.
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See: Paragraphs 27, 37, 38 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 28, 2009 N 36 “On the application of the Arbitration Procedure Code of the Russian Federation when considering cases in the arbitration court of appeal.”
Evidence confirming the existence of grounds for suspending the proceedings under paragraph 1 of Part 1 of Art. 143 of the APC may be: a ruling on the initiation of proceedings in the relevant court, a ruling on preparing the case for judicial review, other court rulings, court notices, copies of statements of claim, etc.
According to clause 1, part 1, art. 143 of the APC, the basis for suspension is the presence of another case considered exclusively in court by those judicial bodies that are directly indicated in this norm. Accordingly, the proceedings are not subject to suspension in cases of initiation of a criminal case or a preliminary investigation, initiation of administrative proceedings, or conduct of an administrative investigation. The arbitration case is subject to suspension only after the completion of the preliminary (pre-trial) investigation, administrative investigation and transfer of the criminal or administrative case to the proceedings of the specified courts and their acceptance by the court. Consideration of a case of an administrative offense or other legal matter by another jurisdictional body not listed in paragraph 1 of Part 1 of Art. 143 of the APC is not a basis for suspending the proceedings.
According to clause 1, part 1, art. 143 of the APC cannot suspend the proceedings if the court sends letters rogatory and various requests.
Initiating independent proceedings on a claim to challenge a contract, including in the case when such a claim is brought by a founder, shareholder (participant) of an organization or another person to whom the right to file a claim is granted by law, does not in itself mean the impossibility of considering a case of collection under a contract in the courts of first, appeal, cassation and supervisory instances, which should not lead to the suspension of proceedings in this case on the basis of paragraph 1 of part 1 of Art. 143 APC. These provisions also apply when considering cases related to non-fulfillment or improper fulfillment of obligations from unilateral transactions and challenging these transactions, if this does not contradict their essence.
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Paragraphs 1, 6 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 23, 2009 N 57 “On some procedural issues in the practice of considering cases related to non-fulfillment or improper fulfillment of contractual obligations.”
Clause 2, Part 1, Art. 143 of the Arbitration Procedure Code is aimed at protecting the interests of a party who, for objective reasons, cannot independently protect their interests through personal participation in a meeting of the arbitration court. Such a reason is the presence of the party in the active part of the Armed Forces of the Russian Federation.
If the specified reasons are established in relation to the defendant, then the suspension of the proceedings may occur at the initiative of any of the persons participating in the case or the arbitration court. If these reasons are established in relation to the plaintiff, then suspension of the case is possible only if there is a request for this from the plaintiff himself. The commented norm does not link the need to suspend proceedings in the case with the presence in the active part of the Armed Forces of the Russian Federation not of the parties, but of other persons participating in the case. However, the presence of a third party with independent demands regarding the subject of the dispute in the active part of the Armed Forces of the Russian Federation in the presence of his petition should be grounds for suspension of the proceedings, since this participant in the process is vested with the procedural rights of the plaintiff, including the right to demand the suspension of the proceedings in the event impossibility of participating in the trial due to these circumstances.
There is no legal concept of “active part of the Armed Forces of the Russian Federation” in the legislation. In this regard, by analogy with paragraph. 4 tbsp. 215 of the Code of Civil Procedure, staying in an active part of the Armed Forces of the Russian Federation can be understood as the participation of a party in hostilities, performing tasks in conditions of emergency or martial law, as well as in conditions of military conflicts. This allows, when classifying a party’s military service as service in active units of the Armed Forces of the Russian Federation, to be guided by Federal Law No. 1-FKZ dated January 30, 2002 “On Martial Law” and No. 3-FKZ dated May 30, 2001 “On State of Emergency.”
Clause 3, Part 1, Art. 143 of the APC prescribes the suspension of proceedings due to the departure of a citizen - a party to a controversial legal relationship. The basis for suspension is the legal structure: death of a citizen (entry into legal force of a court decision declaring the citizen dead); the citizen was a party to a controversial legal relationship (including third parties with independent claims regarding the subject of the dispute); a controversial legal relationship allows for legal succession. If the disputed legal relationship does not allow for legal succession, the proceedings are subject to termination. For the application of this norm, it does not matter whether the heirs of the deceased citizen have the status of an individual entrepreneur.
The conclusion about the possibility of succession is made by the arbitration court on the basis of the rules of substantive law, evidence presented by the parties of the possible transfer of rights and obligations, the presence or absence of heirs, and inherited property.
Such cases of succession as transfer of debt, assignment of the right of claim do not entail suspension of the proceedings.
Clause 4, Part 1, Art. 143 of the APC provides for the court’s obligation to suspend proceedings in the case of a citizen who is a party to the case losing his legal capacity. The norm is aimed at protecting the interests of a person who has lost the ability through his actions to exercise procedural rights, perform procedural duties and entrust the conduct of the case in court to a representative. Powers of attorney previously issued by such a person to represent his interests in the arbitration court become invalid.
Loss of legal capacity should be understood as the entry into force of a court decision declaring a citizen incompetent or partially capable, if the disputed legal relationship concerns precisely those property rights in respect of which the citizen is recognized as having limited legal capacity. The loss of the status of an individual entrepreneur by a citizen is not a loss of legal capacity and does not entail the suspension of the proceedings.
2. For other cases provided for by the Federal Law, entailing a mandatory suspension of the proceedings in accordance with Part 2 of Art. 143 of the APC, cases provided for by the Federal Law on insolvency (bankruptcy) should be included, for example: clause 6 of Art. 10 provides that in the event of termination of procedural actions in a bankruptcy case, the arbitration court, on its own initiative, may suspend the bankruptcy proceedings until a ruling is made on the request to hold the persons controlling the debtor liable; para. 3. clause 1 art. 63 provides that from the date the arbitration court issues a ruling on the introduction of external supervision, at the request of the creditor, proceedings in cases related to the recovery of funds from the debtor are suspended; in Art. 199 states that if a debtor - a subject of a natural monopoly - before the arbitration court accepts an application to declare the debtor bankrupt, a statement of claim is filed with the court to invalidate acts of state authorities on the approval of prices (tariffs) for goods (work, services) produced and (or ) implemented under the conditions of a natural monopoly, the bankruptcy proceedings of such a debtor are suspended until the decision on the invalidation of the relevant acts of public authorities enters into legal force; clause 2 art. 204 provides that in the absence of objections from creditors, the arbitration court may approve a debt repayment plan, which is the basis for suspending bankruptcy proceedings for a period of no more than three months.
It should be noted that the suspension of the proceedings under Part 2 of Art. 143 of the APC is possible if the basis for suspension is provided for by the Federal Law. The laws of the constituent entities of the Russian Federation, decrees of the President of the Russian Federation, resolutions of the Government of the Russian Federation and other state bodies cannot establish additional grounds for suspending the proceedings.
Key Features
Suspension of proceedings in the arbitration process has the following characteristic features:
- Leads to the suspension of all procedural procedures for both the court and the participants in the proceedings.
- Has a certain duration. If the procedure for suspending the proceedings in the arbitration process has been applied, it must be completed. Otherwise, it will not be possible to resolve the case on its merits.
- It is applied not for a specific period, but until obstacles are eliminated, before certain actions are taken.
- Possible solely for objective reasons, the existence of which does not depend on the parties, other participants in the dispute and the court. Suspension of proceedings in a case in arbitration proceedings is permitted on the grounds established by law.
As a general rule, the duration of the interruption of the proceedings is not taken into account when calculating the period for consideration of the dispute. However, when determining a reasonable period for legal proceedings, it is taken into account.
Nuances
Despite the break that prevents further progress of the case, the parties to the dispute are entitled to a number of rights that they can exercise during the suspension of the proceedings. In particular, the plaintiff may abandon the claim, and the parties may enter into a settlement agreement.
In any of these cases, the court must first resume the proceedings and then carry out other procedural actions. Within the framework of a suspended process, a request for an agreement and a waiver of a claim cannot be considered.
It must be said that the interruption of proceedings automatically implies the suspension of all procedural deadlines. Therefore, in the ruling, the court does not need to separately indicate the stopping of periods.
Ways to postpone a hearing
The APC provides for 2 options for interrupting proceedings for a long period: mandatory and optional.
In the first case, the hearing must be adjourned if:
- Witnesses, experts, translators, notified of the place, date and time of the proceedings, did not appear in court, and the parties did not file motions to consider the dispute in the absence of these subjects.
- The party did not appear at the hearing, and the court does not have evidence that it was properly notified.
An optional adjournment of a hearing is permitted at the initiative of the court or at the request of participants in the proceedings. Reasons for postponing a hearing may include:
- The parties turn to a mediator or the court for assistance in resolving the dispute.
- A request from a person who has been duly notified regarding his inability to attend the meeting for a valid reason. In the application, the subject must justify his failure to appear.
- A party’s request to postpone the hearing due to the inability of his representative to attend the hearing for a valid reason.
- Illness of the judge and other circumstances preventing the holding of the hearing. In such cases, the proceedings are postponed by the chairman of the court or his deputy for up to 10 days.
- Failure of the person wishing to enter into a settlement agreement to appear.
- The need to provide additional evidence in the case.
The hearing is also postponed if the court considers that the proceedings cannot continue at this hearing, including due to the failure of one of the parties, other participants in the process, to appear in the event of problems with technical means (video conferencing system, for example).
Procedural points
If a break is announced within one day, the secretary makes a corresponding entry in the minutes of the meeting. If the court considers it necessary to interrupt the proceedings for a longer period, a ruling is issued. It indicates the date, place and time of the next meeting.
After a break, previously studied materials are not re-studied. This rule also applies in cases of replacement of participants in production.
The parties to the proceedings who were present at the hearing, during which the court announced a break and announced the time for the continuation of the hearing, are considered to have been duly notified. Their failure to appear at the hearing after a break cannot prevent the continuation of the trial.
Procedural rules
When making a ruling to postpone the hearing, the court notifies those present of the date, time, and place of the new hearing. Citizens are notified directly at the meeting against signature in the minutes.
A new trial begins from the moment at which the previous one was interrupted. Previously examined evidence is not re-examined.
The deadline for postponing a meeting is 1 month. If the dispute is settled, the period may be doubled.
The court has the right to question witnesses who appeared at the hearing subject to adjournment. This will avoid additional costs and distraction of citizens from their core activities. The collected information is announced at a new meeting.
The legislation does not provide for the possibility of appealing a ruling to postpone the proceedings. This is due to the fact that this procedural act does not violate the interests of the participants in the proceedings and does not prevent further consideration of the dispute.
Discontinuation of production
Typically, adjourned, adjourned, suspended or continuing proceedings result in a decision. However, in practice, there are often cases when circumstances are discovered due to which legal proceedings are terminated without the adoption of a final decision. The legislation clearly establishes the grounds for this.
The arbitration court terminates the proceedings if:
- The case cannot be arbitrated. After accepting the application from the plaintiff, the court must determine whether the dispute is within the jurisdiction of this authority. If not, the claim is returned.
- There is a decision of another arbitration, an instance of general jurisdiction, a competent court of a foreign state on the same dispute, on the same subject, on the same grounds, which has entered into force. This rule does not apply if the recognition and implementation of a foreign court decision has been refused.
- There is an arbitration decision that has entered into force on the same dispute, between the same persons. The exception is cases where the arbitration court refused to issue a writ of execution for the forced execution of the said decision.
- The legal entity that was a party to the dispute was liquidated.
- The plaintiff abandoned his claims against the defendant.
- The citizen participating in the case has died, and succession is not provided for in the disputed legal relationship.
- There is a court decision that has entered into force, which verified the compliance of the appealed act with a normative document that has greater legal force.
In addition, the arbitration is obliged to terminate the proceedings if the parties reach an amicable agreement.
