The dispute resolution practice of the Law Firm “Levant and Partners” draws attention to a number of clarifications of the Supreme Court of the Russian Federation, which are given in the Resolution of the Plenum of the Supreme Court of the Russian Federation dated March 24, 2016 No. 7 “On the application by courts of certain provisions of the Civil Code of the Russian Federation on liability for violation of obligations.”

The Supreme Court of the Russian Federation, in particular, clarified the application of the new provisions of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation), which came into force on June 1 last year.

The Supreme Court of the Russian Federation indicated that any evidence of the possibility of extracting it can be cited to justify lost profits; causation must be proven to a reasonable degree of certainty, and the rules and standards for applying force majeure clauses and their impact on obligations must be clarified.

The resolution of the Plenum clarified the provisions of the new institution – compensation for losses (the Russian analogue of the English indemnity), enshrined in Article 406.1 of the Civil Code of the Russian Federation.

An agreement between the parties to an obligation may directly establish the obligation of one of them to compensate for the property losses of the other party that arise in the event of the occurrence of certain circumstances that are in any way related to the fulfillment, change or termination of the obligation or its subject and are not a violation of the obligation.

In contrast to compensation for losses under the rules of Articles 15 and 393 of the Civil Code of the Russian Federation, compensation for losses under the rules of Article 406.1 of the Civil Code of the Russian Federation is carried out regardless of the presence of a violation of the obligation and regardless of the causal connection between the behavior of the obligated party and the losses subject to compensation.

Within the meaning of Article 406.1 of the Civil Code of the Russian Federation, compensation for losses is allowed if it is proven that they have already been incurred or will inevitably be incurred in the future. In this case, the party demanding payment of the corresponding compensation must prove the existence of a causal connection between the occurrence of the relevant circumstance and its losses.

The parties have the right to establish, in particular, a procedure for determining the amount of losses, according to which one of the parties compensates the other for all losses incurred by it caused by relevant circumstances, or part of them.

The clarifications of the Plenum of the Supreme Court of the Russian Federation regarding liability for dishonesty are relevant.

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