Amicable agreements may be made to require not only judicial but also corporate approval

09.07.2013

Marina Bilyk, Senior Associate of the Law Firm "YUST"
Mikhail Chugunov, Associate of the Law Firm "YUST"

The most general requirements to the contents of amicable agreements and the procedure of their approval by the court of arbitration are fixed by Chapter 15 of the APCRF. According to Articles 138, 139, 140, 141 of the APCRF, the law does not limit the liberty of the parties to formulate any commercial conditions of the dispute settlement. However, the law obliges the court to check the terms of the amicable agreement drawn up by the parties for their compliance with the legal provisions. Besides, the court must verify if the terms of the agreement breach rights and legal interests of any third parties. The court of arbitration may not approve the amicable agreement, if it contradicts the law or breaches rights and legal interests of any third parties. In the process of drawing up of the amicable agreement terms it often becomes clear that the deal or deals stipulated by the agreement meet the criteria of a large transaction or a transaction with interest. In this situation, a number of questions appear, the solution of which may cause certain practical difficulties:

1) Is amicable agreement a transaction, and are legal provisions on the special procedure of approval of large transactions and transactions with interest applicable to it;

2) Is there a need to obtain corporate approvals of the amicable agreement if the amicable agreement is a large transaction or a transaction with interest, should the approval be received prior to the execution of the amicable agreement or it may be obtained at a later stage;

3) Must the court, to the approval of which the amicable agreement was submitted, check if the amicable agreement is a large transaction or a transaction with interest for the parties to it, and if so, whether the legally established procedure of approval of such transaction is complied with;

4) What legal consequences may arise if the court ascertains the absence of the legally stipulated corporate approval of the amicable agreement that meets the criteria for a large transaction or a transaction with interest?

The analysis of the arbitration court practice allows to say that there is currently no uniform approach of the courts of arbitration to the resolution of the question, whether amicable agreements are civil law transactions and whether the provisions of the large transactions and transactions with interest law should be applied to it. <…>

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