Shelving of a Statement of Action
The Code of Arbitration Practice of the Russian Federation of 2002 (hereinafter - "the CAP"), as compared to the pre-effective Codes of Arbitration Practice, provides for a new procedural action - shelving of a statement of action.
Shelving of a statement of action is a procedural action which is performed by a judge when considering whether to accept the statement of action (part. 1, Art. 127 of the CAP) whereto the judge resorts when he concludes that in terms of the form or content the statement of action does not comply with established requirements (parts 1 and 2, Art. 125 of the CAP), or it is not attached with the requisite documents (Art. 126 of the CAP).
A statement of action is shelved instead of being returned to the claimant with a view to enabling the latter to remedy various defects and omissions of a formal nature and to produce missing relevant documents to be attached thereto.
Pursuant to the CAP of 1995 (Art. 108) the failure to comply with the legally established form and content of a statement of claim, the lack of necessary, legally provided attachments thereto were the grounds for returning such statement of action.
It was permitted to remedy these defects without filing the statement of action anew only if they were not identified by the court when the action was being accepted (paragraphs 8, 9 of the Decree of the Plenary Session of the High Arbitration Court of RF dated 31 October 1996, No. 13 On Enforcement of the Code of Arbitration Practice of the Russian Federation in Consideration of Cases in Courts of Original Jurisdiction ).
Pursuant to Articles 128, 129 of the CAP, the failure to meet formal requirements in filing of a statement of action does not entail its return without enabling the claimant to promptly eliminate the violations impeding acceptance of the statement of action, which have been identified by the court.
However, not all defects of a statement of action impeding its acceptance may be removed by the claimant without having the statement of action returned.
Immunity of a case to the arbitration court jurisdiction excludes the possibility to be considered by the given court. A respective statement of action should be filed by a claimant only before a proper arbitration court. Therefore, pursuant to para. 1, part 1, Art. 129 of the CAP the defectiveness of a statement of action resulting from resorting to a wrong court entails return of the statement of action concerned rather than its shelving.
Combination of several claims which are not interconnected implies the necessity to transform the action to several actions. The drawback of a statement of action of this kind is deemed the ground for its return.
The Code of Civil Practice of RSFSR (the CCP of RSFSR) (Art. 129) does not provide for such ground of an action rejection. In the given case the statement of action has a defect which may be removed both by the court by severing one or several cases for a separate trial (part 3, Art. 130 of the CAP), and by the claimant by way of separation of the claims. Therefore, it would be logical to give such opportunity to the claimant by way of shelving the statement of action, the more so that it is mostly the judge who decides on disconnectedness of claims.
Some grounds for shelving of a statement of action (if it is not signed by a proper person - part 1, Art. 125 of the CAP, or there are no information and documents confirming observance of a claim or another pretrial procedure of settlement when it is provided for by a federal law or contract - para 8, part 1, Art. 125, para. 7, Art. 148 of the CAP) coincide with the grounds for leaving an action without consideration (paragraphs 2, 7, Art. 126 of the CAP). The statement of action is left without consideration in case the stated circumstances are established after the proceedings have been initiated.
It is necessary to take into account that an application to increase the amount claimed cannot be shelved in case the statutory duties have not been paid in proportion to the increased amount of claims. Pursuant to part 2, Art. 102 of the CAP the failure to present a document confirming such statutory duties payment entails, pursuant to the rules of Art. 129 of the Code, return of such application.
A counterclaim filed in absence of special conditions for acceptance of the action as a counterclaim, which are provided for in part 3, Art. 132 of the CAP, is also returned by the arbitration court (part 4, Art. 132 of the CAP). If there are such conditions and the impediment to the action acceptance is caused by the failure to meet the requirements of Articles 125 and 126 of the CAP, the counterclaim should be shelved on general grounds (Art. 128 of the CAP).
Shelving of a statement of action is effected not only in the cases of action proceedings (Section II of the CAP). For the purposes of the law sense this procedural action is performed by the court also in the cases for which the Code provides consideration according to the general rules of action proceedings (part 1, Art. 189, part 1, Art. 191, part 1, Art. 197, part 1, Art. 202, part 1, Art. 207, part 1, Art. 212, part 1, Art. 217), since neither the Code, nor any other federal law establishing peculiarities or other rules of the respective proceedings provide otherwise.
Pursuant to the rules of Art. 128 of the CAP, statements of action filed in cases arising from administrative and other public relations (Section III of the CAP) or in cases of special proceedings (Chapter 27 of the CAP) are left without consideration pursuant to the rules of Article 128 of the CAP if they have been filed with the failure to meet the requirements of Articles 125 and 126 of the CAP (to be met in filing of statements of action in cases which should be considered pursuant to Chapter 22 of the Code), or if in respective cases the special requirements specified in parts 1 and 2 of Art. 193, parts 1 and 2, Art. 199, Articles 204, 209, 214, 220 of the CAP have not been met.
The Code does not give a direct answer to the question of possibility to shelve the application seeking recognition of a debtor as bankrupt. Pursuant to para. 1, Art. 42 of the Federal Law On Insolvency (Bankruptcy), if the application seeking to recognize a debtor as bankrupt does not comply with the requirements provided for in Articles 32-40 of the Law, it is to be returned by the arbitration court.
Pursuant to part 1, Art. 223 of the CAP insolvency cases are considered by arbitration courts according to the rules of the CAP with due regard for the peculiarities established by federal laws regulating insolvency (bankruptcy). Hence, special rules contained in the above-mentioned laws have a priority over those of the CAP. The rule of para. 1, Art. 43 of the Federal Law On Insolvency (Bankruptcy) provides for a special consequence - return of applications which do not meet special requirements for filing applications in insolvency cases. Therefore, Art. 128 of the CAP cannot be applied to these cases.
In the event a debtor's manager is obliged to file an application before the court and this application is not attached with the documents provided for in Art. 34 of the above-mentioned law, it is accepted by an arbitration court, and the missing documents will be demanded and obtained for preparation of a case of bankruptcy for court proceedings. Hence, shelving of the application is not effected in this case either, otherwise it would impede the progress of the case of bankruptcy whereas the latter is subject to compulsory institution.
Part 4, Art. 231 and part 4, Art. 237 of the CAP provide expressly for shelving of respective applications in cases of challenging the arbitration awards and delivery of a writ of execution for enforcement thereof (Chapter 30 of the CAP). if the requirements of Articles 231 and 237 of the CAP are not met when these applications are filed, since such cases are considered not according to the rules of action proceedings, but following the procedures established in Chapter 30 of the CAP.
The Code does not dwell upon possibility to shelve (or to return) applications for acknowledgment and enforcement of a foreign court judgment and a foreign arbitration award (Chapter 31 of the CAP), although Art. 242 of the CAP provides for special requirements both to the content of such applications and the list and form of the documents to be attached thereto (the necessity to notarize relevant documents, to legalize them or affix an apostille, to submit a notarized translation thereof, etc. - part 6, Art. 242, Art. 255 of the CAP).
This technique of the legislator arouses perplexity, especially when the rules of Art. 242 are compared with those of part 4, Art. 237 of the CAP, since it appears that no consequences for failure to meet the requirements of Art. 242 of the CAP are provided for by the Code. It cannot be excluded that the practice will choose application in relevant cases of Articles 128 and 129 of the CAP also to this category of cases since an alternative to shelving (returning) of the application might be only dismissal of the application to acknowledge and enforce a foreign court judgment or a foreign arbitration award. A thorough specification of the cases when such dismissal is possible is given in Art. 244 of the CAP which contains no such ground for refusal to acknowledge and enforce a foreign judgment or a foreign award.
The court delivers a determination on shelving of a statement of action. The determination is delivered solely by the judge in time provided for deciding on acceptance of a statement of action (part 1, Art. 127 of the CAP), i.e. within 5 days from the date the statement of action if filed with the arbitration court.
The law obliges the judge to state in such determination the grounds for shelving of a statement of action, as well as the time for removal of defects thereof or of the documents attached thereto.
Apparently, the determination should contain the reference to the specific rule of Articles 125, 126 of the CAP, which, in the court opinion, has been violated by the claimant, so that the claimant can understand which defect has been found by the court in the statement of action or in the documents attached thereto, and consequently, can have the opportunity to promptly remove the defects.
A determination on shelving a statement of action is delivered in the form of a separate judicial act, its copy is sent only to the claimant, since proceedings have not been initiated yet at this stage. A copy of the determination is sent not later than on the day following its delivery.
As soon as the circumstances underlying shelving of a statement of action are removed by the claimant, the court delivers a determination to accept the statement of action as of the date of its initial filing with the court. Accordingly, all procedural and substantive consequences of filing and acceptance of the statement ensue from the same date.
If the defects of the statement of action have not been removed by the time designated by the court the statement is returned to the claimant (para 4, part 1, Art. 129 of the CAP).
When the time for removal of defects that underlie shelving of a statement is being set, two factors should be taken into consideration.
The first factor - the time sufficient for the claimant to remove the defects that have been pointed out by the court as soon as a copy of a relevant determination is received. The second factor - the time periods provided for by the CAP for preparation and consideration of a case.
Pursuant to Art. 134 of the CAP the time period for preparation of the case for court proceedings is computed as of the date a statement is filed with an arbitration court and is equal to two months; for a number of categories of cases this term is much shorter (part 1, Art. 194, part 1, Art. 200, part 1, Art. 205, part 1, Art. 215, part 2, Art. 228, part 1, Art 232 of the CAP). The time during which the statement of action has been shelved is not deducted from the term provided for by law for preparation and consideration of the case, since the Code has no respective provision, and the statement is deemed accepted as of the date of its initial filing with the court.
Borrowing the institute of shelving of a statement of action (which is a positive factor) from the Code of Civil Practice, the legislator has failed to take into account that in courts of original jurisdiction the term provided for preparation starts only from the date of a statement acceptance. Hence, until a determination on a statement acceptance is delivered, the term the court is responsible for has not commenced, and the time of a statement shelving is naturally not included into the term of preparation and consideration of the case.
The situation is different in arbitration courts. The Code (as well as the CAP of 1995) quite soundly connects commencement of the term with the date of a statement filing before the court and not with the date of delivery of a determination on a statement acceptance, since in case of such procedure of determination of the term commencement excluded are the situations common for courts of original jurisdiction, when no determination on the action materials is delivered for a long time and, at that, the term of the case consideration is not deemed infringed, i.e. there is no "case" yet.
Such order of terms calculation which is set forth by the CAP implies the necessity to include in the Code the rule which would provide exclusion of the time of an action shelving from the term provided for preparation and consideration of a case.
Apparently, it is necessary for the High Arbitration Court to give a respective construction of part 3, Art. 128 of the CAP, otherwise arbitration courts will either be unable to observe the time provided for consideration of cases, especially those which should be considered within 10 or 15 days (part 1, Art. 205, part 1, Art. 210 of the CAP), or they will fix unobservable time for defects removal by the claimant.
Although Art. 128 of the CAP does not mention the possibility to appeal against a determination on shelving of a statement of action, such right of appeal, as is clear, proceeds from part 1, Art. 188 of the CAP. The latter, unlike the CAP of 1995 (Articles 160, 179) provides for appeal against determinations not only in the events expressly provided for by the Code, but also when the determination impedes further progress of a case.
The impeding nature of determinations on actions shelving is obvious (although some jurists repudiate it). With a good reason or not, but the case does not progress, it has not even been instituted. Hence, there is a manifest impediment to consideration of the claimant's legal claims resulting from the defects (true or supposed) of the statement of action filed.