Construction related disputes in the practice of the Supreme Court of Russia

Traditionally, construction related disputes have made a solid part of disputes heard by commercial arbitration courts both in terms of quantity (only in 2015 commercial arbitration courts considered more than 30 thous. disputes arising from construction contracts), and the amount of claims (the overall amount of construction contracts related claims for the same period exceeded 344 bln rubles).

Over 15 years ago, the Presidium of the Supreme Commercial Arbitration Court of Russia in its Newsletter dated 24.01.2000 No. 51. summarized the practice pertaining to resolving disputes associated with construction contracts. Since then, no systematized explanations have been published by higher courts on matters of applying construction contracts related legislation, and the relevant court practice has been formed based on resolutions of the Presidium of the Supreme Court of Russia issued in particular cases.

In August 2014, the Supreme Commercial Arbitration Court was abolished, and the functions of the Presidium of the Supreme Commercial Arbitration Court were actually transferred to the Judicial Board on Economic Disputes with the Supreme Court of Russia. Over the last two years, the Judicial Board on Economic Disputes with the Supreme Court has on multiple occasions referred to the existing practice of resolving construction related disputes. Somewhat less often similar issues have become the subject of consideration by the Judicial Board on Civil Cases with the Supreme Court of Russia.

We are offering to your attention a review of the practice of the Supreme Court of Russia on construction related disputes from 2015 to 2016. The review covers issues pertaining to essential terms of construction contracts, dates for performance of works and the quality of works, delivery and acceptance of works, contract termination, rights to the architectural design, securing performance of the contractor’s obligations (bank guarantees and the so called “guarantee withholding”). A special focus is made on contracts for performance of works for state or municipal needs, and procedural issues associated with consideration of construction contract related disputes (e.g., a court-appointed expertise).