The Banking Litigation Law Review: Russia


Banking disputes in Russia are considered by commercial courts and courts of general jurisdiction. Commercial courts hear commercial disputes between individuals and entities engaged in entrepreneurial activities (e.g., a bank recovering debt from an agricultural and industrial holding or an individual entrepreneur). The courts of general jurisdiction rule on disputes that involve individuals but are unrelated to business (e.g., where an individual seeks to terminate a consumer credit agreement in court).

Two criteria are used to choose a competent court: the parties involved and the subject matter of the dispute. Bankruptcy cases and corporate disputes are exceptions to this rule and are always considered by commercial courts.

On a separate note, it is worth mentioning that, in the past, a substantial number of disputes involving banks were considered by arbitral tribunals, that is, non-state adjudication bodies established in accordance with the requirements of the law. As the relevant requirements have tightened, however, banks have lost the opportunity to set up such tribunals and, nowadays, almost all banking disputes are resolved by state courts.

Conduct of proceedings before commercial courts and courts of general jurisdiction is regulated by separate procedural codes, namely, the Russian Commercial Procedure Code, which governs the proceedings in the commercial courts, and the Russian Civil Procedure Code and the Russian Administrative Procedure Code, which govern the proceedings in the courts of general jurisdiction. The Administrative Procedure Code applies to disputes that involve a public law element (for instance, it will apply if a bank files a claim for the invalidation of a law). However, it should be noted that such disputes involving banks are nowadays few and far between.

Legal proceedings in Russia are almost always oral and require the attendance of the parties. The court hears the parties, experts and witnesses and, save for rare exceptions, examines other evidence directly in the courtroom.

In addition to the oral nature of the proceedings and direct examination of evidence, legal proceedings in Russia are subject to the principles of free exercise of procedural rights and are of an adversarial nature.

The principle of free exercise of procedural rights2 means that the parties are free to choose the remedies they seek and to further dispose of their procedural rights.

The principle of an adversarial nature of proceedings implies that a party must prove the facts upon which it relies and, if necessary, refute the facts invoked by the opposing party. Limitations of this principle, including in terms of a more active role of the court, a party's release from burden of proof or its reversal, exist at the level of legislation or court practice for some categories of disputes.

Significant recent cases

Similarly to 2020, the Supreme Court of the Russian Federation continues to play an active role in protecting individuals in cases that concern consumer loans and provision of other banking services. The Russian Supreme Court has made the following findings this year when considering this category of disputes:

  1. a bank's actions relating to using an individual's personal data without his or her knowledge in order to open a bank account and perform operations with the account may be qualified as causing moral harm and damaging the individual's business reputation. The affected individual shall be entitled to compensation of moral damages irrespective of further actions of the bank, that is, even if the bank closes the account at issue (Ruling of the Judicial Chamber on Civil Cases of the Supreme Court of the Russian Federation No. 11-KG20-18-K6 of 16 February 2021 in Case No. 2-5752/2019); and
  2. if a client spends money from his or her bank card account, which does not allow for crediting (i.e., where the client had signed the application for a bank card without signing the individualised terms and conditions of issuance and servicing of a debit card with an overdraft), an account to which the bank mistakenly transferred money, then the bank may not charge interest under the loan from the client unless it proves that the client was notified of the credit account terms and conditions, as well as that the loan agreement was executed as per the proper form (Ruling of the Judicial Chamber on Civil Cases of the Supreme Court of the Russian Federation No. 5-KG20-134-K2 of 26 January 2021).

Moreover, the trend (originating in 2020) in the court practice of recovering damages from the banks of the controlling persons, which are under rehabilitation, continues to develop. This concerns the banks whose financial standing has deteriorated, but the Central Bank of Russia has not revoked their licences and is taking measures to restore their solvency.

A number of such lawsuits for damages have already been satisfied by courts. In 2021, a judgment for the recovery of 198 billion rouble worth of damages from the former management of JSC Moscow Industrial Bank was upheld by the appellate and cassation courts.3 Furthermore, the current record-breaking amount of damages for Russia (more than 289.5 billion rouble) was recovered from the former managers of Otkritie Bank at the end of 2020.4 In 2021, this decision was upheld by all higher instance courts, including the Supreme Court of the Russian Federation.

As of today, there is only one case in Russian court practice where the court refused to recover damages in the amount of 13 billion rouble from the former management of a bank that was undergoing rehabilitation. In 2021, the first instance court refused to recover damages from the former managers of Asian-Pacific Bank. The appellate court endorsed the decision of the first instance court.5 In that case, the court found that a mechanism for calculating damages to be recovered from the bank's controlling persons had been introduced as a law after the actions imputed to the defendants. On that basis, the court concluded that the provisions in question could not be retroactively applied to them. Separately, the court ruled that the rehabilitation mechanism used by the Central Bank of Russia entitled it to participate in the share capital of the bank under rehabilitation and derive income from such participation; therefore, no loss of profit occurred on the part of the Bank of Russia.

Moreover, first instance courts continue to consider cases on the recovery of damages from individuals who previously controlled such credit organisations as B&N Bank (claims for 283 billion and 85 billion rouble) and Promsvyazbank (claims for approximately 280 billion rouble). Additionally, new claims have been submitted to courts for the recovery of damages from former owners and top managers of credit organisations. An example is the lawsuit against the persons controlling Avtovazbank (113 billion rouble). Additionally, in late 2020, Trust Bank filed a record-breaking lawsuit for 306.5 billion rouble against the persons controlling Rost Bank, which had undergone rehabilitation and had been merged into Trust Bank.

In the past, the managers and beneficiaries of banks compensated damages only if the bank was declared bankrupt but, nowadays, damages are also being recovered at the stage of rehabilitation.

Furthermore, Russian courts have heard the first case where such a sanction as recovery of damages was applied to the former chairman of the management board of a bank that was financially stable and faced neither rehabilitation nor bankruptcy.

Thus, in July 2021, the Moscow Commercial Court6 set a precedent, recovering 875 million rouble worth of damages from the former deputy chairman of Zenit Bank in favour of the bank, which was not subjected to rehabilitation or bankruptcy proceedings. The Appellate Court upheld the decision.7 The defendant has already filed a cassation appeal, but a hearing before the cassation court has not yet been scheduled.

Therefore, the court practice is evolving towards expanding the number of prospective defendants and possible situations for the purposes of recovery of damages and imposing subsidiary responsibility on the controlling persons, where banks encounter financial problems: apart from the ultimate beneficiaries, courts hold as many top managers as possible liable, including the members and chairpersons of management boards, the members of boards of directors and supervisory boards, and the shareholders.

Recent legislative developments

Key amendments to the Russian banking legislation in 2021 have been implemented in the following areas.

i Amendments to the law on consumer lending

Protection of the interests of individuals in consumer lending and other banking services is continuously developing not only at the level of court practice, but also through legislative amendments.

In 2021, Federal Law No. 329-FZ of 2 July 2021 on Introducing Amendments into the Federal Law on Consumer Loans (Lending)8 was adopted with an aim to proctect the rights of consumers of lending services. The law eliminates the requirement that a minimal amount (no less than the monthly credit payment) shall be at all times available in the account used to repay the loan. The law also specifies that the method of calculating the highest permitted amount of liquidated damages be no more than 20 per cent of the annual outstanding amount under the loan agreement. Moreover, a rule has been enacted requiring that all extra services be included in the price and allowing the borrower to turn down the services in question.

ii Requirement of credit and insurance organisations and private pension funds to provide further information on controlling persons

Early this year, the new Federal Law No. 23-FZ of 24 February 2021 on Introducing Amendments into Certain Legislative Acts of the Russian Federation with Regard to Ensuring Liability of Persons Controlling Financial Organisations was adopted to establish a duty for credit and insurance organisations, as well as private pension funds, to identify their controlling persons on a regular basis, update information about them and provide this information to the Bank of Russia, to take effect on 1 July 2021. This amendment has been introduced to circumvent the difficulties that arise in disputes concerning the subsidiary liability of the controlling persons under the obligations of the above-mentioned financial organisations.

The fact that this law was adopted effectively amounts to the tightening of legislation on matters that concern bringing the controlling officers of financial organisations to subsidiary liability for the debts of the financial organisations. The law ensures that potential respondents are known in advance in cases where financial organisations encounter financial difficulties that may require recovery of damages from the respondents or their subsidiary liability.

Moreover, additional powers have been vested in the Bank of Russia, including the powers to make independent decisions to recognise a person (not included on the lists filed by the financial organisation) as a controlling person of the organisation and keeping registers of persons controlling financial organisations.

iii Amendments related to strengthening control over suspicious and illegal transactions

Financial regulation in the Russian Federation is aimed at strengthening control over dubious transactions and generally preventing such transactions. This objective is realised both through the elaboration of the laws and through the development of court practice in the field.

On 10 January 2021, amendments into the laws on combating money laundering and financing of terrorism entered into force and effect, providing, inter alia, for the tightening of control over suspicious transactions on the part of the Federal Financial Monitoring Service. For instance, deposits into or withdrawals from bank accounts of organisations in excess of 600,000 rouble, now fall under such control.

In July 2021, further amendments were enacted into the laws on combating money laundering and financing of terrorism. According to these new developments, mandatory control has been extended to the receipt by individuals or legal entities (save for credit organisations) of funds from foreign unincorporated entities, if the funds in question are received from a client or a bank servicing a client, or both, located in the territory of a specifically designated state, or its administrative and territorial unit. A list of undesirable countries will be drawn up separately. Notably, the list will be privileged and will be communicated to banks only.

Additionally, in 2021, the Bank of Russia published an Information Letter,9 where it set the following criteria for establishing indicators of active involvement of credit organisations in suspicious non-cash or cash, or both, transactions:

  1. dubious client transactions exceeding 500 million rouble in the last quarter: notably, in 2017, 2016, and 2014, the threshold for such transactions was 1 billion, 2 billion and 3 billion rouble, respectively; and
  2. total suspicious transactions exceeding 2 per cent of the total amount of debit turnover in client accounts: at the same time, suspicious (dubious) transactions10 are understood as transactions that may, in fact, be intended for evading taxes and customs duties, siphoning funds off from the Russian Federation, money laundering and other illegal purposes, in each case including transactions that have the features of transit transactions.

Lowering of the above-mentioned thresholds is aimed at fostering responsibility of the banks and creating incentives for the identification and prevention of suspicious transactions.

Changes to court procedure

On 1 January 2021, new amendments entered into force that concern the regulation11 of relations between consumers and credit organisations, consumer credit unions, pawnshops and private pension funds. According to these amendments, the pre-trial complaint procedure has become mandatory for disputes between consumers of financial services of the above-mentioned financial organisations in cases where claims do not exceed 500,000 rouble. A consumer of financial services must submit his or her complaint directly to the financial organisation in question; if the dispute is not settled, the consumer has to apply to the financial ombudsman and only after that may he or she take the claim to court. Therefore, the amendments are designed to enhance the protection of consumers' rights: several pre-trial stages for the settlement of disputes, as well as the availability of a financial ombudsman, will allow them to resolve disputes more quickly and efficiently, without approaching courts and incurring legal expenses. In addition, the amendments facilitate the reduction of the judicial system's overall workload.

Interim measures

In Russia, interim measures are not very common, which may be due to three factors. First, and most crucially, it is rather difficult to prove the grounds and all preconditions for applying interim measures in line with the rules of the law and explanations established by the court. Second, applicants for interim measures in Russia, including banks, almost never provide counter-security. Third, courts tend to only grant the interim measures expressly provided in the law. Such special measures exist, for instance, in corporate disputes and insolvency (bankruptcy) disputes.

The statistics12 of applying interim measures have remained largely at the same low level in the last several years: thus, in 2017, 31 per cent of applications were granted; 30 per cent in 2018; and 28 per cent in 2019. At the same time, notably in bankruptcy cases, where banks are often active participants, the statistics are more positive, with 51 per cent of applications granted in 2017; 55 per cent in 2018; and 58 per cent in 2019.

According to the stage at which they are introduced, interim measures may be divided into three groups: preliminary interim measures (before the case is initiated); measures securing the claim (while the case is pending); and measures securing execution of the judicial act (after the judicial act is rendered). The list of interim measures set forth by the law is non-exhaustive and is supplemented, among other things, by special laws; for instance, Federal Law No. 127 of 26 October 2002 on Insolvency (Bankruptcy).

Banks mostly file for interim measures while the case is pending because counter-security is required to obtain preliminary interim measures. Owing to the specific features of disputes involving banks, concerning mostly the recovery of debt under loans and levying execution on pledged assets, the interim measure most often granted is the freezing order in respect of the debtor's funds or other assets.

Additionally, in the past few years, interim measures in the form of attachment of the assets of controlling persons in the bankruptcies of banks have been extremely common in Russia. These are the disputes on subsidiary liability of the controlling persons of banks. Because the amount of such liability in the overwhelming majority of cases equals the amount of outstanding register of creditors' claims, which usually features claims for hundreds of millions or several billion rouble, the attachment is imposed on all the controlling persons' assets. The success of interim measures in this case is due to the lower standard of proof set forth by the Russian Supreme Court, which has referred to the need to protect creditors' interests in the bankruptcy of the relevant bank.

Privilege and professional secrecy

Under Russian law, credit organisations must keep the operations, accounts and deposits of their clients and correspondent banks secret.

However, bank–client privilege in Russia is not absolute and falls under numerous exceptions. For instance, information on accounts and operations may be provided to courts, tax authorities, law enforcement authorities, the audit chamber, court bailiffs or an insolvency receiver in a bankruptcy case.

Banks and their employees may be held liable for violating the bank–client privilege under the civil, administrative or criminal laws. Criminal responsibility for this offence is very rare, but it is often invoked together with responsibility for other offences, such as fraud. Civil law liabilities in the form of recovery of damages and administrative liability are not common in practice.

This is why banks very often broadly interpret the exemptions from bank–client privilege provided by the law. For example, in early 2019, the Russian Supreme Court looked into13 whether banks may disclose information to the Russian Federal Antimonopoly Service, contrary to the provisions of Federal Law No. 395-1 of 2 December 1990 on Banks and Banking Operations. The law does not mention the Federal Antimonopoly Service among the parties that may receive information subject to bank–client privilege. On the basis of its trial of the case, the Russian Supreme Court held that disclosure in that instance would violate the bank–client privilege until the law is amended accordingly.

Other types of professional privilege include attorney–client privilege, audit secret, notarial secret, insurance secret and trade secret. In disputes involving banks, the attorney–client privilege that allows exchanges of information with an attorney and reliance on confidentiality is most relevant. The rules for an attorney's storage and use of information, as well as liability for violating the same, are governed by Federal Law No. 63-FZ of 31 May 2002 on Legal Practice and Advocacy in the Russian Federation and the Code of Professional Ethics of Attorneys (adopted by the First National Congress of Russian Lawyers on 31 January 2003), as well as by local acts of the attorney chambers. Therefore, in approaching lawyers for legal services, banks should take care that their representatives hold the status of attorney.

Jurisdiction and conflicts of law

Disputes involving banks in Russia are generally heard by a state court at the location of the respondent, unless the law or contract provides otherwise.

If foreign banks are involved, the Russian courts will have jurisdiction in the following cases: for instance, where the respondent or its property is found in the Russian territory; where the branch of a foreign legal entity is found in the Russian territory; and where the dispute arose from a contract that was to be performed in the Russian territory.

The exclusive jurisdiction of Russian courts in cases involving foreign entities includes, in particular, disputes in respect of the state property of the Russian Federation; disputes concerning real estate located in the Russian territory; and disputes related to the registration, in the Russian territory, of patents, trademarks and utility models.

It is notable that recently the number of disputes in Russian courts involving foreign parties has dropped almost by half: thus, in 2018, their number reached 10,900 cases, against 5,900 in 2019. The rate of satisfied claims, however, remains high, having amounted to 92 per cent in 2018 and to 85 per cent in 2019.14

The Russian Constitution reserves the conflict of laws rules for the jurisdiction of the Russian Federation. Among the laws governing relations involving banks and containing such rules, one can distinguish the Russian Civil Code (Part Three), Federal Law No. 173 of 10 December 2003 on Foreign Currency Regulation and Control, Federal Law No. 160 of 9 July 1999 on Foreign Investments in the Russian Federation, and Federal Law No. 39-FZ of 22 April 1996 on the Securities Market.

In July 2019, the Russian Supreme Court released a comprehensive commentary explaining the procedure for applying private international law rules.15 Below, the most essential of those will be outlined.

First, the Russian Supreme Court has preferred a broad interpretation of the principle of the closest connection, that is, courts not only should be guided by the territorial connections between various elements with the law of a specific state, but should also consider, which state's law, if applicable, would achieve the best implementation of the universally recognised principles of the civil law and its separate institutes.

Second, the Russian Supreme Court has affirmed the trend towards narrowing down the scope of the public policy clause; in other words, where the Russian law now has no analogous private law rules or legal institutes that, per se, cannot serve as a ground for using the public policy clause.

Third, in resolving each dispute, courts must clearly distinguish between relying on the law applicable to the contract and other types of law defined by the conflict of laws rules (such as the law applicable to property or legal personality).

Separately, in view of the international trends, the Russian Supreme Court has affirmed that in choosing the law applicable to their contract, the parties may rely on non-national sources (such as the International Institute for the Unification of Private Law (UNIDROIT) Principles of International Commercial Contracts or the Principles of European Contract Law).

Finally, a more liberal approach to the parties' choice of applicable law is now being followed. In other words, courts must ascertain what the parties intended and may establish the existence of an implied agreement on the applicable law (e.g., if the parties referred to certain International Institute for the Unification of Private Law (UNIDROIT) of a specific country in the agreement or are referring to the same applicable law in the statement of claim or response thereto). The choice by the parties of the competent court or seat of international commercial arbitration, however, will not, in and of itself, mean that they can choose the substantive laws of the same state as applicable to the legal relations at issue.

Sources of litigation

The principal operations of banks concern issuing loans, and therefore a considerable portion of all disputes involving banks comprises disputes on the recovery of debt from borrowers and guarantors, as well as on levying execution on pledged assets. Unfortunately, pre-judicial dispute settlement and levying execution on pledges assets are inefficient tools in Russia; hence, banks prefer to go to court.

In general, the loan portfolio of Russian banks has changed in recent years because the general public is increasingly using credit cards, auto (car) loans, mortgages and other types of consumer loans. According to the Bank of Russia statistics,16 since 2015, the number of consumer borrowers has increased by 6.6 million and, in 2019, it reached 39.5 million. Each year, the volume of loans to legal entities continues to grow, while the dynamics for overdue debt remain at the same level. The Bank of Russia's data17 show that the share of bad and distressed debt in the banking sector's loan portfolio amounted to 11 per cent in 2018 and 12.2 per cent in 2019.

The second category of disputes involving banks are the disputes related to bank (independent) guarantees (as security of performance of obligations). Obtaining bank guarantees often serves as a mandatory precondition for contracting business with large enterprises and making state contracts in the Russian market. Such cases are so common that, on 5 June 2019, the Russian Supreme Court released a Review of Court Practice of Resolution of Disputes Related to the Application of the Laws on Independent Guarantees.

We must separately note that banks are active in challenging non-normative acts of the Bank of Russia (such as acts on the violation by a given bank of the mandatory ratios, failure to provide information or provision of incomplete or false information). Recently, the number of such disputes has receded (which might be due to the decrease in the number of banks), yet they still account for an appreciable share of cases initiated by banks.

Finally, the banks' activity in bankruptcy cases should be mentioned. Banks may be debtors, but more frequently they are major creditors for both legal entities and individuals, and they can also act as respondents in cases on challenging transactions.

Over the past few years, the number of bankruptcy disputes in Russia has been multiplying every year; thus, in 2018, commercial courts were seized with around 59,500 bankruptcy cases while, in 2019, their number already reached 85,500.18 Additionally, the majority of such cases were individual bankruptcies that amounted to 50,700 cases in 2019 against 32,400 in 2018.

In bankruptcy cases, interpretation of the rules governing separate banking institutes enables a deeper understanding of such rules, which is exceptionally useful for the practice of applying the law. Therefore, in looking for precedents, it is advisable to pay attention to the practice of courts in bankruptcy cases.

Exclusion of liability

Exclusion of liability of banks in the Russian reality is uncommon, which may be due to the following reasons.

First, banks are business entities; hence, in the majority of cases, their liability will be absolute (i.e., will not require proof of intent) and cannot be reduced.

Second, as already noted above, banks offer most of their services to consumers, that is, the category with which no exclusion of liability is possible.

Third, banks are performing an important macroeconomic function. Exclusion of liability of banks in this case may result in the disruption of the macroeconomic balance because it would mean shifting the risks to other parties engaged in the economic turnover.

According to the Russian Civil Code Article 401(4), any agreement made in advance on the waiver or exclusion of liability for an intentional breach of an obligation is void. In other words, entering into such an agreement will not release a party from liability for deliberate violations of its obligations. No intent in such cases must be proved by the breaching party19 (e.g., by supplying proof of at least minimum care and diligence in the performance of obligations).

In contracts with legal entities, banks may provide for limitations of penalties. However, the concept of liquidated (lump sum) damages, for example, is yet to become operational, and it is rarely applied by courts as it is now. Normally, courts disregard the intent of the parties aimed at providing for lump sum damages in their contract and requalify them instead into a regular penalty.

Regulatory impact

i Change in the key rate of the Bank of Russia

In 2021, the long-standing course of the Bank of Russia towards cutting the key rate has made a U-turn. From 22 March 2021, the key rate of the Bank of Russia began to increase rapidly. On 10 September 2021, the Central Bank of the Russian Federation made a decision to raise the key rate – the principal instrument of its monetary policy – by 25 basis points, to 6.75 per cent per annum.20 This was the fifth time that this indicator was raised in 2021. Since February 2015 when the rate was 17 per cent, the regulator gradually reduced the key rate, with an exception of a slight increase in 2019.

In its press release on the increase of the key rate, the Bank of Russia reported that, in Q2 2021, the Russian economy reached the pre-pandemic level and, according to the bank's assessment, was returning on the path of balanced growth. Under these circumstances and also in view of the increase in prices for daily goods and high inflation expectations, there is a risk of an inflationary spiral. The monetary and credit policy pursued by the Bank of Russia seeks to reduce this risk and bring inflation down to 4 per cent.

The press release also indicates that the Bank of Russia recognises that the key rate may be increased further at its nearest meetings, if the situation develops according to the basic forecast.

Continuation of a similar rise may logically entail an increase in interest rates under loans, a drop in consumption demand and the slowing down of the development of businesses. In response to forecasts on the potential rise of future mortgage rates, Governor Elvira Nabiullina of the Bank of Russia stated that, according to the statistical data, the period of proliferation and popularity of mortgage lending in Russia is now drawing to a close, and it is necessary to strike a balance between the increase in mortgage prices and the income of the population.21

ii The pace of liquidation of banks and new developments for banking

According to data of the Central Bank of the Russian Federation,22 in 2021 (as at 25 September 2021), 33 credit organisations have quit the market: 10 underwent voluntary liquidation, and another 23 organisations had their licences revoked by the Bank of Russia. In comparison, in 2020, the statistics were different: 38 credit organisations went out of business, 22 wound up voluntarily; another 16 credit organisations – namely, 15 banks and one non-banking credit organisation – had their licences revoked by the Bank of Russia. In 2019, 49 banks withdrew from the market: 14 banks underwent voluntary liquidation, 11 banks were merged with other banks, and 24 banks had their licences revoked.

Therefore, the pace at which the Bank of Russia liquidates unscrupulous banks is slowing down. The Bank of Russia's efforts to employ mechanisms other than licence revocations, such as restoring the ability of banks to make payments through participation in their share capitals or attracting investors, are evolving.

Furthermore, an important development in the Russian banking sector is an increase of the share of state-owned banks. According to expert estimates, the share of Russian banks directly or indirectly controlled by the state is almost 70 per cent.23 Since 2017, when the Bank of Russia began implementing the programme for the rehabilitation of credit organisations, many major banks have come under state control; for example, the merger of Otkritie Bank with B&N Bank, Asian-Pacific Bank, Moscow Industrial Bank, and Promsvyazbank. At the same time, representatives of the Central Bank observed the high quality of governance at state-owned banks, including in comparison with privately-owned banks.24 This can be partially explained by the situation in the banking sector that persisted in the 1990s and early 2000s, when many private banks were regulated and poorly managed.

Simultaneously, banks are now moving towards both expanding banking activities beyond their primary banking functions and devleoping banking ecosystems. Banks such as VTB Bank, Alfa-Bank and Tinkoff Bank offer their clients a wide range of financial and non-financial services, which their clients may receive on a 'one-stop-shop' basis. Sberbank, in turn, claims to be not only a bank, but also a fully fledged IT company that sells a wide range of services within one digital ecosystem. Currently, it encompasses, among other services, e-commerce services, logistics services, audio and video streaming platforms, cooked food delivery services, taxi and car sharing, as well as digital healthcare services such as telemedicine, online doctor appointments, home doctor visits, remote monitoring of patients and electronic medical records.25 When providing these services, Sberbank no longer shares the market with other credit organisations but with major IT corporations such as Yandex, which also operates a developed digital ecosystem that includes payment services.

Global digitalisation will likely contribute to the development and strengthening of several large banking ecosystems because these types of systems permit clients to have more accessibility to different services, the costs of which are to be kept at a reduced level.

Outlook and conclusions

Most of the 'anti-covid' measures implemented in 2020, for the purposes of the economy, are now gradually being lifted. The entire economy, including the banking sector, has faced the challenges of restoring normal business operations and preventing new crises. This is also achieved by the Central Bank's policy of raising the key rate, which is intended to prevent the growth of inflation and further undermining of the economy.

At the same time, many developments in the Russian legislation and court practice that are aimed at improving the stability and strength of the financial and banking systems, which were introduced before the covid-19 pandemic, have not lost their relevance but, instead, continue to develop further. These include the movement towards legislative and judicial protection of consumers' rights to banking services, the consumer being the most vulnerable party in financial relationships. There is also increasing movement towards combating bad faith practices. The most remarkable examples of this are the strengthening of control over dubious and illegal transactions, setting incentives for credit organisations to check and prevent such transactions, increasing sanctions for credit organisations in cases where this function is not fulfilled and developments in the field of liability of persons controlling credit organisations. We believe that all the developments mentioned in this review will further evolve both at the legislative level and in court practice.


1 Dmitriy Bazarov is a partner, Anton Pomazan is counsel and Ekaterina Smelkova is an associate at BGP Litigation.

2 The Russian term 'dispositivnost' derives from the Latin word 'dispono' meaning 'to have' or 'to dispose'.

3 Judgment texts can be accessed on the official portal of Russian commercial courts at: (Case No. A40-14903/2020).

4 Judgment texts can be accessed on the official portal of Russian commercial courts at: (Case No. A40-170390/2019).

5 Judgment texts can be accessed on the official portal of Russian commercial courts at: (Case No. A04-8278/2019).

6 Decision of the Moscow Commercial Court of 25 May 2021 in Case No. A40-81401/20.

7 Resolution of the Ninth Commercial Appellate Court of 2 September 2021 in Case No. A40-81401/20.

8 It will enter into force on 30 December 2021 (except for several specific provisions).

9 Information Letter of the Bank of Russia of 13 April 2021 No. IN-01-12/23 'On Criteria for Establishing Indicators of Active Involvement of Credit Organisations in Suspicious Non-Cash and/or Cash Transactions'.

10 'Methodological Recommendations on Approaches for Credit Organisations to Managing Risks of Money Laundering and Financing of Terrorism' (approved by the Bank of Russia on 16 February 2018 under No. 5-MR).

11 Federal Law of 4 June 2018 No. 123-FZ 'On the Ombudsman for the Rights of Consumers of Financial Services'.

12 Official statistics of the Judicial Department with the Russian Supreme Court at:

13 Ruling of the Judicial Chamber on Economic Disputes of the Supreme Court of the Russian Federation No. 305-AD18-18535 of 1 February 2019 in Case No. A40-199212/2017.

14 Official statistics of the Judicial Department with the Russian Supreme Court at:

15 Resolution of the Plenum of the Russian Supreme Court No. 24 of 9 July 2019 on the Application of the Rules of Private International Law by the Courts of the Russian Federation.

16 Bank of Russia Information and Analytical Commentary 'Analysis of Consumer Lending Trends in 2015-2019 Based on Credit History Bureau Data' at:

17 Official Bank of Russia statistics at:

18 Official statistics of the Judicial Department with the Russian Supreme Court at:

19 Resolution of the Plenum of the Supreme Court of the Russian Federation No. 7 of 24 March 2016 on the Application by Courts of Certain Provisions of the Civil Code of the Russian Federation on Liability for Breach of Obligations.

20 Information Statement of the Bank of Russia of 10 September 2021 'The Bank of Russia Increases the Key Rate by 25 B.P. to 6.75% P.A.', website of the Bank of Russia, available at:

22 Data of the official statistics of the Central Bank of Russia, available at

23 See, for example, an estimate by the Deputy Chairman of the Management Board of PJSC Sovcombank Oleg Mashtalyar at

25 Sberbank's official website is

The Law Reviews content