Russian Civil Code
1. Structure and scope of regulation
The Civil Code of the Russian Federation (Civil Code) was enacted incrementally in four separate parts, beginning 1994, with the chapters and articles being consecutively numbered.
The first part, issued on 21 October 1994, came into force on 1 January 1995. It contains a first section, ‘General provisions’, which covers such matters as ‘basic provisions’, ‘persons’, ‘objects of civil law rights’, ‘transactions and agency’, ‘time limits’ and ‘prescription’; a second section, ‘right of ownership and other rights in rem’; and a third section, ‘General part of the law of obligations’.
The second part was passed on 22 December 1995 and came into force on 1 March 1996. It includes the fourth section of the Civil Code governing contractual obligations (chs 30 to 58), as well as the law of torts (ch 59) and unjustified enrichment (ch 60). The different types of contracts are characterized by detailed and specific provisions. They cover not only standard matters such as contracts of sale and contracts of work but also subjects such as annuity and life estate (ch 33), performance of research, (ch 38), carriage (ch 40), freight forwarding (ch 41), financing against assignment of a monetary claim (ch 43), bank deposit (ch 44), bank account (ch 45), settlement of accounts (payments) (ch 46), insurance (ch 48), agency (ch 49), trust administration of property (ch 53), and franchising (ch 54).
The third part, adopted on 11 November 2001, came into force on 1 March 2002; it encompasses the law of succession and private international law (PIL).
The fourth and final part of the new Civil Code was adopted on 18 December 2006 and came into force on 1 January 2008. It governs the law of intellectual property in a comprehensive manner by inserting all legal norms related thereto into the Civil Code.
There is no separate codification of commercial law in Russia. The Civil Code applies equally to natural persons, who are described as ‘citizens’ (see the title of ch 3), and to merchants. However, for the latter there are some diverging rules, eg Art 401, concerning liability. Furthermore, the Civil Code contains provisions that are intended to provide consumer protection. Decisive for the granting of protection is not the characteristic of being a consumer, but rather the situation in which one of the contracting parties typically holds a stronger position than the other party (eg provisions regarding general terms and conditions, Art 128, or provisions regarding retail trade, Arts 492 ff). In addition, there is a statute entitled ‘On the Protection of Consumer Rights’ that contains private law provisions as well as public law provisions.
Family and labour law are laid down in separate acts, namely the Family Code of 29 December 1995 and the Labour Code of 30 December 2001.
2. Historical background
The present codification of private law in Russia is the result of a process of radical change that began in the early 1990s and in which all of eastern Europe was involved. With the fall of the Soviet Union in 1991, Soviet private law, designed for the socialist planned economy, became obsolete. This social change resulted in the rapid development of a market economy, requiring a comprehensively reshaped private law regime.
Against the background of social transformation, the codification of private law faced a number of particular challenges: the rapid economic and social changes demanded an urgent re-codification of private law. At the same time, this transformation process was unprecedented, resulting in the lack of a conceptual foundation for the draft. Because of the rapid and radical change of the social situation, there was no option for a slow development of the new Russian Civil Code or an incremental adaptation to the new conditions. The Code actually had to foresee the coming economic and social developments; to some extent it is supposed to be a codification for a fully developed market economy before such market economy has been put in place. The codification was a result of that transition period, influenced by society’s difficulties in finding orientation, yet nonetheless trying to be a stable, precise and modern act of legislation. It was expected to herald the abandonment of the Soviet planned economy, substituting the basic conventional elements of the socialist legal culture with new principles of private law; hence, it was designed to become a central element of reform.
The work on the new Civil Code began shortly after the fall of the Soviet Union in December 1991. The Research Centre for Private Law under the President of the Russian Federation was charged with leading the preparation of a draft. The centre is a state-run academic institution that was established by order of the president of the Russian Federation on 27 December 1991. It is subordinate to the president and mostly staffed by salaried jurists. For the elaboration of the draft, an expert group, mainly consisting of leading Russian jurists, was created. But also western jurists, primarily Dutch lawyers, were consulted, particularly for the elaboration of the first two parts. All four parts of the Civil Code are characterized by an effort to take account of the most modern experiences. Nonetheless, this did not lead to the blind adoption of foreign law. Despite some impulses and occasional borrowings from different legal systems, the Russian Civil Code is an independent piece of work firmly planted in the Russian private law tradition.
3. Continuity and breaks in the development of Russian private law
Russian private law is characterized on the one hand by two distinctive turning points in its development, the October Revolution of 1917 and the fall of the Soviet Union in 1991, and on the other hand by an astonishing continuity considering the significance of these two occasions.
Pre-revolutionary Russian private law was impeded in its development by the absolute reign of the Tsar and, compared with the rest of Europe, by the country’s antiquated economic and social environment. Nevertheless, there was a developed doctrine in the area of private law that was part of the continental European tradition. Thus, at the beginning of the 20th century the draft of a Civil Code, influenced by the ideas and experiences of contemporary western European codifications, was prepared. Before World War I, German professors, due to intergovernmental agreements, contributed to the education of Russian jurists and to the promotion of Russian jurisprudence. The Russian seminar for Roman law in Berlin can be mentioned as an example. It existed from 1887–96 and was designed to train lecturers for law faculties in Russia. The seminar brought forth a number of distinguished alumni, among them LI Petražickij, AS Krivcov and IA Pokrovskij, whose works, almost forgotten in the era of the Soviet Union, have been rediscovered in recent years and have thus influenced Russian legal studies in the field of private law to the present day.
After the October Revolution, private law was instrumentalized to suit the purposes of the communist ideology. During that period, private law was no longer a means of solving conflicts between private subjects but was predominantly used as a mechanism for control and regulation. The individual’s rights were subordinated to the interests of the state. The planned economy and the leading role of the communist party were declared to be the basic principles of the socialist private law.
However, the private law tradition was not completely broken. In 1922, in the course of the ‘New Economic Policy’ (NEP), the Civil Code of the Russian Soviet Federative Socialist Republic (RSFSR), based considerably on the pre-revolutionary draft, was written and put into force. The continuity was maintained by the subsequent Civil Code of the RSFSR of 1964, inheriting many provisions from its predecessor of 1922. Thus, both Civil Codes of the RSFSR contained, notwithstanding a more than noticeable ideological alignment, a core of ‘ordinary’ private law provisions.
Nonetheless, the importance of private law in the socialist legal system was far less than the existence of a codification would suggest. The cooperation between state-owned businesses was, de jure, governed by private law provisions. Nevertheless, the real impact of those provisions was reduced to a formal minimum in favour of the governmental administration. Transactions between citizens were mostly relegated into an underground economy. The Civil Code of the RSFSR allowed merely a restricted and rudimentary private property that was subordinated to public property (see Preamble; Arts 93, 105 ff). The Code also prohibited Russians to generate income from sources other than labour (Art 93).
Russia’s transition to a market economy, initiated by Gorbachev’s reforms, was the second turning point in the development of the private law. In the course of those reforms, the Fundamental Principles of Civil Legislation of the USSR, dated 31 May 1991, which already included provisions adapted to a market economy, were enacted. They were to have been put into force on 1 January 1992, but became obsolete with the fall of the USSR in December 1991. However, on the basis of a decision of the Supreme Soviet of the Russian Federation from 14 July 1992, the principles supplemented Russia’s private law legislation in the transition period. Subsequently, the current Russian Civil Code accomplished the systemic change.
The reorientation of private law legislation did not constitute an entire break with legal tradition. From its very beginning to the present day, the new private law which has emerged reflects a variety of influences from the private law that had been taught and practised during the time of the Soviet Union, since the authors of the legislative proposals and other leading contemporary Russian jurists had been educated in the Soviet law.
The continuity of private law development becomes apparent when comparing the structure of the Civil Code of the Russian Federation with the Civil Code of the RSFSR from 1964. Besides provisions covering a general part, property law, contract law, and the law of succession, the Civil Code of the RSFSR comprised, as does the present Civil Code, provisions concerning intellectual property (it was then, however, only addressing copyright and the law of inventions), and also provisions regarding foreign persons, which can be seen as forerunners of the private international law provisions of the Civil Code. Due to ideological reasons, family law and labour law were not included in the Civil Code of the RSFSR. They were enacted in separate codes. According to the then-predominant doctrine in socialist law, unlike the law in capitalist countries, those fields of law were not characterized by patrimonial relations; thus, they were independent parts of the law and outside of the scope of the normal private law. In spite of the ideological change, the Russian Civil Code has kept the tradition of separating them from the Civil Code.
Furthermore, the general parts of the two codes show significant structural similarities. Some of the provisions of the Soviet Civil Code of the RSFSR not directly linked to the socialist economic and social system have been adopted (partly literally) into the new Civil Code.
In contrast to the socialist law, property plays an important role in the present Civil Code of the Russian Federation. The Code provides for effective legal protection and equal treatment for all owners of property. However, there are still some property law provisions originating from the socialist law. This includes Art 212 of the Civil Code, which describes different kinds of property, ie private property, public property, municipal property and other forms of property, as well as rights in rem, such as ‘the right of economic management’ and ‘the right of operational administration’, which can be granted to the state or municipal enterprises (Arts 216, 294 ff Civil Code).
4. The Civil Code as the economic constitution of Russia
The Russian Civil Code was drafted as ‘the general framework’ for the entire system of private law. Therefore, it commences with provisions of a constitutional nature, which include basic principles, in particular the economic liberties (Art 1), and provisions concerning jurisdiction in the area of private law legislation as well as concerning the hierarchy between norms (Art 3).
Article 1 Part 1 of the Civil Code cites as the ‘principles, on which the civil legislation is based’, the equality of participants in private law relations, the inviolability of property, freedom of contract, the impermissibility of arbitrary interference in private matters, and the unimpeded exercise and protection of private rights.
Part 2 specifies the principle of freedom of contract and provides for requirements in terms of which civil rights, whose origin is governed by Art 8 of the Civil Code, can be restricted. Article 3 Part 3 of the Civil Code ensures the free circulation of goods, services and capital in the territory of the Russian Federation and defines the circumstances under which they may be restricted.
Article 3 of the Civil Code restates the constitutional allocation of legislative competence for private law. According to Art 5(1) of the Russian Constitution, Russia (this appellation of the country is equivalent to ‘Russian Federation’, according to Art 1(2) of the Constitution) has a federal structure. It comprises ‘republics, regions, areas, federal cities, an autonomous region and autonomous areas’ as equal subjects of the Federation, all of which, according to Art 73 of the Constitution, are in possession of full governmental authority outside the scope of the Federation’s competence. According to Art 71(n) of the Constitution, private law legislation, including the law of intellectual property, falls under the jurisdiction of the Federation.
Additionally, Art 3 lays down requirements under which decrees of the president and regulations of the government in the area of private law can be passed. Furthermore, it regulates the hierarchy of civil law provisions. The Civil Code takes on a quasi-constitutional status within private law legislation, as according to Art 3(2) 2 of the Civil Code private law provisions of other legislative acts have to be consistent with the codification. Executive acts in the area of private law must not contradict the codification and other federal statutes.
This status of the Civil Code can first of all be explained on the basis of the situation in which the latter originated. It was thus possible to regulate specific questions at an early time and, by doing so, to provide a framework for the further development of Russian private law while postponing the finalization of the details to a later date. This approach was intended to ensure a certain stability of the transitional legislation. Moreover, it seemed to be adequate, in connection with the competence provisions, to prevent an erosion of private law by non-legislative acts, as had often happened in the Soviet Union. A similar private law structure can be found in the civil codes of other countries participating in the Commonwealth of Independent States (CIS) (eg the civil codes of Uzbekistan (Art 3); Tadzhikistan (Art 2(1)); Ukraine (Art 4(2)); Kazakhstan (Art 3(2)); Kirghizia (Art 2(4)). However, it must be taken into consideration that the predominant position of the Civil Code in the provisional hierarchy is in no way confirmed by the Constitution. The Civil Code is enacted as a federal statute, according to Art 105 of the Constitution of the Russian Federation, and cannot, therefore, claim to prevail over other federal statutes in the area of private law. Nevertheless, the Russian doctrine seems to grant the Civil Code a certain superiority over other private law legislation. The Civil Code is considered in parts of Russian doctrine a primus inter pares, which is to prevail in case of collision with other federal legislation.
5. Interim summary and outlook
All in all, it may be said that the Russian Civil Code is a codification from a transitional period, incorporating a number of influences from the socialist law. These include, among others, the aforementioned different categories of property as well as extensive provisions regarding form and parts of public law such as confiscation (Art 243) and requisitioning (Art 242). Some provisions, for instance the coexistence of limited liability companies and closed joint stock companies, reflect the uncertainty that existed at the time of their drafting. Nevertheless, the codification has provided significant incentives for the development of private law.
However, the further development of the Russian Civil Code through the jurisprudence of the courts has only been carried out hesitantly. The reason for this seems to lie in the heritage of Soviet legal practice. The state structure of the Soviet Union was based on councils, to which the separation of powers was unknown. The undivided government authority was headed by the practically omni-competent Supreme Soviet (Council), whose steering committee was authorized to interpret the laws according to Art 121 No 5 of the Soviet Constitution of 1977. Those interpretations had official and binding effect, although that was nowhere explicitly stated. As a result, the function of the courts was restricted. They were obliged in the first place, to apply the law according to its letter.
The recent Constitution of the Russian Federation provides for a separation of powers in Art 10. Nonetheless, an independent judiciary, capable of instigating an evolution of private law by its case law still has to establish itself. It has to be noted that even today the prevailing opinion in Russian private law scholarship regards a teleological interpretation, deviating from the wording of the law, as inadmissible. The potential of a more liberal approach to interpretation is further impeded by the fact that there is no general principle of good faith in Russian private law. Good faith is only applied when there is a legal gap that cannot be filled by way of analogy (Art 6(2) Civil Code).
A special role in the development of private law is played by the Russian Supreme Courts: the Supreme Court, presiding over the courts of general jurisdiction, and the Supreme Commercial Court, presiding over the state commercial courts (in Russian: arbitrazhnye sudy, also courts of arbitrage). According to Arts 126 and 127 of the Constitution of the Russian Federation, the Supreme Courts are authorized to issue explanations concerning the interpretation of the law. These explanations are issued wholly independent of particular legal disputes by means of letters of information, or overviews of the judicial practice. The resolutions (postanovlenija) of the plenum of the Supreme Commercial Court are binding, according to Art 13 No 2 of the Act ‘On the Commercial Courts’. The decisions of the Supreme Court have a de facto binding effect.
The further development of Russian private law is, in the first place, a matter for the political process. In July 2008, the Russian president Dmitrij Medwedew signed a presidential decree (ukaz) calling for a revision of the Civil Code. The Research Centre for Private Law under the President of the Russian Federation as well as the Council for the Codification and Perfection of the Civil Legislation under the President of the Russian Federation, which was founded on 5 October 1999 by decree of the president, were instructed to draft a concept for the development of private law by 1 June 2009 and to instigate a broad public discussion of that concept. The objectives of this private law reform, as stated in the presidential decree, are the adaptation of civil legislation to the economic development, taking account of the judicial application of the law, the adjustment to the law of the European Union, as well as the maintenance of uniformity of the private law regulations in the countries participating in the Commonwealth of Independent States (CIS). The reform process of the Civil Code has proceeded in two stages. At first, seven working groups were formed. These groups drafted discussion papers for different areas of civil law which were completed by spring 2009 and which were then integrated into a general conception of the revision of the Civil Code by autumn 2009. All of the working papers and the general conception were published on the internet and in law journals. After this, the working groups formulated proposals for the amendment of the Civil Code, which were published as well. Although the proposals became the subject of controversial discussion, the ongoing reform of the Civil Code does not seem to bring revolutionary changes to Russian civil law but instead develops it by carrying forward the existing legal tradition.
Hans Arnold, ‘Zivilgesetzbuch der Russischen Föderation im Entstehen’ (1995) RIW 897; Oleg Sadikov, ‘Das neue Zivilgesetzbuch Rußlands’ (1996) ZEuP 259; Stefanie Solotych, Das Zivilgesetzbuch der Russischen Föderation. Erster Teil. Textübersetzung mit Einführung (1996); Lane H Blumenfeld, ‘Russia’s New Civil Code: The Legal Foundation for Russia’s Emerging Market Economy’ (1996) 30 Int’l Law 477; Rolf Knieper, ‘Stability and Transition in the Civil Code of the Russian Federation’ (1999) 44 McGill LJ 259; Leigh Sprague, ‘Russia’s Civil Code (Diamond in the Rough): A Model Code in a Dysfunctional State’ (2000) 7 J East Euro Law 1; Christopher Osakwe, Russian Civil Code ; Stefanie Solotych, Das Zivilgesetzbuch der Russischen Föderation. Zweiter Teil. Textübersetzung mit Einführung ; Evgenij A Sukhanov (ed), Graždanskoe pravo, vol I–IV (2006); Tamara E Abova, Postatejnyj kommentarij k graždanskomu kodeksu Rossijskoj Federacii (2007).
Civil Code RSFSR from 11 June 1964, Vedomosti verchovnogo soveta RSFSR, 1964, No 24, Pos 406; Basic principles of the private law legislation of the USSR and the Republics from 31 May 1991, Vedomosti S’ezda narodnych deputatov SSSR i Verchovnogo Soveta SSSR, 1991, No 26, Pos 733; Statute ‘Regarding the protection of consumer rights’ No 2300-1 from 7 February 1992, Vedomosti Soveta narodnych deputatov i Verchovnogo Soveta RF, 1992, No 15, Pos 766; Russian Civil Code Part 1, Federal’nyj zakon (Federative Law, FZ) No 51 from 30 November 1994, Sobranie Zakonodatel’stva Rossijskoj Federacii (SZ RF) 1994, No 32, Pos 3301; Family Code, FZ No 223 from 29 December 1995, SZ RF 1996, No 1, Pos 16; in English: Christopher Osakwe, Russian Civil Code (2000); Labour Code, FZ No 197 from 21 December 2001, SZ RF 2002, No 1, Part 1, Pos 3; Russian Civil Code Part 2, FZ No 14 from 26 January 1996, SZ RF 1996, No 5, Pos 410; in English: Christopher Osakwe, Russian Civil Code (2000); Russian Civil Code Part 3, FZ No 146 from November 26, 2001, SZ RF 2001, No 49, Pos 4552; in English: Peter B Maggs, The Civil Code of the Russian Federation, Part 3 (New York, 2002); Russian Civil Code Part 4, FZ No 230 from 22 December 2006, SZ RF 2006, No 52, Pos 5496; in English: Peter B. Maggs and Alexei N. Zhiltsov, Civil Code of the Russian Federation, Part 4 (Moskau, 2008); Conception of the development of Civil Law of the Russian Federation: Vestnik Vysshego Arbitrazhnogo Suda 2009, No 11, 6-99.