Supreme Arbitrazh Court clarifies Russian pledge legislation
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On 11 March 2011 a clarificatory directive of the Plenum of the Supreme Arbitrazh Court of the Russian Federation (Visshiy Arbitrazhnyi Sud or VAS) No. 10 of 17 February 2011 "On certain aspects of application of pledge legislation" was published. The VAS clarifications were much awaited in order to resolve the issues of interpretation of some ambiguous provisions of the substantial amendments to the pledge legislation adopted at the end of 2008 , relating mainly to out-of-court enforcement of Russian pledges and mortgages. Apart from the issues connected with out-of-court enforcement of Russian security, the VAS has also clarified some other issues concerning application of pledge legislation, which had not received consistent interpretation by Russian courts.
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This client briefing outlines clarifications of the VAS on the main issues of application and interpretation of the pledge and mortgage legislation contained in the VAS clarifications and discusses the benefits and drawbacks of these clarifications for secured assets located in Russia.