At Delovoy Peterburg newspaper`s request, Dmitry Uryakin has assessed whether the size of the key rate will affect court disputes

Until February 2025, the key rate of the Central Bank of the Russian Federation will remain at 21%, which not only hampers business investments, but also increases the risks of fines and penalties, as the key rate is sometimes also used as a tool to influence unscrupulous contractors.

‘All contracts involving the state include provisions on the liability of the supplier or contractor. The amount is determined, among other things, based on the size of the key rate of the Central Bank of the Russian Federation. In other cases, everything depends on the terms of the contract. As a general rule, to recover interest or penalties under Article 395 of the Civil Code of the Russian Federation (‘statutory penalty’) stipulated by state contracts, the amount of the key rate in effect at the time of the breach of obligation is applied. The increase in litigation is more likely to be due to the fact that the breaching party will simply have no money to pay penalties. I do not believe in the fact that the violators will preventively claim to revise the terms of contracts on liability and its amount,’ Dmitry Uryakin, Senior Associate, Head of General Business Law practice at Maxima Legal, commented for Delovoy Peterburg the newspaper. 

To read the full article (in Russian), please, see Delovoy Peterburg newspaper`s website >>>