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IX СТУДЕНЧЕСКИЙ ЮРИДИЧЕСКИЙ ФОРУМ

The position about unjust enrichment finds a wide, if not unfailing, response in judicial practice. The courts agree that, by its legal nature, a gift certificate is a document confirming the fulfillment by the consumer of the obligation to payfor the goods and providing a counter obligation of the seller to transfer the goods to the buyer. In the event that the seller fails to fulfill the obligation to transfer the goods to the buyer for the amount of the gift certificate, or fulfills the obligation to transfer the goods for a smaller amount, the seller has no grounds for reclaiming theprepayment paid by the buyer under the contract to his property, including for an amount exceeding the value of the transferred goods. The funds retained by the seller in this way are unjust enrichment and must be returned to the buyer1.

Speaking specifically about refundability, in recent years, Rospotrebnadzor, as part of the fight against so-called «non-refundable» gift certificates, including consumercomplaints,oftenbroughttoadministrativeresponsibilitysuchmajorsellersand chain stores as M.Video Management LLC2, ООО «ИвРошеВосток»3& others.

Inallthesecases,commercialcourts(withthesupportoftheSupremeCourt)supported Rospotrebnadzor and, together with the supervisory agency, formed a practice to protect consumer rights.

Taking into account all the above conclusions, the position of the courts and state bodies becomes clear. But some lawyers are ready to argue with this opinion. So, Belov V.A. believes that the ban on the return of funds for a gift card is fully consistent with the law, since such a legal structure is a fairly familiar instrument of legal regulation for consumer relations in Russia: currently there is a list of goods of good quality thatcannotbeexchangedandreturned,whileeconomicandlegalthevalidityofestablishing such a list does not raise any doubts4.

This point of view is understandable, but still it is worth paying attention to the factthat untiltheholder haspresenteda giftcertificate, thecontractbetweentheparties cannot be considered concluded (after all, the buyer may not use it at all), and thereforeitcannotbecomparedwithgoodsthatdonotsubjecttoexchange orreturn, since this failed construction implies that the contract has not only been concluded, but has already been performed.

In any case, there is a risk of missing one important point: it is dangerous not to take into account the vulnerable position of consumers as participants in the relationship under study. It is not always possible for a certificate holder to use it within the

1TheCourtDecisionoftheFirstCourtofCassationofgeneraljurisdictiondated18.11.2020

№88-25691/2020, 2-1544/2019.

2 The Act of the Sixteenth Commercial Court of Appeal dated 19.01.2017 № 16АП5306/2016 in case № А63-7386/2016.

3 The Act of the Eleventh Commercial Court of Appeal dated 01.06.2020 № 11АП4804/2020 in case № А55-36405/2019.

4 Belov V. A. Legal essence of a gift certificate: LLC «Bershka CIS» against the management of Rospotrebnadzor in Moscow (case № А40-А40-202419/17 and А40-226793/17) // Actual problems of Russian law. 2019. № 9 (106). P. 75.

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allotted time, and if you think about what such a certificate replaces: is it possible to settime limits on the use offunds thatwere spent on a gift certificate in this situation? Perhaps the position of Belov V.A. is applicable only if it is a limited collection, in which casetheveryessenceofthesubjectbecomesevenmoreunstableandtoounprofitable for the seller if blind consumer support is allowed.

While continuing to search for a definition of the legal nature of a gift certificate, onehastofacetheopinionofsomescholarsthatagiftcertificateshouldbeconsidered as an option, id est the right to conclude a retail sale contract, and the money contributed by the consumer as a payment for this right. Moreover, according to the law, the payment for an option is not an advance payment for a product or service, but a payment «for the right to make a claim under an option agreement».

However, it would be incorrect for ordinary consumers to use such a legal structure in civil circulation without some kind of clarification. The need for such clarifications is dictated by the importance of preventing the abuse of the right on the part of boththe sellerandthebuyer,in particular, toeliminate thepossibilityofunjustenrichmentattheexpenseofconsumersbyembezzlingthefundspaidbythemforagiftcard, as well as to prevent activities related to the cashing out of funds gift card holders, as well as the creation of additional economically unjustified expenses for gift certificate sellers1.

This means the following: according to the law, the payment for an option is not anadvancepaymentforagoodorservice,butapayment«fortherighttomakeaclaim under an option agreement». The above provision provides that «upon termination of the option agreement, the payment is non-refundable», unless otherwise provided by the agreement. Thus, unscrupulous sellers try to avoid charges of unjust enrichment2. It is worth recognizing, however, that much more often the courts recognize the gift certificate as an advance payment3.

Thus, now a gift certificate is considered as a method of payment under a retail sale agreement, the conclusion of which the consumer has the right to demand from the person who issued the gift certificate (card), but it is worth looking at the model of an option agreement that would protect consumers as a more vulnerable party.

As for the theory about the nature of a gift certificate as a preliminary contract, it seems that it is incorrect to consider it in this way, since:

Firstly, according to par. 23(3) of the Decree of the Plenum of the Supreme Court of the Russian Federation of December 25, 2018 № 49, according to which, if the parties have entered into a preliminary contract for the sale of goods in the future, but at

1 TheRulingoftheDefinitionoftheSupremeCourtoftheRussianFederationот21.11.2014 in case № 305-КГ14-1498, А40-65470/2013.

2 The Act of the Ninth CommercialCourt of Appealdated 13.09.2018 № 09АП-40764/2018 in case № А40-198918/17.

3TheCourtDecisionoftheFirstCourtofCassationofgeneraljurisdictiondated22.10.2020

№88-23659/2020.

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the same time, the preliminary contract provides for the obligation of the buyer to pay the price of the goods or part of it before the conclusion of the main contract, then such a preliminary contract is recognized as a contract of sale with the condition of preliminary payment and rules art. 429 CC RF1 does not apply. And in the case of a gift certificate, the full or partial cost is paid before the conclusion of the main contract. Secondly, according to art. 429 CC RF2: under a preliminary agreement, the parties undertake to conclude an agreement in the future on the terms stipulated by the preliminary agreement. The preliminary contract is recognized as concluded if the condition on the subjectis agreed.As mentioned earlier,duringthepurchase of a certificate, it is impossible to establish the name and quantity of the goods. Also, the preliminary contract assumes that the main contract will be concluded in the future, however, when using a gift certificate, this may not happen. The parties do not have coercion mechanisms in the case of relations arising from the use of a gift certificate.

Nevertheless, there is, albeit ambiguous, judicial practice that recognizes a gift certificate as a preliminary contract.

Thus, the courts recognize the contract as preliminary ifthe provision thatthe gift certificate is a preliminary contract is expressly provided for by the agreement3. There is also a position that a gift certificate is a confirmation of the conclusion of a preliminary contract, under which an advance payment has been made, and not the preliminary contract itself4.

But this position can be debated: after all, the holder may not use the gift certificate; there is no main contract and sometimes it is impossible to establish a written form; the subject of the contract cannot be known, and there is no main contract; this would put the consumer at risk as a weaker party.

1TheCourtDecisionoftheFirstCourtofCassationofgeneraljurisdictiondated22.10.2020

№88-23659/2020.

2 The Civil Code of the Russian Federation (part one) from 30.11.1994 № 51 FZ (ed. from 25.02.2022) (with the additions and amendments, entering into legal force from 01.09.2022) // Russian Newspaper, № 238-239, 08.12.1994.

3 The Appeal ruling of the Nikulinskiy district court of Moscow dated 30.07.2020 № 11303/2020.

4 The Appeal ruling of the Ingodinsky District Court of the city of Chita dated 25.06.2014 in case № 11-33/2014.

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Трапезникова А. В. Университет имени О.Е. Кутафина (МГЮА)

Студент

Impact of Sanctions on International Commercial Arbitration

for Russian companies

Annotation. The institution of international commercial arbitration is vastly widespread when concluding foreign economic transactions and is a universal way of resolving the international economic disputes, but it is extremely susceptible to sanctions. In this regard, it is important to understand the impact of sanctions on the resolution of disputes in the internationalcommercialarbitration.Thepurposeofthisworkistostudytheimpactofthe sanctions policy on the resolution of disputes in arbitration institutions for Russian companies, as well as to determine the risks and prospects of the Russian Federation in the settlement of international commercial disputes.

Keywords: international commercial arbitration, economic sanctions, sanctioned individuals, sanctions policy.

The imposition of sanctions against several Russian legal entities and individuals came as a shock to the global economy and business. This led to the termination of numerous contracts, cancellation of projects, the termination of payments under contracts, suspension of labor migration, restriction of the exchange of information, etc. According to Bloomberg in early March 2022, the Russian Federation officially became themost«sanctionscountry»overtakingIran,SyriaandNorthKorea1.Themostpainful were those sanctions packages that had a direct impact on the restriction of transport and financial services, as well as on the functioning of large Russian companies, which de-facto turned into sanctioning people. At present, it must be recognized that influence extends to most procedural aspects, in particular to dispute resolution issues.

The right to a fair hearing by an independent and impartial court is fundamental need in our modern legal systems and the world legal orders, itis enshrined in international conventions2, covenants3 and national constitutions4. This is one of the basichuman rights in modern legal doctrines and court practice it is interpreted broadly, including in relation to legal entities. The right to a fair trial is closely related to the right

1 Russia Is Now the World's Most-Sanctioned Nation // URL: https://www.bloom- berg.com/news/articles/2022-03-07/russia-surges-past-iran-to-become-worlds-most-sanc- tioned-nation (Date of the application: 10.09.202).

2 Convention of the Commonwealth of Independent States on the rights and fundamental freedoms of the person(26.05.1995) //URL:https://cis-legislation.com/document.fwx?rgn=4669.

3 International Covenant on Civil and Political Rights (16.12.1966) // URL: https://www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_RES_2200A(XXI)_civil.pdf.

4 Constitution of the Russian Federation (12.12.1993) // URL: https://www.consultant.ru/document/cons_doc_LAW_28399/?ysclid=l94lzbin7s145831903.

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to receive qualified legal assistance — the right to defense, which corresponds to the obligationof alawyer to providesuch assistance. His missionis to providetheprincipal with the exercise of the right to defense and a fair trial. In the context of international commercial arbitration, the right of a party to a dispute to be heard (audi alteram partem) is a fundamental principle of «natural justice» the violation of which may serve as a basis for challenging the arbitral award. Obviously, in the absence of the right to receive qualified legal assistance, the right of a party upon a dispute to be heard turns into a fiction. However, a disturbing trend has recently emerged in European law enforcement practice that calls into questioning the above principles. In March 2022, the British magazine The Lawyer conducted a sociological survey among British law firms. When asked whether law firms could defend states «associated with human rights violations», only 42 % of those survey said that «everyone is entitled to legal representation» whereas 55 % of respondents do not agree with this and the rest found it difficult to answer. According to LK Law lawyer Adam Greaves, many firms are wary of potential clients from Russia, regardless of whether they face Western sanctions1. An analysis of legal doctrine and practice leads to the conclusion that there are a number of the most common problems that sanctioned persons may encounter in the process of resolving disputes in international commercial arbitration.

Firstly, there is the question of which seat of arbitration should be chosen considering current and future sanctions. Traditionally, the Russian parties gave preference to largeEuropeancenters.TheHighCourtofLondonwasespecially popularwithplaintiffs from Russia. According to Portland Communications in the 12 months to March 2022, Russians were the second largest group of plaintiffs who used English courts to resolve commercial disputes, second only to British citizens2. However, to date, some parties in several arbitration centers are denied acceptance of claims due to problems with the payment of arbitration costs by sanctioned persons.

Secondly, foreign arbitrators may begin to refuse to participate in Russian related cases upon the fear of being subjected to secondary sanctions. Suffice it to recall the case of JSC VTB Bank vTaruta & Arrowcrest, which is currentlybeingconsideredby the Commercial Court of the British Virgin Islands. In this case, the well-known law firm Ogier represents VTB Bank, against which restrictive measures (sanctions) were taken by multiple foreign states. Ogier wanted to refuse to represent the interests of her client in the process, justifying her position with sanctions restrictions. However, Judge Adrian Jack denied the motion to waive representation, reasoning that the sanction restrictionsare notabsolute and Ogier can obtain a licensefromthe relevantregulator to continue working with the client. The judge in his decision also noted that the firm

1 Russian litigants left struggling to find lawyers for court actions // URL: https://brit- ainnewstime.com/2022/06/05/russian-litigants-left-struggling-to-find-lawyers-for-court-ac- tions/ (Date of the application: 11.10.2022).

2 Commercial Courts Report 2022 // URL: https://portland-communications.com/publica- tions/commercial-courts-report-2022/ (Date of the application: 11.10.2022).

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must represent its client in good faith, using all its skills and abilities («to the best of theirskillandability»).JudgeJack'sdecisionallowsustoexpressthecautioushopethat otherjudgeswilladheretotheruleoflawandnotbebiasedtoaspecificpublicopinion.

Thirdly, the Russian parties will almost certainly give up the choice of English, Swiss,SingaporeanandSwedishapplicablelawthattheyhavetraditionallyusedintheir contracts since they will not be able to hire lawyers and experts or appoint arbitrators from these jurisdictions. It is likely that in the coming years there will be an increase in the use of Russian law in contracts, as well as Hong Kong law and even lex mercatoria. The same change can occur with regard to the choice of the lex arbitri (law of procedure) and hence the preferred seat of arbitration.

Fourth, the ban on the movement of Russian citizens will limit the ability of some Russian parties and consultants to organize and attend hearings in certain states. As a result, the parties will look for more accessible venues for hearings or will use online arbitration where possible.

Fifth, the disconnection of Russian banks from SWIFT makes paying arbitration costs difficult, even impossible. Similarly, Russian arbitrators may find it difficult to receive fees in already completed cases. Such problems will require arbitral institutions to use an alternative currency. Any of the above circumstances may render existing arbitration agreements unenforceable and therefore the prospect of sanction cases being adjudicated under institutional arbitration rules may not be desirable. The current situation will require the revision and adjustment of existing arbitration agreements, the adaptation of the parties to new circumstances and the application of maximum efforts in order toresolve their dispute in arbitration.For example, in the ad hoc format or through consideration of the case by alternative arbitration institutions based on their rules.

The parties have the right to take the necessary measures to reduce the risks associatedwithsanctions.Onesuchmeasureiscascadingarbitrationclauses,wheremultiple arbitral institutions are listed in order of priority sothat, in the event of a dispute, arbitration goes to the highest ranked institutions on the list. If such arbitral institution is unable to resolve the dispute for any reason, the parties agree to refer it to the next arbitral institution on the list, and so on. Also, commercial contracts are increasingly specifying Asian countries and their applicable law as the seatof arbitration. Regarding the payment methods, the parties may agree on alternative payment systems on payment in different currencies and provide for a price adjustment mechanism. Finally, special attention should be paid to force majeure provisions inorder to reduce the potential impact of external circumstances on their contracts.

Inthisway,itisclearthatsanctionsdohaveaseriousnegativeimpactonthescope of international commercial dispute resolution. Over a time, this influence apparently will only increase and therefore the question of developing anti-sanction compliance measures, incl. and in the field of international commercial arbitration, as relevant as ever. The current legal uncertainty, as well as the high degree of risks for sanctioned

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persons, directly indicate the need for a comprehensive legal analysis of the institution of sanctions and their impact on the resolution of international arbitration disputes in the Russian and foreign legal order, as well as the development of universal international legal mechanisms for regulating anti-sanction policy in private legal relations.

Тужилкина П. А., ШтинаС. Д. Университет имени О.Е. Кутафина (МГЮА)

Студенты

The Jury in The Russian Federation: Major Issues and Solutions

Abstract. This article tackles the most important aspects of the jury trial. It contains of a history of this institution in Russia, description the modern jury trial with some countries of Anglo-Saxon legal system. The article reflects main imperfections of this institution in the Russian Federation and there are a number of solutions which are suggested.

Keywords: jury trial, Criminal Procedure Code, juror, democratic institution, guarantees.

The institution of the jury appears to be a significant part ofa criminal (and sometimes civil) procedure in the whole world, including the Russian Federation.

Accordingtoourhistory,trialbyjurywasestablishedintheRussianEmpirein1864 butin1917theSovietgovernmentabolishedit.Subsequently,trialbyjurywasreestablished in Russia by the law of 1992 (Article 67 which proclaims that citizens of the Russian Federation, in accordance with federal law, must participate in the administration of justice as jurors1) and by adopting the new Constitution of Russia, 12 December 1993. Article 47 states that a defendant has the right to have his case examined by a court with the participation of jurors in cases provided for by federal law2.

As for other countries with the jury trial, namely, the USA and the UK, they consider not only criminal, but civil cases.

Referring to the USA, the jury examines criminal cases mainly of serious crimes in the first instance. The jury system is set forth by the Sixth and Seventh Amendment to the Constitution3. Laws governing jury selection vary from state to state.

In the UK, any citizen of the country aged from 18 to 70 years can act as a juror. The main requirements for a candidate are: residence in the United Kingdom, in the

1 Constitution (Basic Law) of the RSFSR of April 12, 1978 (with amendments and additions) (terminated) // LRS ‘Garant’.

2 The Constitution of the Russian Federation» (adopted by popular vote on 12.12.1993) (subject to amendments made by the Laws of the Russian Federation on Amendments to the Constitution of the Russian Federation dated 30.12.2008 No. 6-FKZ, dated 30.12.2008 No. 7- FKZ) // LRS ‘Consultant Plus’.

3 TheConstitutionoftheUnitedStates.Philadelphia.17 September1787.URL:https://constitutionus.com/ (Date of application: 07.03.2022).

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Strait Islands or on the Isle of Man for at least 5 years after he turns 13, he must be included in the voter lists.

At present the jury system in Russia is regulated by the normsof the Criminal Procedure Code. According to the federal law ‘On jurors of federal courts of jurisdiction in the Russian Federation' citizens of Russia have the right to participate in the administration of justice as jurors when the courts of first instance consider criminal cases under their jurisdiction with the participation of jurors. The restriction of this right is established only by federal law1.

Under the law, people may not be jurors and candidates for jurors: those who have not reached the age of 25 by the time of drawing up the lists of candidates for jurors; having a criminal record; recognized by the court as incompetent or limited by thecourtintheirlegalcapacity;registeredinanarcologicalorneuropsychiatricdispensary undergoing treatment for alcoholism, drug addiction, toxicomania, chronic and protracted mental disorders. People are also not allowed to participate in the consideration ofaspecificcriminalcasebythe court inaccordancewiththe procedureestablished by the Criminal Procedure Code of the Russian Federation as jurors: suspects or accusedofcommittingcrimes;donotspeak thelanguageinwhichtheproceedingsare conducted; having physical or mental disabilities that prevent full participation in the consideration of a criminal case by the court2.

It is common knowledge that a trial by jury has its own imperfections, which are actively discussed both by law enforcement practitioners and alarge number of modern scholars.Sharpdiscussionsaroundthisformoflegalproceedingshavenotsubsidedsince the introduction of the jury trial in the Russian Federation. The question arises as to whetherordinarypeoplewithoutspecialskillsandknowledgecanadministerjusticeand find an accused guilty or not guilty is highly debatable. The main reproach leveled at the jury is the large number of acquittals. The reason for this, according to radical critics, is the absolute incompetence of the jury, which is why such a trial cannot be considered fair, right and impartial3. Furthermore, some scholars-specialists reveal disagreements between the right of the jury to decide the question of guilt and whether the defendant deserves leniency. The problem is that the jury has a strict ban on the study of data on the personality of the defendant, which makes it difficult to maintain objectivity when considering crimes. This is because, for instance, in the case of recidivism, it would be fairer to impose on the offender with more severe punishment. In addition, another disadvantageintheconsiderationofacriminalcasebyajuryistheproblemoftheirappearance. The correct course of the process can be violated by an irresponsible and peremptorystatementonthepartofthejurysuchas«I don'twantanymore»orasimplefailure

1 Federal Law ‘On jurors of federal courts of general jurisdiction in the Russian Federation’ No. 113 FZ of 20.08.2004 (as amended on 01.10.2019) // LRS ‘Сonsultant Plus’.

2 The same.

3 Svyatkina Y. A. The moral foundations of the administration of justice with the participation of jurors: MA thesis, Penza State University, 2017. P. 64–79.

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toappearincourt.Thereasonforthisbehavioristhatoftenthepreliminaryinvestigation authorities delay the course of the investigation of criminal cases. Therefore, after a certain time has elapsed, many jurors refuse to appear for further hearings, since the time of such cases quite often goes beyond a reasonable interval. And a person, without prejudice to himself, cannot be distracted from work to fulfill the role of a jury. It is worth noting that in accordance with Article 117 of Criminal Procedure Code a fine up to 2 500 rubles can be imposed on the juryman1, but this fine is not defined as sizeable. In ouropinion,thelackofproperandcorrectconditionsfortheactivitiesofthejurycreates alargenumberofproceduralviolations.Russianlegislationdoesnotregulatetheworking conditionsofajuror.Theexceptionsaretheguaranteesofindependenceandinviolability andtheprocedureforremunerationofhislabor,whicharelegislativelyenshrinedinparticularintheFederalLaw«OnjurorsoffederalcourtsofgeneraljurisdictionintheRussian Federation». But the procedure for the implementation of such guarantees is not establishedbylaw.Whatismore,thereiscurrentlynospecialliteratureforjurors.Inaddition, there is currently no educational work being done with them.Theseissues are discussed quite often, but we do not seeanyvisibleresults.

To solve aforesaid problems of the jury institution in the Russian Federation, the judiciary should pay attention to some innovations. For example, it is necessary to create a system of various types of guarantees in order for the jury to function without interruption. To do this, it is essential not to drag out the trials, to ensure a fair remuneration of jurors, to ensure their real independence, excluding the possibility of shadowing them. It is crucial because the mechanism of a trial by jury can correct the imperfections of other mechanisms of the justice system, but only if its operation is provided with support and attention. In addition, at the time of the administration of justice in Russia, it is necessary to allocate places for jurors tostay in a hotel, for example, at a regional court. This circumstance will help to almost completely avoid bribery, blackmailorassaultingthejurors,andwillreducethelikelihoodofathreattotheirlives during the trial. Thus, jurors will be protected from external influence and will be able to feel safe.

We think that during the performing juror's duties in court, one must be paid remuneration equal to the salary of the crown judge of the relevant court in comparison to present rule which says that a jury's compensation is only a half of judge's salary2.

Besides,aswealreadymentioned,thefineforcourtabsenteeismneedstoberaised. Taking into consideration all mentioned above, the court with the participation of jurors has flaws and at present in Russia it is not ideal, but still necessary, and it is by no means impossible to completely abandon it as it is one of democratic institutions in

Russia which must exist.

1 Criminal Procedure Code of the Russian Federation dated 18.12.2001 № 174 FZ (as amended on 04.03.2022) // LRS ‘Consultant Plus’.

2 Federal Law ‘About jurors of federal courts of general jurisdiction in the Russian Federation’ No. 113 FZ of 20.08.2004 (as amended on 01.10.2019) // LRS ‘Сonsultant Plus’.

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