St Petersburg University hosts a discussion on innovative ways of resolving economic disputes

The Mediation Centre of St Petersburg University

For a third time, the conference brought together participants from more than ten countries, including the Republic of Belarus, China, India, Argentina, Brazil, Turkey, Austria and Italy.

Opening the meeting, Marina Lavrikova, Senior Vice-Rector for Academic Activities of St Petersburg University, focused on the interdisciplinarity of the topics discussed at the conference. This creates an opportunity to resolve disputes in a wide range of fields. She is convinced that the increase in social tensions in society shall give an impetus to the development of mediation theory. St Petersburg University is moving in the same direction. For many years, St Petersburg University has been training specialists in mediation and developing new programmes: from mediation proceedings to incorporating basic elements of mediation into academic programmes in other fields of study and clinics as a form of education.

Sergei Belov, Dean of the Faculty of Law of St Petersburg University, noted that mediation is one of the most effective methods of resolving disputes. This enables the parties to maintain relationships and trust. He added that the conference’s focus on mediation in public law disputes indicates the readiness of the state to implement procedures for reconciling interests and resolving conflicts peacefully.

This is a significant step towards civilised economic, political and social relations.

Sergei Belov, Dean of the Faculty of Law of St Petersburg University

The use of mediation procedures, including in disputes with public authorities, has been developing rapidly over the last year. Disputes between government agencies and individuals, which used to be resolved exclusively through court proceedings, are now successfully resolved by alternative methods. ‘In the spring, the Mediation Centre of St Petersburg University successfully conducted a mediation procedure between a private company and the tax authorities. As a result, the parties came to an agreement, which has now been implemented: taxes have been paid to the exchequer, and the taxpayer has ceased to be a high-risk entity,’ said Evgeniia Vaskova, Director of the Mediation Centre of St Petersburg University.

More importantly, since 2019, Russian legislation has made it possible to notarise a mediation agreement if the mediation procedure was carried out before the parties went to court. ’Such a document acquires the force of a writ of execution,’ explained Evgeniia Vaskova. ’These changes have motivated many of the clients of the Centre to include a mediation clause in their contracts. According to this clause, when disputes and/or disagreements arise, the parties to the contract will seek the assistance of a mediator.’

In today’s world, the scope of mediation in pre-trial and out-of-court disputes is expanding. It is in accordance with evolving trends in law, the need to regulate new areas of social relations, the challenges faced by the legal community and the digital environment.

Denis Kolos, Judge of the Eurasian Economic Union Court

The conference participants noted that the banking sector is increasingly resorting to mediation. Alexey Chirkov is Head of the Regulatory Division of the Service for Consumer Protection and Financial Inclusion of the Central Bank of the Russian Federation. He explained that legislation cannot provide for all the situations that a bank customer may encounter. He referred to foreign currency mortgages, which many Russians used to have ten years ago. Problems with mortgage payments began after the depreciation of the rouble and the consequent increase in debt, often by several times. In such situations, mediation is often the only solution. The borrower is presented with a feasible payment scheme and an easy-to-understand debt repayment algorithm. Alternatively, a client can ask the bank for a loan repayment holiday if their income has decreased by 30%. The experts point out that this legal ceiling does not allow for flexible resolution of the issue as even a 29% reduction in income will not be enough to postpone repayment in this case. This is another situation where mediation can be of assistance to banks and citizens.

Mediation techniques are also highly effective in the sphere of urban planning, including: landscaping; new construction, reconstruction and renovation of urban areas; and implementation of major infrastructure projects. They are effective even when reconciling the interests of regional, federal and local authorities, and in conflicts between the authorities and local communities and developers. For example, experts suggested that the conflict concerning Rubinstein Street in St Petersburg, rooted in the unwillingness of local residents to tolerate the presence of bars and restaurants, could have been resolved using hybrid forms of mediation. Furthermore, the conference participants suggested the concept of participatory design, which involves residents in the decision-making process regarding urban spaces. Such a dialogue could be built on the principles of mediation and preventive measures for conflict resolution.

The important advantages of the mediation procedures highlighted during the conference include flexibility and speed. Unlike court proceedings, which can last for several years, mediation is not a formalised procedure. The out-of-court settlement of disputes has traditionally been much quicker.

Today, mediation is regulated by the Federal Law ’On alternative procedure of dispute resolution with participation of a mediator (mediation procedure)’. The amendments that the Ministry of Justice of the Russian Federation proposes to introduce into the law will soon be subject to public discussions. Inga Melikyan is Deputy Director of the Department for Legal Advice and Cooperation with the Judicial System at the Ministry of Justice of the Russian Federation. She spoke about the tremendous work done by the Ministry of Justice during the year to systematise the current mediation practice and create a unified regulatory framework in this area. The changes will: affect the requirements for mediators and their coordination mechanism; facilitate the protection of the rights of citizens and organisations; and reduce the burden on the judicial system.