The Civil Code of the Russian Federation

(with the Additions and Amendments of February 20, August 12, 1996,
October 24, 1997, July 8, December 17, 1999, April 16, May 15,
November 26, 2001, March 21, November 14, 26, 2002,
January 10, March 26, November 11, December 23, 2003)

Part III
Section VI
Chapter 68
The Law Governing Proprietary and Personal Non-ProprietaryRelations

Chapter 68. The Law Governing Proprietary and Personal Non-ProprietaryRelations

Article 1205. General Provisions Concerning the Law Governing Rights in Rem


1. The content of a right of ownership and other rights in rem relating to immovable and movable property, the exercise and protection thereof shall be determined according to the law of the country where such property is located.
2. Property shall be classified as immovable or movable in compliance with the law of the country where such property is located.

Article 1206. The Law Governing the Emergence and Termination of Rights in Rem


1. The emergence and termination of a right of ownership and other rights in rem relating to property shall be determined by the law of the country where such property was located as of the time when the action was committed or another circumstance occurred which served as a ground for the emergence or termination of the right of ownership or other rights in rem, except as otherwise required under law.
2. The emergence and termination of a right of ownership or other rights in rem relating to a deal concluded in respect of property en route shall be determined by the law of the country from which the property has been dispatched, except as otherwise required under law.
3. The emergence of a right of ownership or other rights in rem in respect of property by virtue of acquisitive prescription shall be determined by the law of the country where the property was located as of the time of expiry of the acquisitive prescription term.

Article 1207. The Law Governing Rights in Rem Relating to Aircraft, Vessels and Spacecraft


An ownership right and other rights in rem in respect of aircraft, sea vessels, inland navigation vessels, space craft subject to state registration, the exercise and protection of such rights shall be subject to the law of the country where such aircraft, vessels and space craft are registered.

Article 1208. The Law Governing Statute of Limitations


The statute of limitations shall be determined by the law of the country governing a relation in question.

Article 1209. The Law Governing the Form of Transaction


1. The form of transaction shall be governed by the law of place of conclusion. However, a transaction concluded abroad cannot be declared null and void because of a failure to comply with the form, if the provisions of Russian law have been observed. The rules set out in Paragraph 1 of the present item shall be applicable, in particular, to the form of powers of attorney.
2. The form of a foreign trade transaction in which at least one party is a Russian legal entity shall be governed by Russian law, irrespective of the place where the transaction was concluded. This rule shall be applicable, in particular, in cases when at least one of the parties to such a transaction is a natural person pursuing entrepreneurial activities whose personal law under Article 1195 of the present Code is Russian law.
3. The form of a transaction relating to immovable property shall be governed by the law of the country where the property is located and in respect of an immovable property recorded in a state register of the Russian Federation, by Russian law.

Article 1210. Selection of Law by the Parties to a Contract


1. When they enter into a contract or later on the parties thereto may select by agreement between them select the law that will govern their rights and duties under the contract. The law so selected by the parties shall govern the emergence and termination of a right of ownership and other rights in rem relating to movable property with no prejudice for the rights of third persons.
2. An agreement of parties as to the selection of law to be applicable shall be expressly stated or shall clearly ensue from the terms and conditions of the contract or the complex of circumstances of the case.
3. Selection of applicable law made by parties after the conclusion of a contract shall have retroactive effect and it shall be deemed valid, without prejudice for the rights of third persons, beginning from the time when the contract was concluded.
4. The parties to a contract may select applicable law both for the contract as a whole and for specific parts thereof.
5. If it ensues from the group of circumstances of a case that were in existence as of the time of selection of applicable law that the contract is actually connected with only one country the parties' selection of the law of another country shall not affect the imperative norms of the country with which the contract is actually connected.

Article 1211. The Law Governing a Contract in the Case of Lack of Parties' Agreement on Applicable Law


1. Where there is no agreement of parties on applicable law, the contract shall be subject to the law of the country with which the contract has the closest relation.
2. The law of the country with which a contract has the closest relation shall be deemed the law of the country where the party responsible for the performance under the contract of crucial significance for the content of the contract has its place of residence or main place of business, except as otherwise ensuing from the law, the terms or substance of the contract or the group of circumstances of the case in question.
3. A party responsible for the performance under a contract of crucial significance for the content of the contract shall be a party which, in particular, is the following, except as otherwise ensuing from law, the terms or substance of the contract or the group of circumstances of the case in question: 1) a seller - in a sales contract;
2) a donor - in a donation contract;
3) a lessor/landlord - in a lease;
4) a lender - in a contract of gratuitous use;
5) a contractor - in a contract;
6) a carrier - in a carriage contract;
7) a forwarding agent - in a forwarding contract;
8) a lender (a creditor) - in a loan (credit) contract;
9) a financial agent - in a case in action assignment financing contract;
10) a bank - in a bank deposit contract and bank account contract;
11) a custodian - in a custody contract;
12) an insurer - in an insurance policy;
13) an agent - in a contract of agency;
14) a commission agent - in a contract of commission agency;
15) an agent - in a contract of agency service;
16) a franchisor - in a contract of franchise;
17) a mortgagor - in a mortgage contract;
18) a surety - in a suretyship contract;
19) a licensor - in a licence contract.
4. The law of the country with which the contract has the closest relation shall be as follows, except as otherwise ensuing from law, the terms or substance of the contract or the complex of circumstances of the case: 1) for a contract of independent building contractor work and a contract of independent design and prospecting contractor work - the law of the country where on the whole the results stipulated by the contract are created;
2) for a contract of general partnership - the law of the country where on the whole the activity of the partnership is pursued;
3) for a contract concluded by auction, tender or commodity market - the law of the country where the auction, tender is held or the commodity market is situated.
5. A contract that has features of various types of contract shall be subject to the law of the country with which this contract as a whole has the closest relation, except as otherwise ensuing from law, the terms or substance of the contract or the group of circumstances of the case in question.
6. If internationally accepted trading terms are used in a contract it shall be deemed, unless there are directions to the contrary in the contract, that the parties have agreed on their application to their relations of business transaction usage designated by relevant trading terms.

Article 1212. The Law Governing a Contract with Participation of a Consumer


1. Selection of the law governing a contract whereto a party is a natural person using, acquiring or ordering or intending to use, acquire or order movable things (works, services) for personal, family, household or other purposes and not connected with the pursuance of entrepreneurial activity shall not cause deprivation of the natural person (consumer) of remedies relating to his/her rights which are provided by imperative norms of the law of the country where the consumer has place of residence if any of the below circumstances have occurred: 1) in that country the conclusion of the contract had been preceded by an offer addressed to the consumer or an advertisement and the consumer has committed in the same country actions required for the purpose of entering into the contract;
2) a contract partner of the consumer or a representative of such a partner has received an order from the consumer in that country;
3) an order for acquisition of movable things, performance of works or provision of services has been made by the consumer in another country visited on the initiative of a contract partner of the consumer, if such an initiative was aimed at encouraging the consumer to enter into the contract.
2. If there is no agreement of the parties as to applicable law and if there are the circumstances specified in Item 1 of the present article the law of the country where the consumer has place of residence shall govern the contract with the participation of a consumer.
3. The rules established by Items 1 and 2 of the present article shall not be applicable to: 1) a carriage contract;
2) a work performance contract or a service provision contract if the work is to be performed or the service to be provided exclusively in a country other than the country where the consumer has place of residence.
The exemptions specified in the present item shall not extend to contracts for the provision of the services of carriage and accommodation for a single price (irrespective of the inclusion of other services in the single price), in particular, tourist service contracts.

Article 1213. The Law Governing Contracts Relating to Immovable Property


1. Where there is no agreement of parties on applicable law in respect of immovable property, the law of the country with which the contract has the closest relation shall apply. The right of the country with which the contract has the closest relation shall be deemed the law of the country where the immovable property is located, except as otherwise ensuing from law, the terms or substance of the contract or the set of circumstances of the case in question.
2. Contracts relating to plots of land, tracts of sub-soil, isolated bodies of water and other immovable property located on the territory of the Russian Federation shall be subject to Russian law.

Article 1214. The Law Governing Contracts for the Formation of a Legal Entity with Foreign Interest


A contract for the formation of a legal entity with foreign interest shall be subject to the law of the country in which the legal entity is to be founded.

Article 1215. The Applicability of Law Governing a Contract


The following shall be in particular determined by the law governing a contract in keeping with the rules of Articles 1210 - 1214, 1216 of the present Code:
1) the construction of the contract;
2) the rights and duties of the parties to the contract;
3) performance under the contract;
4) the consequences of a default on performance or improper performance under the contract;
5) the termination of the contract;
6) the consequences of invalidity of the contract.
Articled 1216. The Law Governing Assignment of a Claim
1. The law governing a claim assignment agreement between the initial and new creditors shall be determined in compliance with Items 1 and 2 of Article 1211 of the present Code.
2. The admissibility of a claim assignment, relations between the new creditor and the debtor, the conditions for the claim to be presented to the debtor by the new creditor and also the issue of the debtor's appropriate performance under his obligation shall be determined by the law applicable to the claim being the subject matter of the assignment.

Article 1217. The Law Governing Obligations Emerging from Unilateral Transactions


Except as otherwise required by law, the terms or substance of the transaction or the set of circumstances of the case in question, obligations emerging from unilateral transactions shall be governed by the law of the country where the party assuming obligations under a unilateral transaction has place of residence or main place of business.
The effective term of powers of attorney and the grounds for declaring it null and void shall be determined by the law of the country where the powers of attorney were issued.

Article 1218. The Law Governing the Relations of Payment of Interest


The grounds for collecting, the calculation procedure and the rate of interest on pecuniary obligations shall be governed by the law of the country governing a given obligation.

Article 1219. The Law Governing Obligations Emerging as a Result of Infliction of Harm


1. Obligations emerging as a result of infliction of harm shall be governed by the law of the country where the action or other circumstance that has served as ground for damages claim occurred. In cases when the action or other circumstances caused harm in another country, the law of that country may be applied if the person causing the harm foresaw or should have foreseen the onset of the harm in that country.
2. Obligations emerging as a result of infliction of harm abroad, if the parties are citizens or legal entities of one and the same country, shall be governed by the law of that country. If the parties to such an obligation are not citizens of one and the same country but have place of residence in one and the same country the law of that country shall apply.
3. After the committing of an action or onset of another circumstance that entailed infliction of harm the parties may come to an agreement that the obligation that has emerged as a result of infliction of the harm is to be governed by the law of the country of the court.

Article 1220. Applicability of the Law Governing Obligations Emerging as a Result of Infliction of Harm


The following, in particular, shall be determined on the basis of the law governing obligations emerging as a result of infliction of harm:
1) a person's capacity to be liable for harm inflicted;
2) the vesting of liability for harm in a person who is not the cause of harm;
3) grounds for liability;
4) grounds for limitation of liability and relief from liability;
5) the methods of compensation for harm;
6) the scope and amount of compensation for harm.

Article 1221. The Law Governing Liability for Harm Inflicted as a Result of Defects of Goods, Works or Services


1. At the discretion of the victim, the following shall be chosen to govern a claim for compensation of harm inflicted as a result of defects of goods, works or services: 1) the law of the country where the seller or manufacturer of the goods or other causer of harm has place of residence or main place of business;
2) the law of the country where the victim has place of residence or main place of business;
3) the law of the country where the works or services have been completed or the law of the country where the goods were acquired.
The selection of the law at the discretion of the victim from the options set out in Sub-items 2 or 3 of the present item may be recognised only in cases when the causer of harm fails to prove that the goods were brought into the given country without his consent.
2. If the victim did not exercise his right to choose applicable law as specified in the present article the applicable law shall be determined in compliance with Article 1219 of the present Code.
3. Accordingly, the rules of the present code shall be applicable to claims for compensation of harm inflicted as a result of unreliable or insufficient information on goods, works or services.

Article 1222. The Law Governing Obligations Emerging as a Result of Unfair Competition


Obligations emerging as a result of unfair competition shall be governed by the law of the country whose market has been affected by the competition, except as otherwise required by law or the substance of the obligation.

Article 1223. The Law Governing Obligations Emerging as a Result of Unjust Gains


1. Obligations emerging as a result of unjust gains shall be governed by the law of the country where the enrichment has taken place. The parties may come to an agreement that the law of the court is to govern such obligations.
2. If an unjust gain occurs in connection with a legal relation that exists or is assumed to exist due to which property was acquired, the obligations emerging as a result of the unjust enrichment shall be governed by the national law that governed or could have governed this legal relation.

Article 1224. The Law Governing Succession Relations


1. Succession relations shall be determined by the law of the country where a testator had his last place of residence, except as otherwise required by the present article. Immovable property succession shall be governed by the law of the country where property is located and succession of immovable property recorded in a state register of the Russian Federation shall be governed by Russian law.
2. The capacity of a person to create a will or revoke it, in particular, in relation to immovable property and also the form of such a will or will revocation act shall be governed by the law of the country where the testator had place of residence as of the time of creation of such a will or act. However, a will or revocation of a will shall not be declared void because the form has failed to be observed if the form meets the requirements of the law of the place of creation of the will or will revocation act or the provisions of Russian law.

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