This article discusses three major issues of taking security under Russian law:

 

Recent court practice shows that it is possible for a pledgor to assume a valid and enforceable obligation to give security over a building that is to be constructed in the future. This can give more comfort to construction lenders and reduce credit risk in project finance transactions.

Additionally, new legislation on extra-judicial foreclosure on pledged property made this procedure usable and creditor-friendly allowing the pledge creditor to foreclose both movable and real property without the need to obtain court ruling. The new legislation was introduced by the Federal Law No. 306-FZ “On Making Changes to Certain Legal Acts of the Russian Federation in connection with Improvement of Foreclosure on Real Property” of 30 December 2008 (the Law).

Finally, the new bankruptcy rules on pledge foreclosure provided by the Law allow the pledge creditors to obtain the major part of the foreclosure sale proceeds independently of the orders of priority of other creditors of the bankrupt pledgor.

The full version of this article you can read here or view in the attached file below.