SETTLEMENT, what could be more simple
April 26, 2019

By its nature, a settlement is a type of civil law contract, but since the settlement is a contract to be approved by the court, to it, in addition to the rules of procedural law, apply the rules of civil law regarding contracts, including the rules on freedom of contract and on the interpretation of the contract .

By virtue of the principle of freedom of contract, the settlement agreement may contain any conditions that do not contradict the law.

All terms of such an agreement should be simple, explicit and transparent.

However, one of the mistakes that are grounds for refusing to approve a settlement agreement by a court is an attempt to require any party to perform or not perform uncerain actions.

At the same time, the Constitutional Court of the Russian Federation, in its definition of 24.02.2004 No. 1-O, clarifies that the settlement is an agreement of the parties to terminate the dispute based on the voluntary settlement of mutual claims and the approval of mutual concessions, which is one of the procedural means of protecting subjective rights.

Concluding an agreement, the parties must remember that by virtue of Art. 138, 139 and 140 APC RF settlement agreement can not be concluded under the condition and contain options for ways of its execution, because the settlement agreement by its nature is a way to resolve the dispute, which is based on the reconciliation of the parties on mutually acceptable conditions and does not imply the continuation of the civil law conflict . The essence of the settlement agreement is to end the process through a global settlement of the dispute, that is, to achieve certainty in the relations between the parties based on the will of the parties themselves.

The consequence of the conclusion of a settlement agreement is the termination of the proceedings and the impossibility of going to court under the same dispute.

Legal action is only possible if the terms of the concluded settlement are not being met.

Remember that the law does not provide for the possibility of approving the settlement agreement in part, changing or excluding any conditions from the settlement agreement. Therefore, the court, considering the issue of approving a settlement agreement, does not have the right to approve such an agreement in part, to modify or exclude from it any conditions agreed by the parties. At the same time, the court has the right to propose to the parties to exclude certain conditions from the amicable agreement that are contrary to the law or violate the rights and legitimate interests of other persons (Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 50 dated July 18, 2014 "On Conciliation of the Parties in the Arbitration Process").

Also, the court, not being a party to a settlement agreement, does not have the right to clarify the terms of the settlement agreement, since the parties themselves determine the conditions on which they enter into a settlement agreement, therefore, the terms of the agreement cannot be unclear to the parties.

The main reasons for not approving a settlement agreement by the court, which the parties may face are:
1. It does not comply with the law.
2. Violates the rights and legitimate interests of third parties.
3. Not complied with the conditions required in the conclusion of a civil contract. For example, there is no approval of a large deal.
4. The settlement agreement is aimed at abusing legal rights.
5. The settlement agreement creates uncertainty, contains vague expressions that do not allow unambiguous interpretation of the order of execution or other conditions, or simply states some facts.
6. The parties make the consequences of the execution of the settlement agreement depend on the occurrence of certain events.

Thus, the settlement agreement is an excellent and effective way to resolve the conflict between parties, if you remember the necessary conditions for its conclusion.

Elena Tovkan
+7 (499) 490-47-42

117418, Moscow, st. Novocheremushkinskaya, 69