Russian Federation: Ruble Depreciation Held To Be Sufficient Ground For Lease Amendment

​On February 1, 2016, the State Commercial Court for Moscow determined case No. A40-83845/15 involving a complaint filed by public joint stock company Vimpel-Communications ("VimpelCom") against public joint stock company Tizpribor ("Tizpribor") regarding a lease agreement between VimpelCom as tenant and Tizpribor as landlord (the "Lease"). The full text of that decision (the "Decision")1  was published on February 4, 2016.


VimpelCom's complaint included (a) a claim for terminating the Lease and (b) a claim for amending the Lease in order to change a calculation basis for rent (which is expressed in US dollars) and to apply limits (i.e., a currency band) to the RUR/USD exchange rate used for the purposes of such calculation. The claims were based on a substantial change in circumstances (within the meaning of Article 451 of the Civil Code of the Russian Federation (the "Civil Code")) due to a change in the exchange rate policy of the Central Bank of the Russian Federation (the "Bank of Russia") and the ruble depreciation caused by such rate change. The court dismissed the claim for termination and satisfied the claim for amendment.

Case Law

Claims for amending agreements in connection with fluctuations in ruble exchange rates have been filed on many occasions in the past. With respect to such claims, Russian state commercial courts mostly held that fluctuations in the ruble exchange rate were not a "substantial change in the circumstances on which the parties relied when entering into the agreement" and that such change was not sufficient for amending and/or terminating the agreement in question2.

Russian courts of general jurisdiction have taken the same position.  For example, Mr. N filed a complaint against Rosbank, and the Moscow City Court reviewed a decision on that complaint at the first and the second appellate level and held that the ruble depreciation due to a change in the policy of the Bank of Russia (which decided to move to a floating exchange rate3) could not be regarded as a "substantial change in the circumstances on which the parties relied when entering into the agreement" and could not lead to the amendment of the loan agreement in question, because, when entering into the agreement, the plaintiff should have foreseen the potential risk and possibility of an increase in the US dollar exchange rate4. A similar position was taken by the State Commercial Court for Moscow in the above case.  Its Decision notes that neither a change in the monetary policy or the exchange rate policy of the Government of the Russian Federation or the Central Bank of the Russian Federation nor any increase in the exchange rate between a foreign currency and the Russian ruble in the Russian Federation may constitute a substantial change in the circumstances on which the parties relied when entering into the agreement.

Rationale for the Decision

VimpelCom's claim for amending the Lease with Tizpribor was satisfied for another reason.

The court noted that "nobody is permitted under Article 1(4) of the Civil Code of the Russian Federation to obtain a benefit from his illegal or unfair conduct."  The court took into account that rent should not exceed the rent generally paid for similar premises in the area where the leased premises are located.  The court concluded that rent above or below market prices may result in significant unjust enrichment or savings for the landlord or the tenant, as the case may be, if the difference between the rent and the market prices is significant.

In summary, a change in the exchange rate caused an increase in the actual ruble amount of the rent and the court believes that such increase resulted in rentals exceeding market prices and, hence, led to the landlord's unjust enrichment5. For this reason, and with a view to protecting the parties' interests, the court amended the Lease and established a currency band (which is between RUR 30 and RUR 42 per US dollar) for the calculation of rent by the parties6.

It is not unlikely that state commercial courts may potentially apply the above approach to other agreements with Russian entities (such as loan agreements and suretyships/guarantees governed by the laws of the Russian Federation or another jurisdiction), as well as leases.

Tizpribor filed an appeal at the first appellate level on January 28, 2016 and such appeal has not yet been scheduled for consideration.

We will keep you informed of any developments in this matter.


1 The text is available at

2 See, e.g., the Resolution of the Presidium of the Supreme Commercial Court of the Russian Federation, reference number 4876/01, dated August 7, 2001, and the Order of the Supreme Commercial Court of the Russian Federation, reference number 5003/07, dated April 28, 2007.

3 The Bank of Russia pursued the policy of managed float since 1999. This policy allowed the ruble value of a dual-currency basket to fluctuate within a permissible range determined by a floating operational band for which its floor and ceiling were adjusted to reflect currency intervention by the Bank of Russia (see the Exchange Rate Policy of the Bank of Russia at  Effective from November 10, 2014, the Bank of Russia canceled the permissible range for the value of the dual-currency basket (the operational band) and regular interventions on and outside the limits of this band and, thus, moved to a system of floating exchange rates (see the Information Notice of the Bank of Russia, dated November 10, 2014 On Parameters of Bank of Russia Exchange Rate Policy at

4 See the order dated June 8, 2015 of the Moscow City Court at the first appellate level in connection with case No. 33-19462 and the order of the Moscow City Court, reference number 4г/8-12307, dated November 26, 2015

5 The court noted that the rent rate does not vary with an increase or decrease in the exchange rate, because the parties do not increase or decrease the rate and only comply with contractual terms.

6 The court simultaneously dismissed VimpelCom's claim for terminating the Lease, because the grounds set forth in Article 451 of the Civil Code did not apply to such claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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