Contractual Preemptive Rights: Russian Doctrine and European Tradition in the Context of Russian Civil Code Reform

Abstract

Problems associated with the possibility of the stipulation of preemptive rights by contract and their effective protection are researched in this article. Based on the examples of German, French and Swiss civil legislation, we establish that contractual preemption is widely used in Europe as a convenient instrument to formalize the interests of the participants in a civil turnover. In this connection, in Russian civil doctrine, the widespread idea that preemptive rights may be stipulated only by law, not by contract, should be revised.We state that the essence of the institution of preemptive rights predetermines its remedy. Historically Russian civil law provides specific remedy in case of breach of the most spread statutory preemptive rights. It is a claim by the entitled person (holder of preemption) against a third party (counterparty of obliged person whose contract breached the preemption) to transfer from the third party to the entitled person the rights and duties that arose under the contract between the third party and the obliged person. This remedy is more efficient for the entitled person than damages. In accordance with the principle of good faith, it may be used only in cases in which the third party knew or should have known about preemption. However, this requirement is complied in relation to protection of statutory preemptions only. As far as both contractual preemptive rights and contracts stipulated the latter are not recognized and not registered in Russia, such suit will be dismissed by court. The lack of effective protection of contractual preemptions impedes the creation of full-fledge system of preemptive rights in Russian civil law.In order to create effective mechanism of protection of contractual preemptive rights by giving the participants of a civil turnover the opportunity to ascertain if there is a contractual preemptions, we suggest that Russian civil legislation should be added by two registration systems. The first is a system for the registration of contracts that stipulate preemptions over immovable property (or registration of the preemptions itself which is better) provided by the Federal Service for State Registration, Cadastre and Cartography of the Russian Federation. The second is a system for the registration of notifications on the conclusion of contracts that stipulate contractual preemptive rights over movable things that could be established by an expansion of the existing system for the e-registration of notifications оf pledges of movable things under the jurisdiction of the Federal Chamber of Notaries of the Russian Federation.