Every third private pension fund (PPF) which license has been revoked attempted to reinstate it in the court. However, overwhelming majority of funds are able to dispute with the regulator in the first instance court only. As the most of participants of the market noted out, considering the low professional qualification of pension funds’ lawyers as well as real problems with compliance with legislation requirements by PPFs, such result is quite logical.
It is clear from materials in the database of arbitration cases that 9 of 28 PPFs have attempted to dispute the revocation of the license with the regulator. Either funds’ administrations or their owners have sued in the court and suits themselves are mostly similar. It is noted there that the decision on revocation of the license has been made by the regulator (the Central Bank at the moment and the FFMS until 2013) without legitimate reason. Due to it the fund’s clients have no possibility of choice of PPF (in case of revocation of the license all pension savings shall transfer to the Pension Fund of Russia) and lose their investment income <...>
Not just the result but the process itself is important to the PPF’s management and owners in the legal controversy with the Central Bank, experts say. “Challenging the decisions on revocation of the license is a demonstration of integrity of beneficiaries and former management of the PPF. It can be important in case of subsidiary prosecution of such persons at the final stage of the bankruptcy procedure’, said Sergey Levichev, the Head of Bankruptcy Practice at Pavlova&Partners law firm.