The Legal Regulation of the Pledge in the Russian Federation

Court’s practice and the contract law illustrate the essential role of pledge in the system of securing obligations, which serve to replenish the lack of faith between the parties of a deal. Under the Russian Civil Code pledge entitles the creditor (the pledgee) to be satisfied from the cost of the pledged property in priority before the other creditors of debtor. This paper aims to cover some issues pertaining to the sphere of pledge and particularly to address the theoretical problem of the legal nature of pledge and its classifications, to elucidate two approaches to identify the object of pledge, to analyze the mechanism of execution pledged property. The traditional approach, used in the present survey, represents the systematic and scrutinized research of recent litigation of conflicts related to the pledge. It also involves the analysis of comparatively new rules in the legislation of pledge in the Civil Code and other Federal Acts. Additionally, to enrich the theoretical basis of our survey, we utilized scientific literature, devoted to the pledge and its problems. Despite a considerable amount of such paper, there is no consensus neither in legal literature, nor in the practice, how pledge is intended to balance interests of the both sides of contract and third parties. It has been found that it is crucial for the stable transaction of goods and services to legislate pledge with aim to sustain creditor’s interest with a few exceptions, determined by the protection of legal interests of weak or (and) third parties of obligation. To this end, in the research some proposals for further reforms in the legislation and practice are made.