Absence of provisions on interest rate. If a pledge (mortgage) agreement fails to specify the amount of and/or procedure for payment of loan interest, then the secured claim is deemed limited to the principal debt.

When notarisation is not needed. Pledge (mortgage) agreements with respect to aircraft, sea and river vessels, rolling stock and spacecraft do not need to be notarised.

Changes in the secured obligation. Changes in the amount or term of a secured obligation as described in a pledge (mortgage) agreement (for example; change of the interest rate or the loan maturity date) shall not entail termination of security. For example, if the amount of a secured principal debt is increased, the pledge shall secure the debt in the amount which existed prior to such increase, unless the parties have previously agreed that the secured debt сould be increased by a specified amount.

Division or merger of a land plot. In case of a division, merger of or allotment from a mortgaged land plot(s), the mortgage will remain in effect with respect to newly formed land plots unless the parties agree otherwise. State registration of mortgage with respect to newly formed land plots shall be performed by the registrar on its own and the filing of a separate application for registration is not needed.

When mortgage of a land plot or rights thereto is not needed. The law provides that a building may be mortgaged only together with the underlying land plot or lease rights thereto. According to the clarifications, this rule does not apply in case of:

Assignment of a secured claim. If a creditor assigns its claims secured by a mortgage to a third party, the new creditor may only claim mortgage enforcement after the transfer of the mortgage rights to it is registered.

When extra-judicial enforcement is not allowed. Russian law provides that where a pledge or mortgage was granted by an individual and the conclusion of a security agreement required a third party's consent, such security may only be enforced through a judicial procedure. The Court clarified that an out-of-court enforcement (OE) option is therefore not available for:

Form and registration of an agreement on OE. If an agreement on OE is concluded as a separate document (rather than included in a security agreement), it should be in the same form as the security agreement and should be registered if the latter is itself subject to state registration. In particular, an agreement on OE of a mortgage executed as a separate document is subject to state registration.

Unlawful levy of execution. If a pledgeholder levies execution unlawfully (for example; if an agreement on OE is invalid), the pledgor (mortgagor) may either:

Pledgor's consent for OE. Russian law differentiates between the "pledgor's consent for OE" and an "agreement on OE." A notarised consent to the OE, which is required by law for pledges if the pledgor is an individual and for all mortgages,

Resort to court despite the existence of an agreement on OE. If a pledgeholder goes to court to enforce security despite the existence of an agreement on OE then, irrespective of the outcome of the case, the pledgeholder shall bear all the relevant court expenses. This will not be the case if:

In addition, the pledgeholder who goes to court despite an agreement on OE may ask the court either that the pledged property be realised according to the procedure established for judicial enforcement, or transferred to it for further realisation in accordance with the agreement on OE.

Old security agreement and new agreement on OE. The parties may conclude an agreement on OE even if the pledge (mortgage) agreement was made before Federal Law No. 306-FZ, dated 30 December 2008, entered into force.

When pledged movable property is sold. If a pledgor disposes of pledged movable property (for example; sells it) without the pledgeholder's consent, the pledgeholder may not challenge the disposal, rather it may accelerate the secured debt and levy execution on the pledged property.

When mortgaged immovable property is sold. The above approach applies to mortgages of immovable property save for cases when a mortgagor alienates mortgaged property without the mortgageholder's consent, or grants a subsequent mortgage in breach of a prohibition established in the prior one. In these cases the mortgageholder is entitled to challenge the disposal.

Simultaneous levy of execution by a prior and a subsequent pledgeholder. If a prior and a subsequent pledgeholder wish to levy execution on the pledged (mortgaged) property in an extra-judicial procedure simultaneously, they are to send a joint enforcement notice to the pledgor (mortgagor).

Bona fide purchaser of pledged movable property and enforcement. A pledgeholder may not levy execution on pledged movable property if it was sold by the pledgor to a third party who did not know and could not have known that the property was subject to pledge.

Security for claims to restitution when secured obligation is invalid. The parties may agree that the pledge (mortgage) secures not only claims arising out of an agreement (for example; on loan repayment and payment of interest), but also claims to restitution if the agreement turns out to be invalid.

Levy of execution on part of secured property. If a pledge (mortgage) agreement indicates the total value of several pledged (mortgaged) items and does not indicate the values of those separate items, then execution shall be levied on all the secured property and it shall only be realised as a whole. Partial levy of execution will only be possible if the:

Methods of realisation when immovable property is mortgaged. The Court pointed out that the methods of realisation of the mortgaged property in case of OE are as follows:

Only one realisation method in an agreement on OE of mortgage. An agreement on OE of mortgage may indicate only one of these methods. If no such method is indicated or several methods are indicated, then the agreement on OE is deemed "non-concluded" and thus the mortgage may be enforced through a judicial procedure only.

Acquisition of mortgaged property by the mortgageholder. The law does not allow the mortgageholder to acquire the mortgaged property if the mortgaged property consists of a land plot. The Court clarified that this restriction does not apply to mortgage of a land plot (land lease rights) occupied with a building mortgaged to the same mortgageholder.

Extra-judicial enforcement of pledges of movable property. The law provides that in case of OE, the pledged property is to be realised through an auction or sale under a commission agreement concluded by the pledgeholder. If a pledge agreement is concluded among legal entities and/or individual entrepreneurs, they may agree that the property will be acquired by the pledgeholder or sold, including by a commission agent, without an auction.

Involvement of a commission agent and sale at an auction. The Court pointed out that in the former case the involvement of a commission agent means that the pledged property shall be sold by the commission agent at an auction, whereas in the latter case (for example; where the pledge agreement is among legal entities and/or individual entrepreneurs), the pledged property shall be sold by the commission agent without an auction.

Methods of realisation when movable property is pledged. The Court further summed up that the methods of realisation of pledged movable property in case of OE are therefore as follows:

Several realisation methods in an agreement on OE of pledge of movable property. As opposed to an agreement on OE of a mortgage, an agreement on OE of a pledge of movable property may contain several methods of realisation, and in that case it is the pledgor (rather than the pledgeholder) who will be able to choose a particular method at its discretion, unless agreed otherwise. If no such method is indicated, then the pledged property shall be sold by the pledgeholder at an open auction (which may be organised by a commission agent), or on a stock exchange if traded securities are pledged.

Pledgor's rights when realisation is delayed. The law provides that pledged movable property shall be realised within the term agreed upon by the parties or, if none is agreed, within a reasonable term. The Court clarified that if pledged property is realised after the expiry of the term for its realisation, the pledgor may claim from the pledgeholder damages incurred due to the late realisation (for example, the amount of interest accrued after the term expired and withheld by the pledgeholder from the sale proceeds). This approach shall also apply to a mortgage if the parties agreed upon a certain term for realisation in an agreement on OE.

Pledgeholder's authority to make transactions in its own name. The statutory rule allowing the pledgeholder to conclude all the transactions required for realisation of pledged property in its own name shall apply to OE realisation with any of the methods mentioned above.

The need for possession of pledged movable property. The acquisition of pledged movable property by the pledgeholder or its sale to a third party without an auction is only possible if the pledgeholder possesses the pledged property. Thus, the pledgeholder or the purchaser, as applicable, shall only obtain title to the pledged property provided it obtains possession of such property.

Transfer of title to mortgaged property. If a mortgageholder wishes to acquire mortgaged property for itself or for a third party, it does not need to conclude a separate sale-purchase contract with the mortgagor. To register the transfer to title to the mortgaged property the mortgageholder shall submit to the registrar an application for state registration (no mortgagor's application is needed) together with:

Transfer of title to pledged rights. If the pledgeholder acquires pledged rights, such rights shall be transferred to the pledgeholder at the moment of receipt by the pledgor of the pledgeholder's declaration (notice) on retaining such rights for itself, provided the prior enforcement notice was properly sent to the pledgor.

OE without an auction to be done at the market value determined by an appraiser. Pledged property shall be acquired by the pledgeholder or sold to a third party without an auction at its market price to be determined by an independent appraiser.

Challenging of enforcement in case of breaches. If the rules on appraisal of the pledged (mortgaged) property are violated in the course of its OE realisation without an auction, the realisation may be challenged by an interested person. Such transaction shall be found invalid if it is proved that the purchaser knew or should have known that the rules on appraisal were breached. In addition, the pledgor (mortgagor) is entitled to claim damages from the pledgeholder irrespective of whether the realisation transaction is challenged or not.

Starting sale price at an auction – no less than 80% of the price determined by appraiser. Where the law requires engagement of an independent appraiser for OE realisation, the starting sale price of the pledged property at the auction may not be less than 80% of the market price determined by an independent appraiser.

Realisation of receivables. In case of extra-judicial realisation of pledged receivables, they are subject to independent appraisal both in case of sale at an auction and acquisition by the pledgeholder or sale without an auction.

When the auction fails. If an auction for the sale of pledged property fails because only one participant showed up or no one increased the starting sale price, the pledgor or the pledgeholder may apply to a court and ask that the starting price be reduced. In this case, the claimant must prove that the market price of the pledged property significantly decreased after the entry into force of the decision on the levy of execution.