Anna Arkhipova Insurance or Tort?
Case Comment on the Judgment of RF SC No. 305-ЭС17-20897, 17 May 2018
The Ruling of the Supreme Court dated 17 May 2018 No. 305-EC17-20897 returns us to the problem
of correlation between the liability in tort and the insurance of such liability. Until recently, the court
practice stood on a position that the insurer had to be adjoined into the proceedings initiated by the
victim. In this case, however, the court held that the victim was entitled to claim recovery from the
tortfeasor directly. Thus, the court applied a restrictive construction of article 1072 of the Russian Civil
Code, while its literal construction implies that the tortfeasor is liable only for the balance between the
amount of harm and the insurance money.
The uncertainty in the issue of correlation between the victim’s claims against the tortfeasor and the
liability insurer allows to put forward a number of suggestions de lege ferenda. The first is to stipulate
that the insured who has indemnified the victim is entitled to claim insurance money from the insurer.
The second proposal is to allow liability insurance in favour of the insured.
tort, indemnification of harm, liability insurance
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Roman Kovchik On the Gratuitousness of Transactions for the Termination of Pledge and Their Invalidity in Practice of the Supreme Court of the Russian Federation
Case Comment on the Judgment of RF SC No. 301-ЭС17-7613 (3), 23 August 2018
In the case in question, there was a dispute about the invalidity of the agreement aimed at the
termination of the Bank’s pledge, securing the borrower’s obligations under the outstanding credit.
The author criticizes the conclusion of the Supreme Court on the gratuitousness of such agreements
since it is impossible to dispute it on the basis of clause 2 of art. 61.2 of the Law on Insolvency
(Bankruptcy). The other conclusion of the Supreme Court that the agreement may be disputed on the
basis of clause 2 of the same article is not considered by the author to be pervasive.
invalidity of the transaction, pledge, Article 61.2 of the Law on Insolvency, knowingly unprofitable transaction
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Alexander Latyev When «Double Sale» Is Not Sufficient Grounds for a Contract to be Deemed Invalid
Case Comment on the Judgment of RF SC No. 18-КГ18-92, 19 June 2018
The Judicial Chamber for Civil Cases of the Supreme Court of the Russian Federation ruled that the
second buyer’s claims against the developer in the «double sale» of the same property are valid. It
is noted that the retreat from the usual general jurisdiction court practice, invalidation of such claims
is probably due to the special circumstances in which such a sale took place and became a double
sale. The Supreme Court had to intervene since previous disputes regarding the same sale were
decided by courts with clear violations of substantive an procedureal law; nevertheless, they entered
into force and bacame binding. The correction of such previously perpetuated errors required the
retreat of general jurisdiction courts headed by the Judicial Chamber for Civil Cases of the Supreme
Court of the Russian Federation from their usual practice and the logic used to classify what qualifies
as a «double sale» by arbitrazh (business) courts that see them not as invalid transactions, but as a
violation of its obligations by the developer.
double sale, assignment, generally binding character of judicial acts
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Sergey Budylin The Implied Term of Good Faith in the English Contract, or the Case of the Warm-Hearted Sheikh
Commentary to the Case Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v. Kent 
EWHC 333 (Comm.) (22 February 2018)
In this case, as decided by the High Court of England and Wales, the question arose as to whether
there is a duty in English contract law to act in good faith. More precisely, whether the parties of a joint
venture contract have such a duty to each other. Lord Justice G. Leggatt suggested an innovative
idea for the English law that such a duty exist as an implied term in certain types of contracts.
In this case, the duty of good faith meant, according to the judge, that a party to the contract has
no right to force an unfair division of the business, as well as secretly from the partner to conduct
negotiations on the sale of its share of the business to a third party. However, the judge admitted
that the question of the existence of the duty of good faith remains controversial. So in alternative the
decision was based on tort law: forcing a partner through blackmailing and threatening to enter into
a disadvantageous agreement for a business division is not only a violation of the contractual duty
(if any) but is also a tort.
England, division of a business, contract law, good faith, tort, duress, intimidation
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Ainur Shaydullin Main Political and Legal pro and contra Arguments of the Idea of Loan Subordination for Members of Legal Entities
The author considers the key arguments that are discussed in the Russian and foreign scientific
discourse in relation to the need to reduce the priority (subordination) of loans for members of legal
entities. The main arguments in favor of subordination are the abuse of the limited liability principle,
stimulation of an earlier opening of the procedure, inadmissibility of the transfer of financial risks, and
the creation of false solvency, etc. The main objection is that the reduction in priority discourages
the attempts to reorganize the company outside the formal insolvency (bankruptcy) procedure. The
author reaches the conclusion that the arguments put forward along with foreign experience should
be taken into account in the development of an optimal regulation in Russia.
law policy, loan subordination, insolvency (bankruptcy)
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Daniil Kargalskov Recovery of Profits Received by the Offender: the Dutch Approach and One Ruling of the Supreme Court of Russia
This article is devoted to the legal analysis of disgorgement of profits under Dutch law in comparison
with its closest Russian counterpart (аrt. 15(2) of Russian Civil Code) which is essentially a verbatim
adoption of the Dutch law provisions on disgorgement of profits. The purpose of the article is to form
certain recommendations on the improvement of Russian legislation and judicial practice based on
the conclusions to be drawn from the development of disgorgement of profits under Dutch law, given
that many questions arising regarding the application of disgorgement of profits have not yet been
addressed by Russian law.
The article consists of two parts. The first part addresses the main development stages of disgorgement
of profits under Dutch law (including its adoption as legislation and development in court practice)
revealing the existing contradiction between the policy considerations behind the disgorgement of
profits and the way it has been codified by the positive law. Furthermore, the author concludes that the
same contradiction exists under Russian law as well and addresses possible solutions for resolving
the contradiction (codification of disgorgement of profits as part of unjust enrichment law given there
are all necessary preconditions for that in Russian law). The second part of the article is concerned
with legal analysis of the recent Russian Supreme Court ruling wherein the disgorgement of profits
was for the first time brought to the attention of the Russian higher judicial bodies. Based on the
conclusions made congruent to prior analysis of Dutch law, the author addresses possible solutions to
legal issues arising in connection with the ruling in question. Such solutions can be: 1) implementation
of the policy idea of overcompensation behind disgorgement of profits notwithstanding the dogmatic
contradictions; 2) codification of аrt. 15(2) of Russian Civil Code under a legal doctrine which is more
capable of reflecting the nature of disgorgement of profits; 3) codification of аrt. 15(2) of Russian Civil
Code as a standalone legal remedy — the right to demand and obtain the unlawfully gained profits.
disgorgement of profits, winstafdracht, unjust enrichment, abstract damages, Netherlands
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Pavel Praviaschii Lease Transfer with Surprise: New Position of the Plenum of the Supreme Court of Russia
When the lessee receives the rights and obligations under the lease agreement in the form of a lease
transfer, is he obliged to repay the lease debt of the former lessee accrued before the lease transfer?
Due to the resolution of the Plenum of the Supreme Court of Russia No. 54 dated 21.12.2017, judicial
practice on this issue has changed as dramatically as it has suddenly. First, if the lease transfer is
performed with the consent of the lessor, the accrued rent debt shall now, as a general rule, be paid
by the new lessee, but not the by previous one. Second, in the event of the lease transfer without the
consent of the lessor, the new lessee is jointly obliged to repay the already accrued debt. The author
criticizes these rules. First one — because it leads to unforeseen consequences for new lessees
that received the property before the clarification. Second one — because it does not provide the
expected protection for the lessor. Since the lessor did not choose a new lessee, the lessor could be
given the opportunity to force the previous lessee to pay the lease amount accrued after the lease
transfer. However, the Supreme Court speaks of a joint and several liability only with respect to the
debt accrued before the lease transfer. The author also substantiates the conclusion that these rules
are not to be applied to the situation when the lease right is reserved by its pledgee.
transfer of contract, lease transfer, pledge of lease right, joint and several liability
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Sergey Lazarev Concept and Types of Serial Cases in Arbitrazh (Business) Courts
The article gives the concept of serial cases. The author divides the series of cases into judicial
(developing law and correcting judicial errors) and representative (similar and dissimilar). Some of
the proposed tools for dealing with serial cases include combining cases and complaints into one
proceeding, reviewing pilot cases, reviewing judicial acts on new circumstances in connection with
the definition of practice, and procedural requests.
serial cases, commercial court, revision of judicial acts, review of newly discovered circumstances
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Ayvar Malikov The Problem of the Correlation of the Pari Passu Principle with the Preclusive Term for Filing the Proof of Claims
The article analyzes the question of the correlation of pari passu principle with the preclusive term
for proof of claim filling. The preclusive term for proof of claim filling generates a large amount of
problematic situations connected with an unreasonable decrease in the creditor’s claims priority
(considered in the article), which, in the author’s opinion, is a violation of the basic principle of
bankruptcy law — pari passu principle. The judicial practice of the Supreme Court of the Russian
Federation, and recent changes in legislation are expressed in support of this position. The
approaches of foreign countries to the solution of this issue are studied in the framework of the article
as well. Based on this comparative legal analysis, the author suggests this tension is to be resolved
by either extending the number of cases with terms eligible to be included in the register of creditors’
claims, or, alternatively, the preclusive term could be abandoned altogether. Until recently, legislation
and judicial practice developed in the former direction. However, the amendments to the Insolvency
(Bankruptcy) Law proposed by the Supreme Court in November 2018 demonstrate that the court
rather prefers not to consider this term as preclusive.
bankruptcy (insolvency), register of creditors’ claims, pari passu principle, preclusive term
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Daniil Boreysho Confirmation of a Negotiable Transaction: An Analysis of Judicial Practice of Application of the Provision of Clause 4 Paragraph 2 Article 166 of the Civil Code of the Russian Federation
The author considers the judicial practice of applying the rule of confirmation of the disputed
transaction (cl. 4 par. 2 art. 166 of the Civil Code of the Russian Federation), which appeared in the
domestic legislation in the framework of the reform of the Civil Code. The study identified a number
of difficulties. In particular, the courts do not understand the legal nature of this rule, do not take into
account the differences between the provisions of cl. 4 par. 2 and par. 5 art. 166 of the Civil Code. In
practice, the possibility of transaction confirmation for those disputed on corporate grounds, as well
as the limits of this rule with respect to transactions that are contrary to the law are discussed. The
author also discusses the forms of transaction confirmation in practice.
transaction confirmation, good faith, waiver, transaction invalidity
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Sanchir Mandzhiev Review of Judicial Practice on the Application of Paragraph 5 of Article 166 of the Civil Code of the Russian Federation
This article provides an analysis of judicial practice in relation to the application of clause 5 of
article 166 of the Civil Code of Russian Federation (estoppel). Following the analysis, the author
concludes that courts recognize and actively apply estoppel. However, the author notes that they do
not differentiate clearly between clause 5 of article 166 of the Civil Code and paragraph 4 of clause 2
of article 166 of the Civil Code (waiver of right to appeal). Furthermore, the author concludes that
courts, while applying estoppel, do not explicitly acknowledge, but effectively cure void transactions.
Besides, there are several cases where courts refuse to apply estoppel, e.g. in bankruptcy cases.
In summary, the author states that no clear-cut criteria have been established for the application of
estoppel so far.
estoppel, void transaction, convalidation
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