Журнал ЗАКОН

Case Comment on the Judgment of the Chamber for Commercial Disputes of the RF SC № 305-ЭС15-20071 (6), 20 December 2018 Earlier the Presidium of the Supreme Commercial Court of the Russian Federation ruled that, in the case of the bankruptcy of the developer of a block of flats, the claim of a creditor for recognition of his right of ownership to non-residential premises located in the building could be satisfied by the court if this claim was current (Judgments dated 11 March 2014 № 16768/13, 27 March 2012 № 15961/11). In a Ruling dated 20 December 2018 № 305-ЭС15-20071 (6), the Chamber for Commercial Disputes of the Supreme Court has for the first time confirmed its commitment to the above-mentioned legal position of the Presidium of the Supreme Commercial Court (the Chamber construed the claim that the applicant calls a «claim for recognition of the right of ownership to non-residential premises» as a claim to compel the developer to transfer the disputed non-residential premises). However, with regard to the conditions on which the creditor’s claim can be qualified as current and satisfied by the court, the Chamber clarifies and at the same time develops the approach taken by the Presidium of the Supreme Commercial Court. Among other things, the ruling under comment is of great importance because it contributes to the development of the category of non-monetary current claims recognized in case law but not envisaged in the general provisions on current claims of the Law on Bankruptcy.

---

Keywords: bankruptcy of developers, claim for transfer of non-residential premises, current claim

Case Comment on the Judgment of the Chamber for Commercial Disputes of the SC RF No. 306-ЭС17-18368, 11 May 2018 The author comments upon the famous Magadan Test case, where the Supreme Court confirmed that pure economic losses are in principle compensable under Russian law, in spite of the absence of a special rule to that effect. The author classifies the Magadan Test case as a typical negligent misstatement case and supports both the Court’s decision to award the losses and its guidelines to lower courts on how to deal with losses caused by negligent misstatements. The author, however, questions the Supreme Court’s use of the concept of absolute right as a ground for the conclusion in the case.

---

Keywords: civil liability, pure economic loss, negligent misstatement, joint and several liability, property

Case Comment on the Judgment of the Chamber for Commercial Disputes of the SC RF No. 305-ЭС18-18538, 14 February 2019 The judgment under comment asseses the legality of the invalidation of a transaction made to the detriment of creditors before the initiation of bankruptcy proceedings. The Supreme Court confirms that interested parties may challenge a transaction made to the detriment of creditors as early as in the supervision procedure, pursuant to Articles 10 and 168 of the Civil Code of the Russian Federation. The invalidity of the said transaction may be proved by justifying the circumstances, including those confirming the attributes of suspicious transactions (Article 61.2 of the Bankruptcy Law): a substantially and unreasonably inflated contract price, signs of the customer’s insolvency, implementation by both parties of the purpose of harming the rights of creditors, etc. This conclusion of the Supreme Court of the Russian Federation looks reasonable and, taking into account the existence of an opposing position, in practice makes it possible to additionally set the correct guidelines for inferior courts. At the same time, the Supreme Court, by deeming the transaction null and void under Articles 10 and 168 of the Civil Code of the Russian Federation, upheld the decision of the appeals court, which recovered the market value of services rendered as part of such transaction. The author believes that the most consistent explanation of this position can be seen in the fact that the Supreme Court of the Russian Federation approved the appeals court’s application, on its own initiative, of the consequences of invalidation of the transaction in the form of recovery of the value of the services rendered by way of restitution.

---

Keywords: civil law, bankruptcy, invalidity of a transaction, non-bankruptcy challenge

Foreword to the Judgment of the Supreme Court of Germany IX ZR 169/11 dated 15 November 2012 In the present case of the Supreme Court of Germany, an energy supply contract contained a resolutive clause on contract termination in the event of the initiation of insolvency proceedings against the buyer. The Supreme Court of Germany concluded that such clauses are invalid, as they deprive the insolvency receiver of the right to choose whether to continue or terminate the contractual relationship. In the foreword to the translation of the judgment of the Supreme Court of Germany, the author sets the objective of drawing the attention of Russian lawyers to the institution of terminating the debtor’s transactions and to its effective operation through the prohibition (invalidity) of the bankruptcy clause. The prohibition of the bankruptcy clause is based on two key arguments. First, the possibility for the insolvency receiver to decide in favor of continuing or terminating the contractual relationship in an insolvency case may be undermined if the bankruptcy clause is valid. Second, due to the need to develop rehabilitation procedures, the prohibition of bankruptcy clauses is important for the continued existence of the company.

---

Keywords: insolvency, bankruptcy clause, termination of the debtor’s transactions

The author performs a deep doctrinal study of the retroactive effect of offset to identify its relevance and validity in current Russian private law. The author comes to the conclusion that the correct perception and proper assessment of the retroactive effect of offset have long been hindered by fundamental misconceptions that are very common both in Russian and in European doctrines, namely: a) in Germany, this principle appeared as a result of misinterpretation of the Roman wording ipso jure compensatur, which supposedly meant automatic offset in Roman law when two claims occurred. As a result, there is no legislative intent behind the retroactive effect of offset; this is only a historical misunderstanding; b) all German rules regarding the effect of offset (including rules on the admissibility of offset of a claim that has been ceded, barred by limitation or arrested, as well as offset in bankruptcy) constitute a single set of logically inextricably linked norms which must either be adopted entirely or totally rejected. Proving that, in reality, each of the specific rules united by scholarship under the theoretical concept of the retroactive effect of offset has an independent internal justification, the author separately examines all the most important (real or imaginary) manifestations of the retroactivity of offset with regard to the initial reasons for their occurrence and their relevance in the modern Russian law.

---

Keywords: offset, retroactive effect, objection, delay, unjust enrichment, interest

The author discusses the main problems related to the definition of the security assignment and the use of this institution in practice. It is noted that the security assignment is a fiduciary transaction, in which the parties choose a legal instrument that transfers more rights to the creditor than required for the goal they are pursuing. The classification of the security assignment as a type of title security is criticized, as this term unites legal instruments not always aimed at ensuring the fulfillment of obligations. The security assignment is an assignment limited in its legal effects to the purpose of security: after proper fulfillment of the secured obligation the assigned claim must be returned to the assignor. In order to protect the assignor’s interests in the case of fulfillment of the secured obligation, the claim must be transferred to the assignor without the need for a reverse assignment from the assignee. If the assignor is not entitled to alienate the claim transferred to the assignee for security purposes and the assignee is unaware of this, the latter should be recognized as a bona fide purchaser of the security. The same rule should apply to the subsequent assignment of the claim for security purposes to a bona fide person. In order to establish the good faith of the assignee, it is possible to use the register of charges of movable property for registration of security assignments. In case of assignor's insolvency the assignee to whom the claim was transferred for security purposes should be treated as a secured creditor. It is appropriate in bankruptcy to use a functional approach, in which transactions with a similar security function are treated as equivalent.

---

Keywords: security assignment, pledge of rights in personam, title security

Dispositions of organs, tissue or cells are analysed from the point of view of private law. Can a person express consent or non-consent to being a donor after death, and if so, how? Is consent to be a live donor a transaction? There are some legal acts in modern civil law which are not connected with things or money. The peculiars of organ donations are investigated in the article. Why such orders should be free? Is there a need for the court’s control over such orders? The nature of a living will is also analysed. A living will about euthanasia is prohibited in Russian law, but other orders could be useful: for example, to appoint a representative to give a consent or non-consent to a certain operation. There is no experience of life wills in Russian law, and the author reflects on the reasons for this. But there are many cases about embryos. The main question in the discussion about embryos is as follows: is an embryo a person or a thing? The author asserts that the embryo is neither a person nor a thing. If embryo is created in vitro, it is a sui generis phenomenon, with features of both an object of law and a subject of law. The human right to be a parent is connected with this phenomenon.

---

Keywords: personal intangible benefits, health, transaction, informed consent, tort

The present article continues a series of articles aimed at familiarising the reader with the COD (corporate opportunity doctrine). In this study, the author examines the potential application of the doctrine in the framework of Russian legislation and analyses the relevant case law. In general, the doctrine is consistent with the «imperative» (obligatory) rules of Russian law; however, there are some complications. One of them is that, according to Russian case law, a director is liable to the corporation, even if his actions were approved by the authorised body of such corporation. This is in direct conflict with the content of the doctrine, which implies the freedom of the director to take business opportunities which the company has declined to take. The author believes that it is possible and necessary to incorporate the doctrine into the Russian legislation. In this case, the specific model of the doctrine can be chosen by the legislator: ex ante and ex post models are both conceptually suitable.

---

Keywords: corporate opportunity doctrine, COD, fiduciary duties, directors’ liability, estoppel