Magazine Cover
Press to zoom

Buy a PDF

ARCHIVE FOR 2020    RUSSIAN

Февраль 2020

CONTENT

 

 

Polina Romanova, Alexey Akuzhinov Polina Romanova, Alexey Akuzhinov The Fate of the Right of Lien in the Insolvency Procedure and the Effect of the Assignment of the Claim on the Right of Lien, or Why the Right of Lien Should Not Be Equated with a Pledge
This judgment of the Supreme Court of Russia reversed courts’ approach to the question whether those who retain possession of property as a security for their claims should be treated as chargees in case of the debtor’s bankruptcy. Following the Supreme Court’s position the lower courts has started to answer this question in the positive. The article argues that this approach is wrong. It does not take into account the difference between functions of charge and retention as well as the policy considerations supporting privileged position of charge (as opposed to the right of retention) in bankruptcy proceedings. Another question which is raised by this case (although the Supreme Court did not resolve it) is whether the right of retention survives assignment of claim which is secured by such retention. The article suggests that as a general rule in this case the right of retention should come to an end, which means that the possessor is to handle the property back to the debtor. The exception to this rule is assignment by operation of law (such as in case reorganization of companies). The comment is based on the discussion which took place in September 2019 at the Moscow School of Social and Economic Studies. The authors consider some arguments that were put forward by the participants of the discussion.
Keywords: right of lien, pledge, insolvency, assignment, security right
Buy a PDF

 

Vsevolod Baibak Issues of Recovery of Specific Losses in the Practice of the Supreme Court of Russia
Case Comment on the Judgment of the Chamber for Economic Disputes of the RF SC No. 305-ЭС19-7159, 17 September 2019 29 The commentary is devoted to the problem of recovering contract losses in the form of the difference between the price of the terminated violated contract and the price of the replacement deal. The author covers parameters that play a key role for applying this loss calculation method, such as an adequate analogue, soundness of the behavior of the injured party when concluding the replacement deal, etc.
Keywords: contract losses, replacement deal, causation
Buy a PDF

 

Ilya Kokorin One for All, All for One: Insolvency Prevention and the Limits of Freedom of Contract
Judgment of the Supreme Court of the Netherlands from 12 August 2005, NJ 2006/230, ECLI:NL:HR:2005:AT7799 (Groenemeijer/Payroll) with Commentary The judgment of the Supreme Court of the Netherlands in Groenemeijer/Payroll discusses the possibility of forcing one or several creditors to join the agreement proposed by the debtor within the framework of pre-insolvency (out-of-court) debt restructuring in a situation, where the majority of creditors have already agreed to such restructuring. The court concludes that, as a general rule, such coercion is impermissible due to freedom of contract. An exception may be made for cases where the behaviour of dissenting creditor(s) can be qualified as abuse of rights. The translation of the judgment is followed by a concise commentary, which highlights the leading worldwide trend towards the development of pre-insolvency procedures, as an alternative to traditional insolvency (liquidationoriented) procedures.
Keywords: insolvency, restructuring, extrajudicial (out-of-court) agreement, the Netherlands
Buy a PDF

 

 

FREE TRIBUNE

Georgy Tsepov Invalidity of Decisions of a Corporation’s Collegial Bodies: Seeking a Balance of Interests
The criteria for the invalidity of corporate bodies’ decisions used in Russian legislation and law enforcement are contradictory and do not fully ensure the balance of shareholder interests. The roots of the problems are a misleading unification of the legal regulation of meetings of groups that lack legal capacity and a corporation’s collegial bodies as well as the introduction of the generic term «civil community», which unites corporate organizations and groups that do not have capacity. Furthermore, such grounds for the invalidity of decisions as the illegality of their content and violation of the adoption procedure are not clearly distinguished. Organizational rights of the participants are unreasonably detached from their property (investment) interests. Consequently, the transfer of the right to the acquirer of the shares to claim the invalidation of the meeting’s decisions is incorrectly denied.
Keywords: corporation, decision of the meeting, collegial body, invalidity
Buy a PDF

 

Kirill Nam Good Faith Principle as a Legal Principle
The principle of good faith is a complex legal category. That said, in practice and in theory, it is treated and understood from different perspectives. In civil law, the principle of good faith is established formally and reflected in legal regulations that might have different content and a different regulatory impact on legal relations. This principle may act both as a regulatory rule and as a legal principle. The article examines the criteria for differentiating regulation-rules and regulation-principles, assesses the characteristic features of the principle of good faith, formulates and substantiates the meaning, goals and objectives of the principles of good faith, primarily consisting of having the law enforcement process observe the unity of the letter and spirit of the law.
Keywords: principle of good faith, legal principle, interpretation
Buy a PDF

 

Lyubov Doroshenko Security Fiduciary in the French Civil Code
In Russia, fiduciary pledge (fiducia) is frequently considered to be a very controversial concept that cannot withstand competition with security. Nevertheless, a number of foreign jurisdictions codify fiducia in their legislation along with security. The article presents analysis of provisions of the Civil Code of France that have been directly governing fiducia since 2007, including for the purpose of security. The author studies the causes of introduction of security pledge by the French legislators and the assessment of this tool by the French legal community. Eventually, the author concludes that the interest in fiducia has been caused by economic reasons: it allows risks to be distributed between the creditor and the debtor in a different manner than other security methods.
Keywords: fiducia, pledge, security right, ownership rights
Buy a PDF

 

Inese Tenberga, Anna Derbak Conflict of Laws Mechanisms for Protection of the «Islamic Element» in Cross-Border Islamic Financial Transactions
In recent years, transactions have become widespread in the financial market, in which the parties assume the responsibility to comply with the precepts of Sharia. The article raises the question if such conflict of laws mechanisms as the choice of applicable law or incorporation are efficient for protecting the «Islamic element» when resolving disputes from cross-border Islamic financial transactions in state courts. To answer it, the authors analyze the available practice from English and US courts and also simulate the situation of resolving a dispute in Russian state court. The study demonstrates that, when resolving disputes in state courts, protection of the «Islamic element» of a transaction is rather limited. For this reason, the alternative being offered is to turn to a more effective method of resolving disputes — commercial arbitration.
Keywords: Islamic law, Sharia, incorporation, conflict of laws regulation, Islamic finance, Islamic arbitration, choice of applicable law
Buy a PDF

 

Alexey Glazunov Reflective Losses in Corporate Law
The article is devoted to reflective losses, i.e. losses which are personally incurred by shareholders due to a decrease in the value of shares and which are a consequence of losses incurred by a corporation. The author analyzes and balances the pros and cons of the permissibility of the recovery of reflective losses de lege ferenda by the participants directly rather than through derivative claims. The article also provides a brief overview of approaches to the abovementioned issue under foreign laws (France, Germany, the UK and the US). Based on the results of the analysis, the author concludes that there are no policy considerations against the permissibility of recovery of reflective losses which may justify their absolute prohibition. At the same time, the cases where the permissibility of recovery of reflective losses could be the most reasonable seem to be quite specific and are not all-encompassing in nature. Thus, introduction of this legal institute into Russian law requires a very careful and balanced approach as well as fine tuning of the relevant rules.
Keywords: reflective losses, direct claim, derivative claim, corporate law
Buy a PDF

 

Aleksandra Kozina The Analysis of Application of Section 3 Article 307 of the Russian Civil Code
This article resulted from the analysis of more than 450 judgments by arbitration courts concerning the application of the principle of good faith presented in Clause 3 Article 307 of the Russian Civil Code as a result of legislative reform in 2015. Special attention was given to (1) the application of Clause 3 Article 307 of the Russian Civil Code when analyzing the parties’ conduct during the establishment, performance and termination of an obligation; and (2) creation by arbitration courts of the criteria for the principle of good faith in assessing the behavior of a party as faithful or unfaithful. As a result, the author reveals problems when the courts apply the principle of good faith in binding legal relations, proposes possible solutions, and notes positive cases where Clause 3 Article 307 of the Russian Civil Code was applied.
Keywords: good faith, reciprocity, obligation, contract law
Buy a PDF