Журнал ЗАКОН

Case Comment on the Judgment of the Chamber for Civil Cases of the SC RF No. 11-КГ19-15, 13 August 2019 The problem of breaking the chain of causation relates to cases when harm arises not from the wrongdoer’s conduct itself, but as a result of a factor which is subsequently added to it (e.g. a third party’s action, the aggrieved person’s conduct or a natural event). The author comments on the Judgment of the Judicial Chamber for Civil Cases of the Supreme Court of the Russian Federation, in which the Chamber considered the issue of whether the chain of causation had been broken by natural event (a strong wind).

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Keywords: causation, limits of liability, breaking the chain of causation

Case Comment on the Judgment of the Chamber for Commercial Disputes of the SC RF No. 305-КГ19-17303, 19 July 2019 The article deals with the legal problem of imposing the risk of error in the calculation of cadastral value, which led to its multiple understatement, when this calculation is used to determine the property tax for organisations. Although the very issue that has arisen in the judicial practice has already been solved by statute, the argumentation of the Supreme Court is doubtful from the point of view of legal logic. In the author's opinion, the reasoning chosen by the highest court should not be extended to other categories of cases.

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Keywords: cadastral value, property tax, legal expectations

Case Comment on the Judgment of the Chamber for Commercial Disputes of the SC RF No. 305-ЭС19-13455, 29 November 2019 The dispute was over whether a Russian organisation had been properly notified of proceedings in foreign arbitration. The dispute came down to two simple questions of fact: to which address was the notice sent, and was the address mentioned in the agreement between the parties? Unfortunately, the courts of all instances performed poorly in this case. The first instance settled the dispute in favour of the Russian company, but it was not clear from the text of the judgment what exactly the answers to these two questions were. The cassation mechanically approved this decision, citing the fact that it could not review the facts. The second cassation, instead of pointing out the errors of the lower courts and referring the case to a new trial, actually took over the role of the first instance and established the facts in its own way, after which it settled the dispute in favour of the foreign company. It seems that none of the courts, including the Supreme Court, has fulfilled its task properly.

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Keywords: international commercial arbitration, notification, question of law, question of fact

Judgment of the Supreme Court of Austria from 20 February 2018 10Ob68/17y with Commentary The decision of the Austrian Supreme Court addresses the problems of joint liability of debtors in a situation where it is not possible to determine who is responsible for the loss and at the same time a limitation of liability agreement has been concluded between the some of the joint debtors and the creditor. In addition, the court clarifies the legal nature of recourse claims and the manner in which they are subject to the limitation period.

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Keywords: joint liability, damages, limitation of actions, Austria

Premises in buildings are one of the most common objects of contracts and therefore shape the most relevant aspects of practice. However, the concept of premises as the subject of a right has barely been developed, and courts therefore make inconsistent and often wrong decisions. According to the exact meaning of p. 1 of art. 130 of the Civil Code, premises (a parking space) are a subject of a right which is not identical to buildings and structures, i.e. connection of premises with land (a land plot) is not essential for it. At the same time, premises are not an integral part of the building, and this is a crucial conclusion. Since a thing is a material object which can be in possession, premises as an object arise from the moment of establishment of independent possession of it, albeit not quite exclusive, which makes us agree with the idea that premises are a fictitious thing, having the qualities of a thing only by virtue of indication in the law. Premises as an object (thing) may arise even before the right to it is registered. These conclusions entail a number of others. In particular, premises in a building do not share the fate of the building, neither in bankruptcy procedures in the event of the bankruptcy of the developer, nor in the framework of mortgage rights to the building. Case law must be brought into line with this.

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Keywords: premises, building, thing, subject of a right, mortgage, insolvency (bankruptcy)

From the point of view of law policy, the author substantiates need for such grounds for termination of a pledge as the expiration of the statute of limitations on the main obligation when the pledgor is a third party. The mortgagee may lose interest in going to court after the expiration of the statute of limitations on his claim. The problem is articulated using the example of real estate — in the unified register of real estate rights, a record of the encumbrance is kept, preventing the mortgagor from freely managing his property. In this case, the encumbrance imposed on real estate cannot maintain its security function and force the pledgor to fulfill the obligation, because the asset of the third party does not ensure repayment of his own debt, but that of someone else (the main debtor). In summary, a right of pledge which is not capable of enforcement due to the expiration of the statute of limitations should not limit the rights of the owner.

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Keywords: pledge, mortgage, termination of a pledge, expiry of the statute of limitations, real estate

Two possible models of the recourse claim — assignment rights of the creditor (subrogation) and creation of new claim (recourse in the narrow sense) — are analysed in the article. At present both constructions are used by the Russian civil law for different legal situations. The author tries to identify the criterion which underpins the doctrine’s choice of certain construction in each case. It is demonstrated that the choice cannot be satisfactorily explained by the doctrine. The article considers then practical differences between regression and subrogation (such as limitation period, transfer of security obligations, size and composition of claims, legal position in the bankruptcy process) and concludes that there are no dogmatic or policy reasons for choosing one of the models. On the basis of a comparative and historical legal review the author proposes how the recourse claim should be regulated.

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Keywords: recourse claim, subrogation, joint obligations, performance by a third person

The subsidiary liability of controlling persons in the bankruptcy of the debtor is one of the effective mechanisms aimed at replenishing the bankruptcy assets. However, neither legislation nor settled case law allow its application in the case of insolvency of the individual entrepreneurs. The author suggests that this approach is unjustified, and also contradicts to the very purpose of the bankruptcy proceedings, namely: equal satisfaction of the claims of competitive creditors. The legislator creates unjustified privileges for individuals by removing the burden of responsibility from the persons who actually contributed to the bankruptcy of the businesses under their effective control and by forgiving their bad faith. The author arrives at a conclusion that it is necessary to apply the provisions of Chapter III.2 of the Federal Law № 127-ФЗ of October 26, 2002 «On Insolvency (Bankruptcy)» in personal bankruptcy.

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Keywords: subsidiary liability, personal bankruptcy, individual entrepreneur, controlling persons

Commented Translation of the Judgment of the United Chamber of 13.04.2018 No. 285 What happens to a financial lease agreement in the event of a sale contract’s rescission due to flaws in the purchased item? In 2018, the Cassation Court of France overruled its 1990 approach against the background of a general change in court practice concerning interrelated agreements. The translation of the decision is followed by a translation of the report made by the judge reporting the case and introductory commentaries explaining the circumstances surrounding the decision.

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Keywords: interrelated agreements, rescission, leasing, cause, abstract character, French law

The general provision on recovery of the price difference upon termination of a breached contract was enacted into civil legislation in 2015. The legal effect of art. 393.1 of the Civil Code to shift the risk of a change in price after the termination to the breaching party. Notwithstanding the fact that this provision has been in operation for nearly five years, the practice of the recovery of damages through concrete and abstract methods upon the termination of a lease agreement is very rare and full of gaps. Cases of improper application of this article are common. However, at the same time there is a tendency, which may be seen, e.g., in the Supreme Court’s judgments, to apply art. 393.1 correctly with proper regard to the specific features of lease agreements.

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Keywords: recovery of the price difference, lease, damages