Magazine Cover
Press to zoom

Buy a PDF

ARCHIVE FOR 2020    RUSSIAN

Октябрь 2020

CONTENT

 

 

Evgeniy Fokin, Aigul Shaykhutdinova Subsequent Judicial Control of Foreign Judgments That Do Not Require Enforcement
Case Comment to the Judgment of the Chamber for Commercial Disputes of the SC RF No. 305-ЭС19-24914, 25 June 2020 This comment analyses the Russian Supreme Court’s judgment which for the first time provides a relatively detailed position of the highest authority on the application of article 245.1 of the Russian Arbitrazh Procedure Code. This article allows to object to the recognition of foreign judgments that do not require enforcement. However, the rules of procedure do not contain a clear and specific algorithm for considering such objections. Hence, the position of the Supreme Court of the Russian Federation was much waited for. The main idea of the judgment is the need to ensure the right of judicial protection and the adversarial principle in cases of recognition and enforcement of foreign judicial decisions. Generally agreeing with this idea, the article illustrates that in this case there are no signs of error in the judicial acts. In this regard, the legal position expressed by the Judicial Chamber for Economic Disputes can be considered as correct in essence, but irrelevant to the case under consideration.
Keywords: recognition and enforcement of foreign judgments, the right to judicial protection, the adversarial principle
Buy a PDF

 

 

Raul Sayfullin Non-Consensual Lien: Optimal Regulation Model
In Russian law, the model of regulation for non-consensual liens is still under development (paragraph 5 of аrticle 334 of the Civil Code). The articles proposes an approach that separates two functions in traditional pledge relations — priority and control. The analysis shows that an economically justified priority in bankruptcy involves the use of collateral as a tool to attract new credit. In this case, the status quo is maintained: the secured creditor gets the advantage of the isolated mass formed as a result of its provision; unsecured creditors remain creditors of the total mass remaining intact. Such collateral is valuable not only for the lender, but also for the debtor, because, firstly, it allows to negotiate better conditions for financing, and secondly, it helps to attract new financing. By contrast, collateral rights from seizure do not help to attract new resources (or optimize previously raised), but only strengthen pre-existing debts. Thus, their application completely ignores the interests of the debtor and unsecured creditors, serving only the seizure creditor. As a result, nonconsensual pledge does not deserve priority in bankruptcy. This conclusion is based on a comparison of the phenomenon under study with related institutions of private law (including consensual pledge, redeemable pledge, subordination of claims and bankruptcy queues). At the same time, the combination of lien and seizure undoubtedly has a practical utility not related to the priority in bankruptcy. It is about improving the control function, which should be focused on maintaining the value of the encumbered asset. It is most clearly disclosed in the interaction between paragraph 2 of point 2, article 358.15 and point 5, article 334 of the Civil Code of Russia. It is obvious that the rights of the company’s member are granted to the mortgagee to maintain the actual value of the pledged share in the charter capital. Does the creditor have unlimited access to the debtor’s corporate rights (including the right to vote on all issues on the agenda of the general meeting of participants)? The American experience shows that the delegation of non-property rights of a shareholder to a pledgee makes sense only when it does not infringe interests of third parties (including other shareholders of the company). It can be stated that the optimal model for a non-consensual lien is based on the search of a balance between interests of the creditor who gets the lien and that of third parties who include unsecured creditors in bankruptcy and other shareholders of a non-public corporation in general corporate law. Therefore, the effectiveness of the regulatory impact should be assessed using the group Paretoefficiency criterion.
Keywords: non-consensual lien, bankruptcy, subordination, non-public corporation, corporate rights
Buy a PDF

 

FREE TRIBUNE

Alexey Glazunov, Dmitry Gorchakov, Ivan Chuprunov Commentary to the Review of Court Practice on Some Issues of Application of Legislation on Business Companies (Part 1)
This first part of the commentary analyses legal positions set out in paragraphs 1–11 of the Review of the Court Practice on Some Issues of Application of Legislation on Business Companies approved by the Presidium of the Supreme Court of Russia on 25 December 2019. In particular, authors address the following issues: (a) jurisdiction in respect of disputes arising from shareholders’ loans, (b) notarisation of decisions in limited liability companies, (c) issues relating to buying out participatory interests in limited liability companies, (d) challenging shareholders’ resolutions in case a shareholder has not been notified of the relevant shareholders’ meeting, (e) standard of due diligence applicable to the counterparties of legal entities, (f) expulsion of participants, and (g) enforced liquidation. Some of the provisions of the Review are really pathbreaking and deviate significantly from the existing court practice. In particular, this is true in respect of the following issues: notarisation of decisions in limited liability companies and expulsion of majority shareholders. Authors of this commentary provide a critical evaluation of the Review from the perspective of dogmatic, law policy and practical considerations, and mark some issues that require further analysis and discussion.
Keywords: corporate law, notarisation, buyout of participatory interest, principle of causation, principle of relevance, due diligence, expulsion of shareholders, corporate conflict, enforced liquidation
Buy a PDF

 

Pavel Tarasov Correlation between Breaching Party’s Liability and Tortious Liability of a Bad Faith Interferer
A bad faith interference with one’s obligations can lead to contractual liability of a party at fault as well as tortious liability of a bad faith interferer. The correlation between them is being considered in the article. On the premise that it is possible in principle to bring a tort claim against a bad faith interferer, the article considers whether it is possible to make him liable jointly with, or subsidiarily to, the contractual counterparty. In addition, the article outlines how bad faith interferer’s tortious liability is classified in foreign jurisdictions. The article analyses current provisions of Russian legislation in order to determine whether they are applicable to the tortious relationships involving a bad faith interferer. The examples are mentioned where rights of injured persons can be remedied by way of a tort claim against the bad faith interferer. The conclusion has been drawn in accordance with which it would be worth to amend the Russian legislation in order to govern bad faith interferer’s tortious liability for inducing a breach of obligation.
Keywords: tortious interference, tort, joint tortfeasance, joint and several liability, secondary liability
Buy a PDF

 

Tatyana Boyko, Aleksandra Sofronova, Svetlana Apsalikova, Ivan Ischenko, Aleksandr Ivanov Review of Legal Positions of Arbitrazh Courts on Corporate Law Issues for 2019 and 2020
This judicial review covers the most interesting and important, in the authors’ opinion, judicial decisions on corporate issues for the period from 01.01.2019 to 31.08.2020, as well as brief comments on each of the cases to draw attention to the most significant aspects of the case, express authors’ opinion or highlight the trends evolving in practice. Based on the results of the analysis of the judicial practice, it is safe to say that the Russian courts (especially the Supreme Court of the Russian Federation) often move away from formal interpretation of law and try to apply it teleologically. The courts have rather liberal approach to parties’ agreements on corporate governance and profit distribution. As before, judicial defense is granted only to a party acting in good faith and judges block any attempts to challenge any action or recover damages if a claimant circumstantially has confirmed lawfulness of such action or the court revealed other signs of abuse of legal rights. Some of legal positions can be defined as game-changing and long expected, e.g. recognition of a charter and a resolution of a meeting as a juridical transaction and application of the general rules on invalidity of legal transactions to them, recognition that it is possible to compel a shareholder to send a mandatory offer and to recover damages in case of manipulating with the term for sending a mandatory offer.
Keywords: corporate law, shareholders agreement, challenging resolutions and transactions, director’s liability, mandatory offer
Buy a PDF