The Supreme Court of the Russian Federation confirmed the inadmissibility of a bank's unilateral debiting of money from a client's account. The dispute concerned the payment by the depositary of funds from the redemption of foreign bonds and coupon income. The plaintiff's securities, which were registered with Euroclear, were redeemed by the issuer in April 2022. At that time, the Russian depositary credited the cash amount corresponding to the amount it had received in Euroclear to its client, the owner of the securities. However, then the bank, which also provided depository services, wrote off the money from the client's account, citing sanctions and blocking of the account in Euroclear.
The peculiarity of this case is that the defendant combined the functions of a depositary and a bank: the money was credited to the client's account on behalf of the defendant as a depositary, and then, acting as a banking organization, the defendant wrote off the money in its favor. Thus, the bank, in the absence of legal grounds, made a unilateral write-off of funds from the current account of the client in violation of the terms of the agreement on comprehensive banking services for individuals, that is, there was a violation of the rights of the plaintiff as a consumer of financial services.
The Supreme Court of the Russian Federation agreed with the arguments of the Bartolius attorneys that the unilateral debit was unjustified, and the presence of the client's status of professional investor does not indicate the presence or absence of the bank's right to the disputed funds. The Supreme Court of the Russian Federation overturned the appealed judicial acts and sent the case for a retrial.
The ruling of the Supreme Court of the Russian Federation in this case introduces significant changes in the practice of applying Article 475 of the Civil Code of the Russian Federation on contractual assurances in the sale of LLC shares. Previously, the courts did not apply this provision to such transactions. Now the Supreme Court has confirmed that Article 475 of the Civil Code of the Russian Federation applies to cases where the seller violates assurances in such agreements. The Supreme Court sent the case for retrial, emphasizing on the issue of the amount of liability for false assurances/ The Court specified that its mechanism depends on the impact of false assurances on the recipient's decision to conclude the transaction. The consequences are conditioned by the following circumstances:
- the person who gave the assurance, knowingly aware of its falsity, is liable even if the other party did not discover the falsity on its own;
- the recipient of the assurances, who knew of their falsity, is not entitled to bring claims against the counterparty, since he did not rely on the assurances (this knowledge may be proved either by facts or by the totality of evidence).
In this case, the key question was: did the purchaser know of the company's debts hidden behind the defaults? Bartolius' attorneys proved that their principal did not know about the falsity of the representations, and the decision of the Arbitrazh (Commercial) Court of Moscow, based on forensic expertise, confirmed that the novation agreement had been falsified. The fact that the purchaser was already a participant in the company and owned a 50% stake in it does not confirm his knowledge of the unreliability of the representations.
In its Ruling on the dispute of Siberian Investment Group LLC, the Supreme Court of the Russian Federation continued to develop the practice of the inadmissibility of arbitrary increases in the amount of bank commissions for making payments from legal entities to individuals without an economically justified calculation. In this case, the bank wrote off more than 2 million rubles from the client's account for making payments under a real estate purchase and sale agreement.
Canceling all judicial acts in the case and ordering a retrial, the Supreme Court of the Russian Federation noted that the use of significantly different commission amounts when making a transfer in favor of an individual or a legal entity within the meaning of clause 2 of Art. 428 of the Civil Code of the Russian Federation is clearly burdensome. The lawyers of Bartolius Law Firm were able to insist on the application of this particular rule of law in cases of unfair banking commissions, defending their client.
This dispute concludes a number of similar cases on the application of Article 428 of the Civil Code of the Russian Federation to relations from agreements for settlement and cash services, which were considered by the Supreme Court of the Russian Federation in 2023-2024.
More than 5 million rubles were written off from the client's account as a bank commission related to dividend payment. However, such an operation was erroneous. The recipient returned the money to the payer the next day. The bank claimed that it notified the payer in the bank-client system about the increase in tariffs for making payments in favor of individuals; there were no objections from the client.
Nevertheless, the lawyers of Bartolius Law Firm managed to prove in the Supreme Court of the Russian Federation that despite the client having information about the current 10% commission, this amount is unfair and was established by the bank in violation of Art. 10 of the Civil Code of the Russian Federation, the principle of reasonableness and good faith in the behavior of a credit organization has been violated.
The Supreme Court of the Russian Federation agreed with the position of the lawyers of Bartolius Law Firm, canceled the appealed judicial acts and ordered a retrial.
The court considered the issue of accepting the claim of PJSC Rosseti against JSC GES. The claim was based on the demand to pay a penalty in the amount of 1.2 billion rubles for violating the deadline for completing construction work on the creation of an overhead power line Luzhskaya - Pskov. The Supreme Court overturned the acts of the lower authorities, granted the decision in favor of PJSC Rosseti, accepted the amount of the penalty of 1.2 billion rubles, established the final balance and included the penalty in the register of creditors' claims, reducing its amount by the amount of actual execution.
This position of the Supreme Court is important for all disputes between Rosseti and contractors in the event that they violate construction deadlines: both on the issue of the base for calculating the penalty (of the entire contract price), and regarding the penalty rate of 0.4%, which is typical for client contracts. In addition, recognition of the parties as equal partners also has important practical significance.
The case went through 3 rounds and was considered twice by the Supreme Court, where during the second round the court considered the case on the merits, which happens extremely rarely.
The Supreme Court considered the question of the significance of the verdict in a criminal case for a previously resolved arbitrazh case. The lawyers of the Bartolius Law Office (together with a colleague from the other law firm) represented the interests of the client, who demanded a review of the arbitration case due to newly discovered circumstances.
In this case, the arbitrazh courts charged the defendant rent for using the loader for a certain period, although the defendant stated that during this period the loader was actually in the plaintiff's possession. Subsequently, a verdict was passed in a criminal case against the director of the landlord in the case of attempted fraud. Among other things, the verdict established that the loader was indeed in the plaintiff's possession.
The defendant demanded a review of the case due to newly discovered circumstances, but the lower courts refused him, citing the fact that the director in his personal capacity was not a participant in the arbitrazh case, and therefore the verdict has no prejudicial force.
The Supreme Court expressed the following position. The verdict in a criminal case may serve as a basis for reviewing the arbitrazh case on newly discovered circumstances. The fact that the convicted person was not a participant in the arbitrazh case in his personal capacity is not an obstacle to the review of the case.
The decision was made in favor of the applicant, the case has been sent for reconsideration.
The Supreme Court considered the unusually high bank fees charged for transfers to individual accounts. Bartolius Lawyers, together with colleagues from other law firms, represented the interests of the bank’s client. In this case, the bank charged the client with a 1.3 million rubles bank fee for the transfer of 13 million rubles to an individual’s account in another bank. As it turned out, the 10% fee was provided for in a Tariff Guidance, adopted after account opening application was signed and was posted in the public domain for clients to review.
The Supreme Court agreed that the bank acted in bad faith. In itself, the provision on unilateral amendments to the contract terms are acceptable, but such amendments shall be economically justified. The bank should not introduce “barrier” fees that prevent economically meaningful transactions on the account.
The court ruled in favor of the client, the case was remanded for retrial.
The Supreme Court of Russia considered the complaint prepared by Bartolius lawyers in the interests of the bankruptcy creditor Syngenta LLC and agreed with the argument that the amount of the arbitration manager’s personal contribution to the result of the procedure was subject to research and evaluation. The Supreme Court indicated that the courts, by setting the maximum interest rate, avoided defining and analyzing all the circumstances included in the subject of proof in the dispute. Thus, the lower courts neutralized the stimulating effect of this part of the remuneration, which the Supreme Court of the Russian Federation found unacceptable.
The analyzed case has significantly influenced case law; it is revolutionary: now, when considering similar cases, it is necessary to establish a balance of interests of insolvency practitioners and creditors counting on a fair distribution of the bankruptcy estate. The case was included in the review of the case law by the Supreme Court of Russia "Review of the case law on the participation of an arbitration manager in a bankruptcy case" paragraph 23 of 11.10.2023
The Supreme Court of the Russian Federation heard the case on the Syngenta LLC’s cassation appeal, prepared by Bartolius Law Office, against judicial acts on the inclusion of the claims of Rusagro Group of Companies LLC in the creditors’ register of Solnechnyye produkty – Maslo JSC. An intra-group guaranty makes economic sense when the group borrows money from an external lender. When the creditor is a member of the group, this situation is subject to a separate thorough study, since it allows you to create a controlled fictitious creditor debt, in order to reduce the percentage of claims of independent creditors. According to the Supreme Court of the Russian Federation, since the creditor, the main debtor and the guarantor are members of the same group, it is they who are obliged to disclose reasonable economic motives for making a security transaction, that is, creating a “debt to oneself”. The Supreme Court, following the results of the hearing, sent the dispute to the second round for a retry.
Based on the cassation appeal prepared by the Law Office, the Supreme Court of the Russian Federation considered a separate dispute based on the request of LLC Almaz Capital on the inclusion of the debt acquired from the Bank in the amount of more than 2.5 billion rubles in the register of claims of the creditors of the citizen debtor. Within the framework of this case, the specialists of the Law Office managed not only to establish the actual affiliation between the lender and the main borrowers for loan obligations through the control by a single beneficiary, but also to ensure the suppression of unfair actions of the lender who filed the claim. The Supreme Court upheld the position on the obligation of the group's beneficiary to act in good faith and reasonably in relation to the organizations belonging to him and their independent creditors. The behavior of LLC Almaz Capital in the form of a selective presentation of a claim to borrowers and guarantors belonging to the same group and the implementation of a loss-making tolling scheme within the framework of the procedure of one of the borrowers was declared inadmissible. Based on the results of the consideration of the cassation appeal, the Supreme Court overturned the acts of the lower courts and refused to include the claims in the register by Almaz Capital LLC.
In the Supreme Court the Law Office represented the interests of the copyright holder, who had previously won the case against the violator of his rights, but, contrary to common sense, remained in debt before him in the form of legal expenses. The Supreme Court resolved the dispute in favor of the copyright holder in contradiction, as it might seem, with the letter of the law, but in accordance with common sense. The Institute sued for violation of its trademark rights in the amount of 5 million rubles. The courts ultimately upheld the lawsuit, but only partially - in the amount of 100 thousand rubles (2% of the amount in controversy). Since in the event the claim is partially satisfied, the legal costs are attributed to the parties in proportion to the amount of the claims satisfied, the courts collected 98% of the defendant's legal costs from the Institute: about 400 thousand rubles. As a result, the situation was paradoxical: despite winning the case on the merits, the plaintiff turned out to be the defendant, and not vice versa! The Supreme Court overturned the acts of lower courts, citing a violation of the balance of constitutional interests of the parties and the principle of good faith. The case was sent for reconsideration in the light of these considerations.
Bartolius Law Office specialists represented the creditor in the bankruptcy case of Holding Company Glavmosstroy JSC. A composition agreement was concluded, which the creditor considered economically ineffective and deliberately impracticable. According to the creditor, it was concluded by the forces of affiliated creditors solely for dragging the case and in order to shed liability of controlling persons. The Law Office managed to have the agreement abrogated in the first cassation, and the judge of the Supreme Court refused to remand the case for retrial. However, according to the debtor’s appeal, the Deputy Chairman of the Supreme Court evoked the case and still remanded it. The Deputy Chairman in his ruling expressed the opinion that the cassation in general cannot analyze the agreement for effectiveness, as this would be a “reassessment of the actual circumstances”. Law Office specialists were able to ensure that this dangerous wording was not included in the final ruling of the Supreme Court. As a result, the Supreme Court canceled both the decision of first cassation and the decision of the court of first instance, which approved the settlement agreement. The Supreme Court referred to the fact that the parties had already concluded a new agreement, and therefore there is no need to approve the old one. Thus, although the debtor's appeal was formally satisfied, in essence, the court found in favor of an independent creditor (abrogation of the disputed composition).
On a cassation appeal prepared by the Law Office, the Supreme Court examined a separate dispute in the framework of the bankruptcy case of Eurofinance LLC. That dispute was initiated at the request of Astoria LLC. The company requested that its claim be included in the register of creditors’ claims of the debtor. In the framework of this case, Bartolius also managed to convince the Supreme Court of the Russian Federation that the creditor and the debtor were affiliated though there was no formal connection. The peculiarity of this case in comparison with the first and other similar cases that the Supreme Court considered was that for the first time, for the purpose of considering the inclusion of claim in the register of claims, the execution of a guarantee agreement was deemed mala fide, and not the agreement itself in the presence of a valid debt. The Supreme Court upheld the position that, while having the opportunity to choose the method of repaying the real debt, the controlling person chose the option of repayment on behalf of the associated guarantor in order to further include controlled debt in the register of debts. Such behavior was considered inadmissible.
Representation of interests of creditors in a bankruptcy case in compliance with the venue jurisdiction. The debtor artificially changed the venue of the bankruptcy case by changing the registration address and terminating the status of an individual entrepreneur before applying for bankruptcy. Bartolius`s lawyers repressed this abuse of right. The decision of the Supreme Court became one of those forming the case law on the issue of combating procedural abuse in the form of a change in the territorial jurisdiction of a dispute in anticipation of the initiation of bankruptcy proceedings. This phenomenon is known as forum shopping.
On a cassation appeal prepared by the Law Office, the Supreme Court examined a separate dispute, where Rubikon LLC sought to include its claim in the register of claims of Eurofinance LLC. Bartolius managed to convince the Supreme Court that the creditor and the debtor were affiliated though there was no formal connection, and that the claim was filed with the malicious purpose – to obtain control in bankruptcy case to the detriment of the interests of independent creditors. The case was forwarded to the retrial with the motivation beneficial to the client. This allows for counting on the refusal to include the claim of this creditor in the register and the subsequent majority status of the principal.
These are similar processes within the framework of a single project. The Law Office represented the interests of the creditor in the bankruptcy case when it was necessary to challenge the offsets between a bankrupt company and an affiliate. The Supreme Court considered issues regarding the application of the limitation period and the possibility of challenging a offset of liabilities on the grounds provided for by the Bankruptcy Law. Based on the results of the consideration of cassation complaints prepared by Bartolius, the Supreme Court of the Russian Federation upheld the decisions of the first instance court which recognized transactions invalid, while determining the beginning of the statute of limitations for challenging transactions by the bankruptcy administrator.
The most important case for Russian charities, that has formed a precedent. The courts of the first instance and appeal dismissed the case of the “Gift Of Life“ prohibiting the Krasnoyarsk clone fund (with the same name) from using the name “Gift of Life” (“Podari Zhizn”). This entailed the deception of benefactors and the creation of new clones of the Fund in other regions. The Supreme Court of the Russian Federation has formed the legal position necessary for the caselaw that the name of a non-profit organization is subject to judicial protection from the actions of mala fide persons.
The dispute concerned recovery of an investment contribution, default Law Office charge, interest and the specific performance by the producer. The bureau represented the interests of the client, including in the Supreme Court, which, while resolving the dispute, came to the conclusions that were essential for the case law. These findings relate to the principle of freedom of contract and rules for the interpretation of its terms. Of particular importance is the question of legal nature of the investment contract for making the film: whether it is a joint activity agreement, a futures contract or another unnamed contract. Lawyers of the Law Office managed to achieve the desired result for the client. The challenged judicial acts were canceled, the amount of the investment contribution and penalties were recovered in favor of the client.
Law Office client was blamed for abuse of dominant position on energy market. The Supreme Court of the Russian Federation, based on the results of the consideration of complaints prepared by the Bartolius lawyers, noted that courts infringed evidentiary rules and rules of evaluation of evidence. In particular, the court of cassation did not take into account that the possibility of proving concerted actions through their result in the absence of documentary evidence of an agreement to commit to them, concerns only concerted actions, and not agreements per se.
The Law Office represented the interests of the beneficiary, who was denied payment banker guarantee. After two rounds of consideration the Supreme Court upheld the ruling in favour for the Law Office client and confirmed the independence of the guarantee payment from the circumstances of the fulfillment of the main obligation, including in the context of arguments about the abuse by the beneficiary of the right to present the corresponding claim.
This is a case on repealing a court order about holding a person liable. Law Office`s clients, owning 38.459% shares in Ingosstrakh IJSC, applied to the company with a request to provide the documents required by the law on joint-stock companies, including a copy of the employment contract with the general director. Ingosstrakh IJSC refused to provide them. For this reason, minority shareholders applied to the Federal Service for Financial Markets (FSFM) with a claim to hold the company liable for administrative offence. FSFM satisfied the claim. The issuer was held administratively liable. Ingosstrakh IJSC appealed against the decision. The Moscow City Commercial Court repealed the decision of Federal Service for Financial Markets, the appeal, cassation instances cassation instanses upheld the ruling. The Presidium of the Supreme Commercial Court of the Russian Federation found for the client of the Law Office, repealed the decisions of lower courts, deciding that failure to submit an employment contract significantly violates the interests of shareholders and constitutes an administrative offense. The contested judicial acts shall be repealed as violating the uniformity in the interpretation and application of the rules of law by the commercial courts.
Challenging the decision of the extraordinary general meeting of Ingosstrakh IJSC. Clients of the Law Office, who owned a 38.459% of shares in Ingosstrakh IJSC, challenged a number of clauses of the Regulation on the Board of Directors of the issuer adopted at an extraordinary meeting of the company. The Moscow City Commercial Court upheld the claim of the Law Office's Clients, the decision of the first instance was upheld in the appeal and cassation. Opponents - Ingosstrakh IJSC - have filed a claim with the Supreme Commercial Court of the Russian Federation challenging decisions of lower instances. The Presidium of the Supreme Commercial Court considered that the clauses of the Regulation disputed by the plaintiff violate the rights of minority shareholders. The supervisory appeal of Ingosstrakh IJSC was dismissed.
On enforcement to issue bank statements. Milange LLC (client of the Law Office) and M2M Private Bank LLC entered into an agreement on the opening and operation of a bank account, according to which the bank was obliged to provide account statements to the client. However, from a certain date, the bank stopped providing account statements to the client, referring to the fact that from the date of termination of the bank account agreement, the client loses the right to receive bank statements for the period prior to the termination date. Milange LLC filed a lawsuit. The courts of first instance, appeal and cassation did not satisfy the claims of the client. The court of first instance referred to the termination of the bank account agreement by order of the client, considering that the absence of a valid contract does not give the client the right to demand performance of obligations under the contract. The Presidium of the Supreme Commercial Court of the Russian Federation established that the trial court did not take into account the client’s right to demand fulfillment of obligations for the term of the contract. In addition, the courts of lower instances violated the provisions of the procedural law. Namely, the courts ignored the statement of Milange LLC about falsification of the client’s order to close the account. Based on the results of the consideration of the case, the Supreme Commercial Court ruled that the findings of the lower courts do not correspond to the established circumstances and violate uniformity in the interpretation of the rules of law. The Supreme Court ordered a retrial. At a new consideration, the court satisfied the plaintiff's claims in full.
On recovery of expenses for legal services. The principal of the Law Office, Trading House of the South Mining and Chemical Company LLC, sought to recover legal costs from the tax authority in the case on refusal to apply the 0% VAT rate and other tax violations that allegedly occurred. The tax authority unequivocally challenged the claimed amount of compensation, the principal insisted on the full compensation of expenses for legal services. Lower courts, in the absence of evidence of excessive costs, reduced the amount claimed. The litigation reached to the Supreme Commercial Court of the Russian Federation, which satisfied the claims of the principal, recognizing that the rulings of the courts below violate the uniformity in the interpretation and application of the rules of law by commercial courts and indicating that the courts have no right to reduce the costs incurred in the absence of evidence.
Contesting the claims of the Federal Tax Service. The client contested the decision made after field tax audit. According to this decision, Martol LLC was prosecuted for allegedly unreasonable application of the 0% tax rate on value added tax when selling exported goods. The court of the first and appeal instances found for the client, obliging the Federal Tax Service to reimburse the company for VAT. This court decision was enforced, the specified amount of tax was refunded to the client. However, later the inspection appealed to the Moscow City Commercial Court for review of the decision due to newly discovered circumstances. Subsequent decisions in appeal and cassation were ruled in favor of the tax service. The case was forwarded to the Supreme Commercial Court of the Russian Federation, which established that the arguments referred to by the inspectorate as newly discovered circumstances are not significant for deciding whether the tax rate of 0% VAT and tax deductions for exporting goods are justified. The Supreme Commercial Court of the Russian Federation decided to refuse to satisfy the claims of the tax service.
The case of the obligation to return aluminum scrap. Metallurgical Technologies LLC and Okamet LLC entered into an agreement on the processing of aluminum raw materials into products and alloys. Pursuant to the contract, the contractor (client of the Law Office) undertook to return products to the customer after processing. The specification of the contract stipulated that the customer provides aluminum scrap of the appropriate groups and in the appropriate amount for processing, from which, when remelted, the contractor undertakes to receive the agreed quantity of products in accordance with government standard. However, the customer violated the terms of the specification, and as a result the contractor was unable to obtain the required amount of alloy. The courts of the first and appellate instances ruled in favor of an opponent of the Law Office. The The Presidium of the Supreme Commercial Court came to the conclusion that the courts did not consider the question of whether the defendant had the opportunity to fulfill the obligations and did not see any signs of unjust enrichment in the actions of the client of the Law Office, and therefore the case was sent to the first instance for a new trial.
The Law Office represented the interests of the principal in the case on the recovery of more than 20 billion rubles (about $4 mln). This is the sum of a promissory note of Metallurgical Plant named after A.K. Serov OJSC. Opponents filed a counterclaim to hold the transaction for the issuance of the indicated note invalid due to a violation of the rules of currency legislation. The court satisfied the claim of the Law Office. The Court of Appeal declared the promissory note transaction invalid due to its nullity. The nullity was based on violation of currency legislation rules, since the amount of the note was denominated in foreign currency, and the drawer did not have special permission for currency transactions. The Presidium of the Supreme Commercial Court rendered in favor of the client, stating that although the note was issued in foreign currency, its amount, according to the bill legislation, was payable in rubles, and since the bill itself did not indicate a payment in foreign currency, there was no violation of currency legislation.
