Constitutional Court of Russia pointed to the right of a person controlling debtor to challenge the inclusion of debt in the register of creditors’ claims

The Constitutional Court of Russia considered the case on the complaint of a person controlling debtor who was brought to subsidiary liability.  The applicant believed that he had a right to challenge the debts to the tax office, which were included in the register of creditors’ claims, but the lower courts rejected his claims.

As part of the company's bankruptcy case, creditors filed claims and were included in the register of creditors’ claims. Among them, there was the tax inspectorate with multi-million dollar debt. Subsequently, as part of a bankruptcy case, the applicant was brought by the court to subsidiary liability for the company's debts on an equal basis with other controlling persons. The applicant tried to challenge the amount of the company's debt to the tax authority, asking to restore the time limit for filing a complaint against the decision, but his claims were rejected.

The courts, referring to the norms of the APC and the Insolvency Law, indicated that in the case under consideration, a person controlling debtor had no procedural right to challenge the decision.

Then the applicant decided to go further and filed a complaint about the inconsistency of the Constitution with the provisions of Article 42 of the Arbitration Procedure Code of the Russian Federation and Article 31 of the Bankruptcy Law with the Constitutional Court of the Russian Federation. The Constitutional Court, in turn, examined the application in detail and came to the conclusion that it was justified.

The Board agreed with the arguments that a person controlling debtor had a right to challenge earlier judicial acts on the inclusion of debts in the register of creditors’ claims as affecting his rights and obligations. This is due to the fact that the applicant will have to bear material liability to creditors in a situation when the debtor's property is not enough for settlements. Therefore, he should have the right to influence the amount of emerging debt (decree of the Constitutional Court of the Russian Federation of November 16, 2021).