Supreme Court of Russia indicated that FAS has no right to control bankruptcy auctions

Supreme Court of Russia indicated that FAS has no right to control bankruptcy auctions

Supreme Court of Russia indicated that FAS has no right to control bankruptcy auctions
The corresponding legal position is set out by the Highest court in Ruling No. 309-ES21-27706 dated April 26, 2022 in case No. A34-2459/2020.

The issue raised for the resolution by the Supreme Court of the Russian Federation was as follows: as part of the bankruptcy case of the debtor, his property was put up for auction, the citizen sent an application, but was not allowed to participate in the auction due to the failure to provide the notarized consent of the spouse to the transaction for the acquisition of property.

According to this, the citizen filed a complaint with the FAS against the actions of the bankruptcy trustee, due to the results of which the antimonopolists came to the conclusion that the bidding procedure was violated - due to the contradiction of the requirement to provide the spouse's notarized consent to the law - to the paragraph 11 of the Article 110 of the Federal Law of October 26, 2002, No. 127-FZ “On Insolvency (Bankruptcy)”, and issued an order to eliminate violations to the organizer of the auction.
Having disagreed with the specified instruction, the organizer of the auction tried to challenge the decision in court.
Following the consideration of the application, the court of first instance agreed with the position of the antimonopoly authority that the organizer had established unlawful requirements for the participants in the auction.

The Court of Appeal overturned the decision and satisfied the application, in support of which it was stated that the FAS did not have the right to control the bankruptcy auction.

The Arbitration Court of the Ural District, in turn, supported the first instance, noting that the powers of the antimonopoly authority to consider complaints about violations of the procedure for conducting auctions in the framework of a bankruptcy case, as well as the sale of state or municipal property, are fixed in paragraph 42 of Part 1 of Art.  23 of the Federal Law of July 26, 2006 No. 135-FZ “On Protection of Competition”.
Based on the results of consideration of the cassation appeal against the cassation ruling, the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation agreed with the appeal.
In its definition, the Supreme Court of the Russian Federation indicated that the purpose of monitoring compliance with antimonopoly legislation is first of all to protect the public interest, namely the provision and development of competition. The control over bankruptcy auctions, in turn, involves the protection of private interests, which means that it concerns the debtor and creditors, and is carried out by the court.

At the same time, arbitrary interference by the Federal Antimonopoly Service in the conduct of auctions may result in obstruction of the ability to sell the debtor's assets quickly and with maximum benefit.  That is why the antimonopoly body, exercising its powers to control the auctions held in the framework of a bankruptcy case, is obliged to justify such interference from the point of the law on protection of competition.

16.05.2022