Supreme Court of Russia pointed to the dual responsibility of a person controlling debtor as a surety

The highest court considered the case on bringing the person controlling debtor to subsidiary liability.  The issue caused legal uncertainty among colleagues at lower levels, but the Supreme Court of Russia explained how to handle such cases.

The legal situation was that the same individual was both the controlling person of the debtor (CPD) and the guarantor for a number of loan agreements concluded by the debtor with the bank.

Due to the fact that the money was not returned within the framework of the agreements, the bank, on the one hand, initiated a lawsuit against the guarantor, collecting the debt in general jurisdiction, on the other hand, made appropriate demands to include the debt of the main borrower in the register of creditors’ claims.

Subsequently, within the framework of the bankruptcy case, the bankruptcy trustee filed a claim for bringing a person controlling debtor to subsidiary liability, and the court of first instance supported the applicant. However, the judges of the appeal and district courts indicated that the person in question already had liability arising from the surety agreement. Then the dispute was sent for consideration of the Supreme Court of Russia.

The Economic Board agreed with the court of first instance, noting that the guarantor's responsibility arose from civil law relations, and the responsibility of a person controlling debtor - from delictual relations. Thus, the responsibility is not the same, as it differs in reasons. This means that both varieties have the right to exist (decision № 308-ES17-15907 (7) dated December 27, 2021).