THE SUPREME COURT: DEBT RELEASE CANNOT CAUSE INVALIDITY OF TRANSACTION

The Economic Board of the Supreme Court of Russia, considering the complaint against the decisions of the lower courts, outlined its position, different from the opinion of colleagues, on the issue of the debt release under the subordinated deposit agreement.

Such an agreement cannot be prematurely terminated or changed without the consent of the Bank of Russia, and this is also a certain risk that the parties take consciously.

The transaction was contested by the bankruptcy administrator of the bankrupt company, which previously released a large sum of the bank’s debt. At the same time, the money was provided under two subordinated deposit agreements.

The courts of three instances recognized this debt release as invalid and ordered the bank to return the previously released amount to the bankruptcy estate of the company.

However, when the complaint was considered by the judges of the Supreme Court, the latter noted that the debtor company and the bank that received the deposit are linked by a common economic interest.

The company controlled a significant part of the bank's shares through a third party, therefore, the agreement on the release of the subordinated deposit cannot be considered completely uncompensated. The company provided material assistance to the bank, and, at the same time, was interested in the financial well-being of the latter itself.

As a result, the complaint was satisfied, and the decisions of the three lower courts were canceled due to the mistakes (determination No. 306-ES19-2986 (5) of August 20, 2020).