THE SUPREME COURT IS PREPARING A DRAFT RESOLUTION OF THE PLENUM ON THE PLEDGE

The Supreme Court clarified when foreclosure on the subject of collateral is not allowed. In particular, one of the clarifications introduces the criterion of insignificance of the violation of the secured obligation for the purpose of preventing foreclosure on the collateral.

As follows from the text of the draft, minor violations will be understood as situations in which the delay is less than 3 months, and the amount of unfulfilled claims will not exceed 5% of the value of the collateral.

At the same time, this criterion will be dispositive, that is, the parties will be able to set other thresholds in the contract.

The Supreme Court also proposes to allow compulsory foreclosure on the subject of collateral in case of systematic non-payment /incomplete payment by the debtor of periodic payments.

Systematicity will occur in case of violation of the payment deadlines more than three times during the twelve months preceding the date of appeal to the court or the date of notification of foreclosure.

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