THE SUPREME COURT OF RUSSIA CLARIFIED THE LIMITS OF MORATORIUM ON INITIATION OF BANKRUPTCY PROCEEDINGS

The Supreme Court of Russia considered the dispute on declaring the company insolvent. One of the debtor's creditors initiated the case, and the court of the first instance accepted the application and initiated bankruptcy proceedings. However, in subsequent challenges of the claim in the appeal and district courts, the position was found to be incorrect, and the submitted application was returned to the creditor.

The reason was the action of the moratorium on bankruptcy in relation to the debtor.

The Supreme Court found no reason for the application of the moratorium, having indicated that it was impossible in the case under consideration.

The debtor company, in support of its position, referred to the presence of retail trade among the additional types of its activities, which was included in the list of the moratorium. At the same time, the main activity was the production of furniture for offices and enterprises.

The highest court recalled that when considering the issue of extending the moratorium on bankruptcy, the main Classifier of Types of Economic Activity is taken into account, which in the case under consideration was included in the government list.

The company countered by the fact that the main activity was actually trade, to which the Supreme Court reasonably noted that in this case, the changes should have been made to the Russian National Classifier of Types of Economic Activity as well.

The result of the consideration of the dispute was cancellation of two rulings and the initiation of a bankruptcy dispute (decision No. 305-ES20-22243 of April 15, 2021).