THE SUPREME COURT TIGHTENS THE RULES FOR ADVANCING BANKRUPT TRADES

If the participant of the failed auction refuses to conclude the contract, the deposit will not be returned. This conclusion was reached by the Supreme Court of the Russian Federation when considering a cassation appeal in the framework of a dispute on recovery in favor of the sole bidder held in the framework of the bankruptcy case of the deposit (case No. A56-16535/20).

The plaintiff transferred the deposit to participate in the auction for the sale of the property of the insolvent debtor.

The auction was declared invalid due to the admission of one participant to the auction, after which the plaintiff refused to conclude the contract and demanded to return the deposit to him.

The court of first instance refused to satisfy the claim, referring to the fact that the plaintiff, who offered a price for the property being sold and did not withdraw the bid for participation in the auction, evaded the conclusion of the contract, and therefore the deposit is not refundable.

The district court, upon a new review, concluded that in the event of the refusal of the sole participant of the auction recognized as failed to conclude the contract, the bankruptcy trustee or the organizer of the auction is obliged to return the previously made deposit to such a participant. The terms of the standard deposit agreement posted on the electronic trading platform provide for the obligation of the organizer of the auction to return the deposit.

The Supreme Court of the Russian Federation did not share this approach and noted that in this case, the only bidder, as well as their winner, the deposit is not refundable. The amount of the deposit made by him is credited to the fulfillment of obligations under the concluded contract.