INFORMATION LETTER OF PRESIDIUM OF THE SUPREME ARBITRATION COURT OF THE RUSSIAN FEDERATION

of October 30, 2007 No. 120

The presidium of the Supreme Arbitration Court of the Russian Federation discussed the Overview of practice of application by Arbitration Courts of provisions of Chapter 24 of the Civil code of the Russian Federation and according to article 16 of the Federal constitutional Law "About Arbitration Courts in the Russian Federation" informs Arbitration Courts on the developed recommendations.

Appendix: the overview on 30 sheets.

Overview of practice of application by Arbitration Courts of provisions of Chapter 24 of the Civil code of the Russian Federation

1. Invalidity of the requirement transferred based on the agreement on concession of the right (requirement) does not attract invalidity of this agreement. Invalidity of this requirement is the basis for attraction by the cessionary to responsibility of the creditor who yielded the requirement according to Article 390 of the Civil code of the Russian Federation.

The individual entrepreneur appealed to Arbitration Court with the claim to limited liability company for collection of the amount of principal debt and interest for using others money in connection with non-execution by the defendant of the obligation in payment of the real estate received according to the purchase and sale agreement. In reasons for the declared requirements the claimant specified that the right to claim of payment passed to it in pursuance of the agreement on concession of the right (requirement) concluded with the private company which was the seller under the specified agreement.

Objecting to satisfaction of the claim, the defendant referred to invalidity of the transaction of concession of the right (requirement), believing that invalidity of the obligation which contents the yielded right (requirement) enters, involves as well invalidity of the transaction of concession.

According to case papers the purchase and sale agreement of the real estate which price constituted more than five percent of book value of assets of private company, was concluded by this society after introduction of the procedure of observation concerning it. At the same time the transaction was made by society for lack of the consent of the interim manager, that is with violation of the instruction established by the paragraph the second Item 2 of article 64 of the Federal law "About Insolvency (Bankruptcy)". Decree violation was the basis for recognition by Arbitration Court on another matter of the purchase and sale agreement of the real estate invalid based on Article 168 of the Civil code of the Russian Federation (further the Civil Code of the Russian Federation, the Code) and application of effects of its invalidity.

Court, having agreed with defendant's cases, refused satisfaction of the claim, having specified the following in motivation part of the decision. The transaction of concession of the right (requirement) disputed by the defendant is the transaction which is directly directed to transfer of the right (requirement) from the assignor to the cessionary. This transaction was committed in agreement performance of sale and purchase of property right according to which the private company undertook to transfer for a fee to the individual entrepreneur the specified right (requirement). At the same time invalidity of the yielded requirement attracts invalidity of both the transaction on transfer of this requirement, and the agreement under which in obligation fulfillment this concession is made.

Court of cassation instance, upholding the decision of Arbitration Court of the first instance, changed motivation part of court resolution, having specified the following.

Transaction of concession of the right (requirement) represents execution by the assignor of the right (requirement) of the obligation for transfer to the cessionary of the right (requirement) which arose from the agreement on concession.

According to article 384 Civil Code of the Russian Federation if other is not provided by the law or the agreement, the right of the initial creditor passes to the new creditor in the same amount and on the same conditions which existed by the time of transition of the right. As the private company owing to invalidity of the purchase and sale agreement of the real estate had no right to claim against the defendant of implementation of payment for the transferred real estate object following from this agreement, this right could not pass to the claimant.

Therefore, the obligation of the seller on transfer of the right (requirement) which arose from the purchase and sale agreement of property right is not performed by private company and he bears responsibility to the cessionary based on article 390 Civil Code of the Russian Federation. In sense of this article of the Code transfer of the invalid requirement is considered as violation by the assignor of the obligations to the cessionary following from the agreement on concession of the right (requirement). At the same time as the invalid requirement it is understood as the right is right (requirement) which would arise from the obligation on condition of validity of the transaction, and nonexistent (for example, stopped by proper execution).

Follows from provisions of article 390 Civil Code of the Russian Federation that the validity of the agreement on concession of the right (requirement) is not put into dependence on validity of the requirement which is transferred to the new creditor. Non-execution of the obligation on transfer of the subject of the agreement about concession of the right (requirement) attracts responsibility of the transferring party, but not invalidity of the obligation based on which the right is transferred. Therefore conclusion of court about invalidity of the agreement on concession of the right (requirement) is wrong.

2. The concession bank of the rights of the creditor according to the credit agreement to the legal entity which is not credit institution does not contradict the legislation.

The limited liability company appealed to Arbitration Court with the claim to joint-stock company for debt collection according to the credit agreement, percent behind use of the credit and application of measures of responsibility for untimely repayment of the loan and interest payment. In reasons for requirements the claimant referred to concession to it bank of the rights of the creditor according to the credit agreement. Determination of court in case in quality of the third party recruits bank.

According to case papers between the defendant and bank there were credit relations. In view of non-execution by the borrower of the agreement obligations the bank yielded the requirements belonging to it to the defendant to the limited liability company which is not credit institution.

Court, having recognized the agreement on concession of the right (requirement) insignificant, refused the claim, proceeding from the following.

Owing to provisions of articles 1 and 5 of the Federal law "About Banks and Banking Activity" the exclusive right to perform in total transactions on attraction of money of physical persons and legal entities in deposits and to placement of the specified means on its own behalf on the terms of recoverability, the paid nature, urgency belongs only to bank. Exclusiveness of the specified right does not allow transfer of the rights by bank according to the credit agreement to other person which is not bank and not having the license of the Central bank of the Russian Federation for implementation of the specified banking activities.

By court it was also specified that the concession bank of the rights of the creditor according to the credit agreement breaks both balance of interests of participants of the credit obligation, and the right of investors of credit institutes. Besides, according to court, banks or other credit institutions can only be creditors according to credit agreements according to Item 1 of article 819 Civil Code of the Russian Federation.

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