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Clarifications of the Russian Supreme Court concerning legislation on bankruptcy

22.04.2020

Returning a bankruptcy petition regarding a company covered by the moratorium

According to the clarifications of the Russian Supreme Court (the “Supreme Court”), if a debtor is included in the list of entities covered by the moratorium, this is a sufficient ground for a bankruptcy petition relating to such debtor to be returned based on article 9.1(1 and 2) of the Law on bankruptcy. The Supreme Court has emphasised that at the stage when the petition is accepted, the court does not investigate the circumstances and the period when the debt arose.

Issuing writs of execution and performing enforcement actions in respect of a company covered by the moratorium

The Supreme Court has decided that writs of execution may be issued, enforcement proceedings may be initiated based on such writs of execution and that in such enforcement proceedings actions may be carried out to limit the disposal of the debtor’s property as provided for by the legislation on enforcement proceedings. This is since article 9.1 of the Law on bankruptcy does not prohibit the examining during the moratorium of claims against companies covered by the moratorium and provides that attachments on a debtor's property and other limitations on the disposal of such property imposed during enforcement proceedings should be retained.

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The Law on bankruptcy provides for a suspension of enforcement proceedings regarding claims that had arisen before the moratorium. However, it is still an open issue whether the clarifications of the Supreme Court apply to enforcement proceedings relating to claims that arose after the moratorium was introduced. We believe that there are no grounds for it to be otherwise.

Restoration of the timeframes in bankruptcy cases

According to the clarification in the Overview of the Russian Supreme Court, the court should recognise that claims have been raised by creditors and/or that the timeframes for the performance of any actions have been compiled with in a bankruptcy case, taking into account the actual circumstances of each specific case.



comment.jpgIt should be borne in mind that the Law on bankruptcy provides that the timeframes for filing claims may be restored only in specific cases, for example, in cases relating to the bankruptcy of developers or individuals and with regard to claims to impose liability on the persons controlling the debtor. Taking into account the position of the Supreme Court that the fact alone of days off having been announced for the period of the pandemic does not have any effect on the procedural deadlines, we recommend that all the necessary actions in bankruptcy cases be carried out in a timely manner.

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