The plaintiff is interested in interim measures. He can write a corresponding petition to the judge. Timely adoption of these measures will ensure that the defendant will not be able to get rid of his assets and transfer the property to relatives or friends. The plaintiff has a good chance of collecting the debt during enforcement proceedings, but only if the court decides positively.
Content
The interim measures introduced are valid until they are canceled by the court. They do not stop with the transfer of the case to another instance or the entry into force of a court decision. To terminate them early, an application from the defendant or plaintiff is required.
An application for the cancellation of measures to secure a claim is drawn up in free form; there is no uniform template for such applications. However, there are general requirements for the preparation of court documents. The application must indicate:
- The name of the court in which it is filed;
- The parties and other persons involved in the case, their contact information (the same as in the statement of claim and response to the claim);
- Case number;
- Description of the interim measures taken;
- Justification why they should be abolished;
- Request to the court to cancel the security of the claim;
- Date and signature of the applicant - defendant in the case.
The application must be made in a separate written document. A petition to cancel the security for a claim can also be included in the response to the statement of claim. But a separate document is more convenient for the court and all participants in the process.
The application is accompanied by documents on which the defendant’s request to cancel interim measures is based. You can also attach judicial practice on similar cases or links to it.
Replacement of collateral
This is one of the main points in legal proceedings related to the replacement of interim measures. An interested person who is a participant in the process has the right to apply to the court. For example, the defendant has the right to file a petition for this if the measures taken infringe upon his property rights. He suffers real losses. And damage can be avoided if the collateral is replaced.
On the other hand, the plaintiff may also file a motion to substitute injunctive relief. For example, he can do this if the measures taken for some reason do not bring him fulfillment of the will of the court in the future for certain reasons.
An application from the defendant or plaintiff to replace some interim measures with others is considered by the judge as soon as the document is received by him. In this case, it is necessary to take into account the norm of Article 141 of the Code of Civil Procedure. It states that applications submitted to the judge outside the meeting are considered without notification to the parties and interested parties participating in the case.
IMPORTANT: The judge makes a ruling on the replacement of interim measures. If any of the interested parties does not agree with it, it will be appealed.
Sometimes difficulties arise with the cancellation of interim measures. Here's a simple example:
The creditor sued the debtor. Simultaneously with the claim, a request for interim measures was submitted from him. The judge agreed, the apartment was seized, and the registration authorities were notified. The apartment was sold at auction. The creditor received his money. The buyer of the property applied to Rosreestr to register the apartment in his name. But he was refused because the encumbrance had not been removed, it was imposed by a court decision.
What to do? The creditor, having received his money, disappeared, there are no third parties in the case. The buyer files a claim and is denied because he does not have the right to initiate a motion to remove the security. The judge clearly follows Art. 144 Code of Civil Procedure. And a bona fide buyer has to look for a lender or not register the property in his name.
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Grounds for cancellation
The key to the application for cancellation of interim measures will be the justification of why the previously made decision to impose restrictions on the defendant needs to be canceled. There is no single advice for all occasions here. The defendant must independently determine the strongest arguments in favor of canceling the security.
For example, cancellation of security will be justified if the value of the claim has decreased significantly. This may happen if the plaintiff abandoned part of the claims, or the defendant partially fulfilled them.
Expert opinion
Lawyer Alexander Vasiliev comments
Cancellation of security will also be justified if the measures taken create unjustified inconvenience for the defendant or prevent him from fulfilling the legal demands of other persons. For example, on this basis, an individual entrepreneur can challenge the seizure of bank accounts from which he pays salaries to his employees.
The basis for cancellation may also be partial fulfillment of the claim, the conclusion of a settlement agreement by the parties and other grounds.
It is important in the application to clearly indicate what exactly should be canceled and why.
From judicial practice: the defendant asked the court to cancel the interim measures for the part of the building belonging to him, indicating that it was not the subject of the dispute. The court found that it does not follow from the application in respect of which property the security should be revoked, whether this property is the property of the applicant or a third party. On this basis the application was refused.
Sample application for cancellation of interim measures
In XXXX district court
Judge XXXX
Applicant (defendant in the case): full name, address, phone number, email address
Plaintiff: full name, address, telephone, email address
Case No. XXXX
Statement
On the cancellation of interim measures
In accordance with the ruling of the XXXX District Court, measures were taken to secure the claim, namely: the funds in the defendant’s accounts in the amount of 200,000 rubles were seized, as well as the KIA Rio car owned by the defendant, state registration number XXXX.
I believe that there are grounds for canceling these measures to secure the claim, due to the fact that:
- After clarifying the plaintiff’s claims, the total amount of claims against me is 60,000 rubles, which is significantly less than the total value of the property and the amount of funds in the bank accounts that were seized. The existing interim measures are clearly disproportionate to the value of the claim at the moment;
- I have a permanent job with an income of 100,000 rubles per month, and therefore I have the funds to enforce the court decision if the claim is satisfied.
- There are no enforcement proceedings or outstanding court decisions against me, and therefore there is no reason to believe that I will not execute the court decision after it is issued.
Based on the above and in accordance with Art. 144 part 1 of the Code of Civil Procedure of the Russian Federation:
ASK:
Cancel measures to secure the claim, namely:
- seizure of funds in the defendant’s accounts in the amount of 200,000 rubles, as well as
- arrest of a KIA Rio car belonging to the defendant, state registration number XXXX.
Applications:
- A copy of the 2-NDFL certificate confirming the defendant’s income;
- A copy of the ruling on the adoption of interim measures;
Date, signature.
Definition and essence
Interim measures guarantee the plaintiff that the defendant will retain ownership of movable and immovable property until a court decision is made. This could be a car, an apartment, a garage, etc.
The main thing is that the property remains in the possession of the defendant. And with its implementation, the creditor’s requirements can be satisfied if it is fair. And this moment is assessed by the court.
The law defines a list of interim measures. Let us turn to Article 91 of the APC:
- Seizure of a citizen’s property, as well as his funds held in an account with a banking institution.
- A prohibition imposed on the defendant in relation to performing legally significant actions with the subject of the dispute.
- Transferring property in relation to which a dispute has arisen, for example, to a friend for safekeeping.
- Suspension of an indisputable penalty based on a writ of execution or another contested document.
- Suspension of the moment of sale of property in the event that there is a claim for the release of property from arrest.
The Arbitration Court of the Russian Federation, as well as courts of general jurisdiction, can take either one listed measure or several. After a court decision is made, the judge is immediately obliged to notify the authorized bodies of the encumbrance on the property. For example, Rosreestr, which registers transactions with real estate.
Where and how to submit
The application is submitted to the same court that is hearing the case against the defendant. As a rule, this is the same court that previously took interim measures (Article 144 of the Code of Civil Procedure of the Russian Federation). But there may be exceptions - when transferring a case from one court to another.
An application for cancellation of measures to secure a claim may be filed at any time while the interim measures taken by the court remain in force.
You can submit your application in person, by mail (by registered mail with acknowledgment of receipt), or electronically. The ability to submit electronic documents to courts of general jurisdiction and magistrates is implemented through a personal account on the website of the State Automated System “Justice”.
In arbitration courts for commercial disputes, electronic documents are submitted through the “My Arbitrator” system.
Interim measures: when there is a chance to achieve them
According to Hogan Lovells Managing Partner Hogan Lovells Federal Rating. group Intellectual property (including disputes) group TMT (telecommunications, media and technology) group Corporate law/Mergers and acquisitions group International litigation group International arbitration group Transport law group Pharmaceuticals and healthcare group Financial/Banking law group Land law/Commercial real estate/Construction Natalya Gulyaeva, the use of interim measures is more a rarity than a rule. This is confirmed by research data from Pravo.ru. Thus, in 2021, the courts granted 38% of all applications for interim measures, in 2018 – 39%, and in 2021 – less than 37% (see “ASGM is least likely to obtain interim measures”).
Most citizens ask for a seizure, as well as a ban on the disposal of property (except for money). In second place in popularity is the prohibition of any registration actions, transactions and rights to the bodies of the Federal State Registration Service. Then comes the suspension of collection, execution of the decision, liquidation, prohibition of the actions of the bankruptcy trustee. The ban on using money and a bank account closes the top five popular demands.
When measures are most often imposed
As the lawyer of the St. Petersburg office of Pepelyaev Group says, Pepelyaev Group Federal rating. group Foreign trade activities/Customs law and currency regulation group Tax consulting and disputes (Tax consulting) group Tax consulting and disputes (Tax disputes) group Labor and migration law (including disputes) group Digital economy group Antimonopoly law (including disputes) group Land law/Commercial real estate/Construction group Intellectual property (including disputes) group Compliance group Natural resources/Energy group Pharmaceuticals and healthcare group Environmental law group Bankruptcy (including disputes) group Corporate law/Mergers and acquisitions group Family and inheritance law TMT group (telecommunications, media and technology ) group Financial/Banking Law group Arbitration proceedings (major disputes - high market) group Dispute resolution in courts of general jurisdiction Elena Rybalchenko, courts more often apply interim measures for the disposal of real estate. According to her, most often the courts accept security in cases of challenging a non-normative legal act, in disputes over property rights, as well as in cases of protection of exclusive rights. Partner Bryan Cave Leighton Paisner (Russia) LLP Bryan Cave Leighton Paisner (Russia) LLP Federal rating. foreign trade group/Customs law and currency regulation group PPP/Infrastructure projects group Land law/Commercial real estate/Construction group Intellectual property (including disputes) group Compliance group Corporate law/Mergers and acquisitions group International arbitration group Tax consulting and disputes (Tax disputes) group Natural resources/Energy group TMT (telecommunications, media and technology) group Transport law group Pharmaceuticals and healthcare group Financial/Banking law group Digital economy group Antitrust law (including disputes) group Arbitration proceedings (major disputes - high market) group International litigation group Tax consulting and disputes (Tax consulting) group Labor and migration law (including disputes) group Family and inheritance law group Criminal law group Private wealth management group Bankruptcy (including disputes) 3rd place By revenue 3rd place By number of lawyers 5th place By revenue per lawyer (more than 30 lawyers) Company profile Ivan Veselov believes that interim measures are most often taken in corporate disputes, disputes about challenging transactions, and vindication of property. And according to partner Eversheds Sutherland Eversheds Sutherland Federal rating. Environmental Law group Intellectual Property group (including disputes) Labor and Migration Law group (including disputes) Antitrust Law group (including disputes) Corporate Law/Mergers and Acquisitions group Natural Resources/Energy group TMT group (telecommunications, media and technology) Arbitration group (major disputes - high market) group Bankruptcy (including disputes) group Land Law/Commercial Real Estate/Construction group Tax consulting and disputes (Tax consulting) Oksana Peters company profile, these are typical disputes about the collection of receivables and administrative disputes about challenging acts of government agencies.
The imposition of interim measures largely depends on the requirements themselves. “Courts are most willing to satisfy applications whose requirements do not affect the material aspect. For example, about postponing a meeting of creditors on bankruptcy disputes. This occurs when the deadline for holding a meeting has arrived, but consideration of the application of a creditor entitled to participate in the first meeting of creditors of the bankrupt has been scheduled for a later date. Another example would be a situation where the applicant demands to maintain the status quo of the subject of the contested transaction. In such disputes, security does not significantly change the position of the parties and can maintain a balance of their interests,” says lawyer PB Olevinsky, Buyukyan and Partners Olevinsky, Buyukyan and Partners Federal Rating. Bankruptcy group (including disputes) 22nd place By revenue per lawyer (less than 30 lawyers) 30th place By number of lawyers 39th place By revenue Company profile Adelina Khudoyarova. Veselov believes that the most common adoption of interim measures is in the form of a ban on performing certain actions. For example, in the form of a ban from the Federal Tax Service to make changes to the Unified State Register of Legal Entities.
When measures are most often denied
Most often, courts refuse to seize money. This is due to the fact that the funds available to the debtor in the accounts at the time of filing the petition are not always the only source of satisfaction of claims. Rybalchenko reminds that the seizure of money can significantly complicate the life of both a legal entity and an individual: “If the demands are recognized as unfounded, then it turns out that the defendant suffered in vain. It is unlikely that he will be compensated for the losses caused by arrests and other restrictive measures.”
Often, under the guise of interim measures to protect the interests of persons participating in a legal dispute, a completely different motive may be hidden. For example, the desire to interfere with other market players.
Adelina Khudoyarova, lawyer PB Olevinsky, Buyukyan and partners Olevinsky, Buyukyan and partners Federal rating. Bankruptcy group (including disputes) 22nd place By revenue per lawyer (less than 30 lawyers) 30th place By number of lawyers 39th place By revenue Company profile
In most cases, courts do not indicate a clear reason for refusing to take interim measures, but simply limit themselves to the general wording of the law. According to Oleg Proshlyakov, lawyer at AB Pavlova and Partners Pavlova and Partners Federal Rating. group Family and inheritance law group Insurance law group Private wealth management group Bankruptcy (including disputes) group Arbitration proceedings (major disputes - high market) Company profile, such excessive caution is caused by the reluctance to further worsen the position of the weak party in the process.
Court refusals to impose interim measures are sometimes based on the applicants’ incorrect application of the law. “For example, in one case regarding the protection of exclusive rights to a painting, the applicant showed excessive appetite. He asked the court to prohibit the defendant from holding an exhibition in which the disputed item was exhibited. The court rejected such a request. The subject of the dispute was only one specific painting, so it is logical that there is no reason or point in banning an entire exhibition,” Rybalchenko noted.
How to obtain interim measures?
In order to achieve the imposition of interim measures in court, it is necessary to prove the connection of a specific interim measure with the subject of the stated requirements, its proportionality, as well as significant difficulties in executing a judicial act in case of refusal. For example, the debtor has no other property to satisfy the requirements (No. A50-20086/2013), withdrawal of the debtor’s assets (No. A56-40284/2015), the beginning of a liquidation procedure or concealment of property. “A request for interim measures must be supported by real facts of the defendant’s past dishonest behavior, unstable financial condition in the present and a reasonable possibility of causing significant damage in the future,” Khudoyarova believes.
Courts always evaluate the consequences of applying interim measures. For example, the seizure of property, which cannot prohibit its use, will obviously entail less serious consequences than the blocking of a company's accounts, paralyzing its activities until the legal dispute is resolved.
Roman Zaitsev from Dentons Dentons Federal rating. group Antitrust law (including disputes) group Land law/Commercial real estate/Construction group Intellectual property (including disputes) group Compliance group Corporate law/Mergers and acquisitions group International litigation group Tax consulting and disputes (Tax consulting) group Tax consulting and disputes ( Tax disputes) group Capital markets group Labor and migration law (including disputes) group Pharmaceuticals and healthcare group Financial/Banking law group Digital economy group Arbitration proceedings (medium and small disputes - mid market) group Foreign trade activities/Customs law and currency regulation PPP group/ Infrastructure projects group International arbitration group Natural resources/Energy group Dispute resolution in courts of general jurisdiction group TMT (telecommunications, media and technology) group Transport law group Private wealth management group Bankruptcy (including disputes) 2nd place Based on the number of lawyers, it recommends applying to regional courts, not neglect repeated applications when receiving a priority refusal and make maximum use of the institution of counter-collateral. But collateral can be economically burdensome for the firm and subject to legal uncertainty. In fact, counter-collateral is only possible in the form of depositing money with the court or providing a bank guarantee.
Interim measures must be proportionate to the stated requirement (Part 2 of Article 91 of the APC). When considering an application for interim measures, the court assesses the extent to which a specific interim measure is related to the subject of the claim, is proportionate to it, and how it will ensure the actual implementation of the goals of interim measures (clause 10 of the Resolution of the Plenum of the Supreme Arbitration Court of October 12, 2006 No. 55).
“But in real life, assessing the proportionality of the interim measure and the subject of the dispute may not always be reliable,” says Khudoyarova. For example, difficulties arise when assessing an applicant's intangible claims; when security is possible at the expense of the company’s only asset, the value of which clearly exceeds the value of the collateral. “In such cases, the court must take into account the interests of the defendant and determine the likely outcome of events,” says Khudoyarova.
- Alina Mikhailova
- Arbitration process
- Civil process
Alternative collateral
The mere presence of sufficient funds in accounts will not be grounds for canceling interim measures (Information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated July 7, 2004 No. 78, paragraph 13). There is money today, but tomorrow it may not be there. Therefore, interim measures will not be canceled on this basis alone.
Expert opinion
Lawyer Alexander Vasiliev comments
If funds are specifically set aside for the purpose of paying the plaintiff's claims, the situation changes. Along with the cancellation of interim measures, the defendant may ask the court to allow him to deposit a certain amount into the court deposit (Article 143 of the Code of Civil Procedure of the Russian Federation). This option applies when there are no serious grounds for canceling the security, and in response to a simple application the court is likely to refuse. Cash on deposit will allow you to quickly release the property you need from seizure.
The money will remain on deposit until the case is over and the decision comes into force.
Defendant's Interest
The defendant is interested in having interim measures removed from his property. Article 144 of the Code of Civil Procedure establishes that security may be revoked. The initiators are the judge and interested parties. The defendant files an application. For example, in a lawsuit to collect funds, the defendant may ask the judge to lift the seizure of an account at a credit institution. But at the same time, deposit the amount of money about which the dispute broke out into the court’s deposit.
IMPORTANT: Only in civil proceedings can a judge initiate the cancellation of security! This is a fundamental point. In Arbitration, the judge is deprived of this opportunity.
As a reason that the defendant may refer to when filing a separate application, one can name the obstacle that the interim measure creates in the execution of the decision of the judicial authority. It often happens that, when making a decision on a case, a judge removes the security from the claim by ruling, but it remains until the act comes into force.
Removal of security from a claim is a reason to convene a new court hearing. All persons who previously took part in it are notified. Failure to appear cannot serve as an obstacle or reason for postponing the court hearing.
If the plaintiff's request was denied, the defendant who suffered from the interim measures has the right to demand damages from the other party. To do this, the defendant must write a statement of claim. It is being considered separately from the claim originally filed.
If the plaintiff does not agree with the cancellation of the security, he has the right to file a private complaint against the decision of the judicial authority. In this case, the execution of the court ruling is suspended.
Plaintiff's objections
The plaintiff has the right to object to the cancellation of measures to secure the claim. As a rule, objections come down to a repetition of the arguments with the help of which interim measures were obtained. The plaintiff has the right to formulate his objections in writing in the form of a response to the application for the cancellation of interim measures. In addition, he can express his position directly during the court hearing.
Expert opinion
Lawyer Alexander Vasiliev comments
The defendant’s task is to prove to the court that there is in fact no risk of non-enforcement of the court decision. In such situations, the subjective discretion of the judge hearing the case plays a big role - how credible the defendant is. If the court remains concerned that if the interim measures are canceled it will get rid of property or money in the accounts, the security will not be cancelled.
Measures to secure a claim
When drawing up an application to secure a claim, the plaintiff must name a specific type of measure, such as:
- seizure of the defendant's property. When the court applies such a measure, it also provides for the encumbrance of property held by third parties
- prohibition on performing certain actions (registration of transfer of ownership, sale, etc.)
- prohibition of third parties from performing actions related to the disputed property, including transferring property to the defendant or fulfilling other obligations regarding the property of the defendant
- suspension of the sale of property when appealing against the seizure of property or its exclusion from the inventory act
- suspension of collection according to the writ of execution, appealed by the debtor.
The size of the declared measures must be commensurate with the size of the claims. Claims for recognition and award are subject to security. Thus, upon an application for a determination of copyright, the court has the right to prohibit the publication of a disputed literary work until the dispute is considered on the merits.
Initial and counterclaims may be subject to security. If necessary, the court may take several measures simultaneously. In addition, the court may determine other measures based on their purpose (ensuring the safety of the debtor’s property), not specified in the Code of Civil Procedure of the Russian Federation.
The security for the claim can be canceled by the judge himself who made the decision. To do this, it is necessary for the participant in the case to submit an application. In addition, an interested person may file a private complaint against a court ruling to secure a claim.
Plaintiff's application for cancellation
In some cases, the plaintiff may also request the cancellation of interim measures. For example, the parties may agree, and the defendant transfers to the plaintiff his property, which was seized. In this situation, the seizure of the property will prevent the plaintiff from transferring what he received to himself.
The plaintiff's request to cancel the interim measures requested by him in most cases is granted by the court. No special arguments or lengthy substantiation of the position are required.
