During a legal dispute, the parties often come to a compromise formalized in a settlement agreement. It sets out the conditions for the fulfillment of mutual obligations.
Despite the fact that it is concluded under conditions that suit the warring parties, in practice there are violations of the provisions of the settlement agreement, which lead to the defendant’s failure to comply with its provisions.
However, what to do when the terms of the settlement agreement are not fulfilled within the allotted time frame? How to go to court with a statement of non-fulfillment of a settlement agreement and restore your rights? We'll tell you in this article.
Settlement agreement
A settlement agreement is a final document approved by the court, in which the parties set out a compromise solution to the dispute between them. The plaintiff waives the claim, and the defendant agrees to fulfill certain obligations. An example could be an agreement to pay an agreed amount of money or take other actions, depending on the essence of the dispute. The agreement represents a mitigated outcome of the trial for the defendant.
Failure to enforce a settlement agreement in a civil case is the last thing a plaintiff expects. After all, this document is the result of negotiations and concessions to which both parties agree. The plaintiff receives satisfaction, albeit not complete, while the defendant gets rid of the unbearable result of the court satisfying the claim. Nevertheless, the problem exists.
Results
Final conclusions:
- a judicial penalty is a sum of money collected by the court in an amount at its own discretion in compliance with the principles provided for by civil law in favor of the creditor-collector from the debtor who has not fulfilled the court decision to fulfill the obligation in kind;
- applies only to obligations arising from civil legal relations;
- regulated by the Civil Code and sources of judicial practice (in particular, the resolution of the Supreme Court);
- carried out on the basis of the claimant's request sent to court;
- no one can be limited in the right to collect a judicial penalty except by law;
- It is allowed to terminate the obligation to pay a judicial penalty by a settlement agreement at the stage of execution of the court decision.
Sources:
- Civil Code of the Russian Federation;
- Resolution of the Plenum of the Supreme Court of the Russian Federation dated March 24, 2016 No. 7.
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Features of the settlement agreement
It is not a habitual transaction, and no penalty or other measures of enforcement are provided for. You can also file a claim for compensation. What to do if a participant in the process encounters non-fulfillment of a settlement agreement in civil proceedings?
A settlement agreement has the nature of a judicial act. Prosecution for refusal to comply applies to either the official or employee of the organization guilty of this. As a rule, the punishment applies either to bailiffs or to employees of an organization performing an intermediary function, for example, an accountant at an employer enterprise who is obliged to make deductions from the debtor’s income.
Legislative regulation
The Civil Procedure Code does not contain the concept of a settlement agreement in civil proceedings. It is given only a few words in the text of the law. In Russia, at the time of the adoption of the procedural code, there was almost no experience related to agreements of this kind. And the participants in the process were left with ample room for maneuver in resolving their disputes. There is only one requirement for their content - it does not violate the law and the rights and interests of the participants in the process and other persons.
Nothing is said about the consequences of failure to comply. The Arbitration Procedure Code, on the contrary, contains provisions that answer the question of how to solve this problem. But this applies to the arbitration process, how to solve the dilemma in a civil case?
The clarifications of the RF Armed Forces on the application of legislation on enforcement proceedings indicate that the interested person must submit an application for the issuance of a writ of execution and contact the bailiffs. The legal basis is the application of the law by analogy.
The court or bailiff may refuse to issue a writ of execution or open proceedings because they have no information about the non-fulfillment of the settlement agreement in enforcement proceedings. This argument is unfounded; the bailiff is obliged to find out within the framework of the proceedings whether the terms of the agreement were fulfilled.
What to do if, at the time of transfer of the case to the bailiffs, the debtor has repaid part of the debt?
In this case, in your application for execution submitted to the bailiffs, indicate the exact amount that was paid by the debtor voluntarily and attach supporting payment orders. The bailiff will take into account the voluntarily repaid part of the debt and will forcibly collect the rest from the debtor.
Topic: The writ of execution is lost, how can I get a duplicate?
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Is it possible for the plaintiff to refuse the agreement?
The plaintiff can declare his refusal to agree and ask the court to resume proceedings. The law does not provide for the court’s obligation to consider such a statement, and such actions are equivalent to filing a new claim on the same grounds against the same person. They entail refusal to open proceedings in the case.
After all, once the determination is made, the process is considered over. The plaintiff has the right to rely only on what is specified in the settlement agreement. Because of this, the consequences of failure to comply with a settlement agreement in civil proceedings are more tragic for the claimant than for the debtor.
When should I contact you?
An application for the issuance of a writ of execution is submitted to the court that made the decision on the settlement agreement. This can be any authority that approved the agreement.
The clauses of the agreement may contain deadlines during which the parties comply with its clauses. A deadline is established by reference either to a specific date or to an event (commitment of any actions) from which it begins to count.
Until they expire, neither party has the right to talk about non-compliance with the terms of the settlement agreement in civil proceedings.
The judge has the right to refuse to issue the sheet, citing the fact that the deadline has not yet expired.
If the agreement does not say anything about deadlines, the claimant has the right to ask to issue a writ of execution at any time, and the judge, most likely, will not refuse: there are no formal grounds for this.
It is impossible to delay the resolution of these issues; the period for execution of a judicial act is limited to 3 years. Exceptions to the rule are provided for by separate laws.
Publications
October 11, 2018
Settlement agreement. Dangerous conditions that will prevent it from being approved in court
Anastasia Cheredova, Head of Special Projects Group
Cheredova, Khasanova_Arbitration practice_Settlement agreement
| File added | 11.10.2018 |
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Resolving a dispute through a settlement agreement is a common alternative to lengthy and time-consuming litigation. In many disputes, it is easier for the parties to negotiate and reach agreement on all essential circumstances. However, agreeing on the terms of a settlement agreement between the parties is only the initial stage of this procedure, followed by approval of the settlement agreement in court.
Settlement agreement: form, parties, content
A settlement agreement is a special civil law transaction (clause 13 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 18, 2014 No. 50 “On reconciliation of the parties in the arbitration process”, hereinafter referred to as Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 50, Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 7, 2012 No. 247 /12 in case No. A55-18249/10, dated October 30, 2012 No. 8035/12 in case No. A50-5161/11). After the parties have entered into a settlement agreement, it must be approved by the court. Only after this the transaction entails legal consequences for the participants.
The terms of the settlement agreement are reproduced in the court's ruling, which endows the agreements of the parties with the property of binding inherent in judicial acts (Article 16 of the Arbitration Procedure Code of the Russian Federation) and ensures the possibility of their forced execution. Accordingly, in contrast to the usual procedure for changing the terms of civil transactions, changing the terms of a settlement agreement is possible only through the conclusion of a new settlement agreement and its submission to the court for approval[1].
Note: a settlement agreement can be concluded at any stage of the process, even at the stage of execution of a judicial act.
Parties to the settlement agreement.
As a rule, settlement agreements are concluded by plaintiffs and defendants. Sometimes a third party is also a party to the settlement agreement, making independent claims. However, third parties who do not make independent claims may also be parties to a settlement agreement - for example, if they are entrusted with the fulfillment of an obligation or they are persons authorized to accept fulfillment.
It is obvious that persons who are not participants in the arbitration process cannot participate in concluding a settlement agreement. In order for agreements with such persons to be taken into account in the content of the settlement agreement, they must initially be involved in the process, which is possible only if there are grounds provided for in the Arbitration Procedure Code of the Russian Federation. Thus, the procedural nature of the transaction affects the possibility of participation in it by persons whose rights and obligations in relation to the parties to the dispute are not affected, but who have a different interest in relation to the dispute (for example, as third parties intend to fulfill the disputed obligation or accept performance).
Contents of the settlement agreement.
The dual nature of the settlement agreement is already evident at the stage of elaboration of its content. On the one hand, the same rules of substantive law apply to a settlement agreement as to ordinary contracts: it may contain any conditions that do not contradict the law and do not violate the rights of third parties, which the parties determine at their own discretion.
On the other hand, the procedural nature of this transaction creates an additional criterion for the “admissibility” of its content - enforceability. Since violation of the agreements recorded in the settlement agreement entails forced execution, the conditions must be clear, clear and defined so that there are no further disputes[2].
Violation of this requirement can take a variety of forms. For example, a condition providing for a party’s obligation to transfer property will not be considered enforceable if its exact list is not specified in the settlement agreement itself, but is determined by reference to other documents[3]. In such cases, the bailiff will need to delve into documents other than the writ of execution reproducing the settlement agreement. The condition on the party’s obligation to supply goods without specifying the period, volume, exact name, that is, all the criteria by which the proper fulfillment of the obligation will be determined[4] does not meet the criterion of feasibility.
Conditions of the settlement agreement that may prevent its approval
At the moment, it is hardly possible to formulate an exhaustive list of “forbidden” conditions of settlement agreements. Courts' approaches to assessing similar conditions may differ even within the same region. One way or another, almost any unacceptable condition is a special case of violation of the basic requirements for a settlement agreement: non-contradiction with the law, absence of violations of the rights of third parties and enforceability. Despite the variety of forms of violations, the most typical cases can be identified when courts refuse to approve settlement agreements due to non-compliance with the requirements for their content. Let's consider which conditions are the most controversial, what is acceptable or unacceptable to include in a settlement agreement, and how you can reduce the risks of refusal to approve it.
Going beyond the dispute.
The parties have the right to include in the settlement agreement conditions that are related to the stated requirements, but were not the subject of court proceedings[5]. This is a very convenient rule, because often conflicts are complex in nature and can include numerous mutual claims from various types of transactions, both related and unrelated. In this case, the settlement of claims that were not initially submitted for resolution by the court will entail giving such agreements of the parties the binding force of a judicial act, ensured by the enforcement procedure.
In most cases, it will not be possible to include absolutely any conditions in the settlement agreement. For example, when considering claims of a non-property nature from contractual relations, the court refused to approve a settlement agreement with the condition that the plaintiff had no material claims against the defendant on the grounds that this provision was essentially not related to the subject of the stated claim[6].
Another example. The court refused to approve the settlement agreement, where the parties tried to resolve the rights and obligations from agreements that were not considered in the current case, but were the subject of other legal proceedings[7]. It is noteworthy that the court pointed out the fundamental admissibility of settlement in a settlement agreement of disputes under contracts that are not the subject of the proceedings. In this case, the approval of the settlement agreement was prevented by the presence of other arbitration cases.
Also, with a high degree of probability, conditions that entail the emergence of new legal relations between the parties that are not related to the subject of the dispute will serve as grounds for refusal to approve the settlement agreement. As part of the case for recovery of losses, a settlement agreement was submitted for approval with the condition that, in order to secure obligations under the settlement agreement, the debtor would provide the creditor with a piece of equipment as collateral. The court noted that the terms of the pledge do not relate to the subject of the claim, and, moreover, such a settlement agreement does not entail the final cessation of the dispute between the parties, since it does not exclude the emergence of new disputes in the future regarding the implementation of the conditions for the pledge of equipment[8].
Thus, when settling claims that are not part of the subject of the dispute, it is necessary to ensure that such claims are closely related to those already stated. At the same time, the settlement agreement cannot include terms on legal relations that are the subject of other legal disputes.
Lack of corporate
approval.
A settlement agreement as a civil transaction is subject to the general requirements of civil law - in particular, on major transactions and interested party transactions. Ignoring these requirements is a special case of simultaneous violation of two requirements for its content - violation of the rights of third parties (shareholders or members of the company) and the requirements of the law.
As a general rule, the court does not have the right to refuse to approve a settlement agreement under the pretext of violating the legislation on major transactions or interested party transactions, since such a transaction is considered voidable. In this case, the exception is cases when the court identifies obvious abuse in the content of the settlement agreement, in which, if approved, there may be talk of the nullity of the transaction as violating the requirements of Article 10 of the Civil Code of the Russian Federation and encroaching on the rights and legitimate interests of third parties in accordance with paragraph 2 articles 168 of the Civil Code of the Russian Federation. A similar approach is formulated in paragraph 10 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 16, 2014 No. 28 “On some issues related to challenging major transactions and interested party transactions.”
In addition, the court may refuse to approve a settlement agreement if a company participant involved in the case objects to its approval. In this case, objections are subject to consideration on the merits to identify circumstances indicating the presence of corporate grounds for invalidating the agreement[9].
The conclusion of a settlement agreement in violation of the rules of approval may entail a revision of the judicial act that approved the settlement agreement due to newly discovered circumstances at the request of a member of the company who did not take part in the consideration of the case where such an agreement was concluded[10]. To avoid these consequences, it is recommended to verify compliance with corporate approval procedures.
The presence of signs of a transaction under a condition.
The terms of the settlement agreement must be formulated in such a way that they can be transferred verbatim to the writ of execution. Therefore, the fulfillment of the parties’ obligations under the settlement agreement cannot be subject to a condition for which it is unknown whether it will occur or not[11]. Otherwise, the settlement agreement does not meet the criteria of enforceability and does not allow the proceedings to be terminated, since if the conditions are not met, the dispute between the parties will continue.
For example, the court refused to approve a settlement agreement in a case regarding the obligation to vacate the roof of a residential building, since the settlement agreement contained a clause stipulating that the procedure for fulfilling the agreements of the parties (vacating the roof or concluding a lease agreement) depends on what decision is made by the general meeting of owners of the residential building [12].
This limitation is a clear example of how the “procedural” nature of a settlement agreement limits the freedom of the parties to formulate its terms compared to a regular contract.
Conditions for debt forgiveness.
Some courts refuse to approve a settlement agreement if it can reveal elements of a gift agreement that are unacceptable between legal entities. For example, a court may refuse to approve a settlement agreement containing provisions for debt forgiveness[13].
This practice does not seem entirely correct, since paragraph 2 of Article 140 of the Arbitration Procedure Code of the Russian Federation provides that a settlement agreement may contain conditions for full or partial forgiveness of debt, and therefore such conditions are often found in settlement agreements. Moreover, paragraph 13 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 50 indicates that the fact of unequal value of mutual concessions is not a basis for refusing its approval.
To avoid the risk of refusal to approve the settlement agreement, its text is supplemented with a direct indication that the actions of the plaintiff aimed at forgiveness of the debt are not recognized as a donation according to the rules of Chapter 32 of the Civil Code of the Russian Federation and were committed in order to avoid additional costs for collecting the specified debt[14] or similar provisions[15].
Thus, despite the low probability of refusal to conclude a settlement agreement on this basis, it is recommended to supplement the text of the settlement agreement with provisions stating that the parties do not recognize such concessions as gifts, and also to focus on the benefits of these conditions for the creditor.
Forgiveness of part of the debt in a settlement agreement.
Of particular practical interest is the issue of the admissibility of including in the settlement agreement conditions stipulating that in the event of transfer of funds to the creditor in a certain amount by a certain date, the debtor’s obligation to pay the remaining part of the debt is terminated. Typically, the purpose of such a condition is mutually beneficial discounting of debt: the debtor recognizes the debt in full and is motivated to perform partial fulfillment under the condition of forgiveness of the remaining part, and the creditor is guaranteed to receive at least partial fulfillment, the claim of which in general may be problematic.
On the one hand, forgiveness of part of the debt is subject to a severable condition and depends on the debtor’s own actions, which is controversial from the point of view of the above practice. For example, in one case, approval of a settlement agreement containing a clause on the creditor’s refusal to collect a penalty depending on the payment of the debt within the agreed upon period was refused[16]. On the other hand, there is also a directly diametrical approach regarding the admissibility of such conditions[17].
Initially, the ban on suspensive or suspensive conditions is due precisely to possible problems during execution. However, in the case under consideration, the issue of enforcement either does not arise in principle (if the debtor paid part of the debt and the obligation ceased), or arises in relation to the entire amount of the debt (if part of the debt was not paid on time).
It seems that over time, judicial practice will come to uniformity, and such conditions for monetary obligations will finally establish themselves as a tool for resolving disputes on the terms of “mutual concessions.”
Conditions for refusal to go to court.
When agreeing on the terms of a settlement agreement, the parties often also try to minimize future risks. As a result, practice has become aware of formulations according to which the parties, in addition to resolving the subject of the dispute, also undertake obligations not to go to court with any other claims that may arise in the future.
The problem is that, firstly, the parties often choose too general a formulation (“any other requirements”), which is literally perceived as the defendant’s refusal to present claims, both related to the subject of the claim and unrelated. It is necessary to distinguish between the admissibility of refusing to present claims from the same legal relationship that is the subject of the dispute (for example, for additional requirements) and other legal relationships that already exist between the parties or may arise in the future.
Secondly, the courts do not recognize the possibility of waiving claims that have not yet arisen at the time of approval of the settlement agreement, and qualify this as an illegal waiver of the right to go to court, while the right to judicial protection is guaranteed by Article 11 of the Civil Code of the Russian Federation[18 ].
Contradiction of conditions with facts already established in the case.
In a situation where a settlement agreement is concluded at the stage of execution of a judicial act, its terms should not revise the circumstances established by this judicial act.
For example, in a case where the fact of termination of the contract served as a basis for the court of first instance to satisfy the claims, the condition of the settlement agreement that the parties consider the contract to be valid is not allowed. In the situation under consideration, the court indicated that since the dispute between the parties had already been resolved through a decision and the court established specific legal facts, the parties to the settlement agreement cannot ignore the conclusions of the court and the circumstances established by it, refute them, thereby questioning the legality of the judicial act [ 19].
The courts followed a similar logic in another dispute related to the elimination of violations of the plaintiffs’ property rights. The courts of three instances explained that if, during the consideration of the case by the court, the existence of violations of the plaintiffs’ property rights was established, their absence cannot be recorded by a settlement agreement[20].
Consequently, the parties to a settlement agreement cannot ignore the facts established in an already considered case, give a different qualification to the actions of the parties, and thereby replace the procedure for appealing a judicial act.
Reduction of the amount of the penalty in the settlement agreement.
It seems that the inadmissibility of conflicting with the conclusions of the court must be kept in mind in situations where a settlement agreement changes the amount of monetary obligations of the parties established by the court. For example, if the courts refused to reduce the penalty at the request of the debtor about its disproportionality (in accordance with Article 333 of the Civil Code of the Russian Federation), can the parties reduce its amount in a settlement agreement? The answer is obvious: they can, however, we recommend that you pay attention to the choice of basis for such a reduction.
Categories such as proportionality of the penalty to the consequences of breach of obligation, the presence of exceptional cases for reducing the penalty are matters of judicial assessment only. Therefore, the subsequent inclusion in the settlement agreement of conditions to reduce the penalty by the parties on the basis of Article 333 of the Civil Code of the Russian Federation can hardly be considered correct. It is possible that such conditions may be regarded as disagreement with the assessment already given by the court regarding the absence of disproportionality in the size of the penalty and exceptional grounds for its reduction.
When reducing the amount of the penalty established by the court in a settlement agreement, it is necessary to proceed from the fact that the parties have another right - to include a condition on forgiveness of part of the debt as an element of mutual concessions. In the absence of references to Article 333 of the Civil Code of the Russian Federation, if the parties change the amount of the penalty payable, the risks are minimized.
Conditions declaring a transaction void.
In cases of challenging transactions, the parties often try to fix the fact of invalidity of the transaction in a settlement agreement, determine rights and obligations in connection with this circumstance, or completely abandon the use of restitution. However, such conditions represent a special case of non-compliance of the terms of the settlement agreement with the law.
The recognition of a voidable transaction as invalid and the application of the consequences of its invalidity, as well as the application of the consequences of the invalidity of a void transaction, falls within the exclusive competence of the court. Despite the freedom of the parties to determine the terms of the settlement agreement, they do not have the right to declare the transaction or its individual provisions invalid in the settlement agreement[21]. Then, if the invalidity of the transaction cannot be agreed upon, is it possible to include in the settlement agreement a condition on the defendant’s acknowledgment of such a claim? It should be noted that practice in this matter is contradictory.
There are cases where the courts allow the defendant to admit a claim to invalidate a transaction. But in judicial acts there is no proper justification for the admissibility of such a condition.[22]
However, there is no fundamental difference between the agreement of the parties to recognize the transaction as invalid and the recognition of the claim by the defendant - the question of the consequences of invalidity arises in both cases. Despite the fact that refusal to approve a settlement agreement on this basis is quite rare, the reasoning of the courts seems quite convincing.
Thus, in one of the cases, the court indicated that establishing the fact of invalidity of a transaction is the prerogative of the court, and the application of the consequences of an invalid transaction is possible only by a court decision (Article 167 of the Civil Code of the Russian Federation). Therefore, the recognition by the defendant of the fact of invalidity of a transaction within the framework of a settlement agreement in order to entail consequences corresponding to the application of the consequences of invalidity, goes beyond the competence of the parties to resolve the dispute within the meaning of Article 139 of the Arbitration Procedure Code of the Russian Federation[23].
Such a restriction will not prevent the parties from actually settling the desired property consequences within this category of disputes if a provision is included in the settlement agreement regarding the plaintiff’s waiver of the claim[24]. In this case, the prohibition on determining the consequences of recognizing a transaction as invalid will not apply.
The settlement agreement was not approved by the court: legal consequences
If the parties entered into a settlement agreement, but the court refused to approve it or one of the parties did not support the request for its approval at the hearing, the question arises about the legal nature of such an agreement and the consequences that it gives rise to.
The generally accepted approach is that an unapproved settlement agreement does not create legal consequences in the case, since it expresses only the intention of the parties to conclude it, which is not implemented in the manner established by the Arbitration Procedure Code of the Russian Federation[25]. Consequently, the recognition or forgiveness of a debt recorded in the text of the settlement agreement will be regarded solely as an intention to recognize or forgive the debt, which cannot be taken into account by the court when adopting a judicial act.
If the settlement agreement signed by the parties has not been approved, the court continues to consider the case on the merits based on the evidence presented in the case file. However, the question arises: could such a settlement agreement have a different meaning for the purposes of considering the dispute? For example, without giving rise to rights and obligations for the parties, is it nevertheless considered written evidence in terms of establishing the factual circumstances that existed before the filing of the claim? In addition to regulating the rights and obligations, the parties in the settlement agreement could fix the date of conclusion or termination of the agreement, the date of payment of funds under the agreement, and so on.
In our opinion, there are no particular obstacles to considering such a settlement agreement as an analogue of an agreement based on factual circumstances. The latter type of agreement is not a civil transaction and does not create new rights and obligations for the parties, but only confirms the circumstances existing at the time of its conclusion. Of course, an exception to this should be situations where the settlement agreement was not approved due to the refusal of one of the parties to approve it at the court hearing.
Despite the proposed approach, it should be expected that judicial practice will support the most conservative option in this matter. Thus, at the moment, the settlement agreement signed by the parties, but not approved, cannot be used as the basis for the legal position of the party in the case.
Recommendations
So, when agreeing on the terms of a settlement agreement, the parties need to consider the following:
1. When including in a settlement agreement terms for the settlement of claims that are not included in the subject of the dispute, it is necessary to ensure that there is a close connection between such claims and those already stated;
2. The settlement agreement cannot contain conditions that determine the legal relations of the parties considered in other legal disputes;
3. If there are signs of a major transaction or related party transaction, it is recommended to check compliance with corporate approval procedures;
4. The settlement agreement must not contain suspensive or suspensive conditions;
5. In the case of debt forgiveness in whole or in part, it is recommended to note the benefits of these conditions for the creditor (preservation and development of partnerships, minimizing costs for debt collection, etc.);
6. When resolving issues regarding refusal to present claims in the future, it is necessary to take into account that such refusal is possible only in relation to claims related to the subject of the dispute;
7. A settlement agreement at the stage of execution of a judicial act cannot revise the factual circumstances established by the court when issuing a judicial act on the merits of the dispute;
8. There is no need to include conditions under which the parties, by agreement, declare the disputed transaction invalid, determine the consequences of restitution, or the defendant acknowledges the claims to invalidate the transaction.
[1] Clause 23 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 18, 2014 No. 50.
[2] Paragraph 3 of paragraph 13 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 50.
[3] Resolution of the Moscow District Arbitration Court dated September 11, 2014 in case No. A41-18453/13.
[4] Resolution of the Arbitration Court of the Volga-Vyatka District dated January 27, 2016 in case No. A82-9344/15.
[5] Clause 13 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 50.
[6] Resolution of the Arbitration Court of the Moscow District dated May 11, 2016 in case No. A40-171182/14.
[7] Resolution of the Arbitration Court of the North-Western District dated November 13, 2014 in case No. A56-22138/2014. By decision of the Supreme Court of the Russian Federation dated February 24, 2015 No. 307-ES15-337, the transfer of the case for review through cassation proceedings of this decision was refused.
[8] Resolution of the Arbitration Court of the North-Western District dated 06/07/2017 in case No. A66-2650/16.
[9] Ruling of the Supreme Court of the Russian Federation dated July 29, 2015 in case No. A40-149380/12.
[10] Paragraph 3 of subparagraph 3 of paragraph 10 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 16, 2014 No. 28 “On some issues related to challenging major transactions and interested party transactions.”
[11] For example, the resolution of the Arbitration Court of the Moscow District dated 02/15/2017 in case No. A40-52924/2016, the resolution of the Arbitration Court of the Moscow District dated 07/04/2016 in case No. A40-55525/2015.
[12] Resolution of the Tenth Arbitration Court of Appeal dated 02/09/2017 in case No. A41-25865/16.
[13] Resolution of the Tenth Arbitration Court of Appeal dated August 25, 2014 in case No. A41-7467/13.
[14] Resolution of the Ninth Arbitration Court of Appeal dated January 18, 2018 in case No. A40-77230/17.
[15] Resolution of the Tenth Arbitration Court of Appeal dated March 21, 2017 in case No. A41-51374/16.
[16] Resolution of the Ninth Arbitration Court of Appeal dated May 30, 2016 in case No. A40-237758/15.
[17] See, for example, the resolution of the Arbitration Court of the Moscow District dated December 7, 2017 in case No. A40-18517/17.
[18] For example, the resolution of the Arbitration Court of the Moscow District dated 02/10/2017 in case No. A40-26507/16-182-225, the resolution of the First Arbitration Court of Appeal dated 01/26/2018 in case No. A79-4191/2016.
[19] Resolution of the Arbitration Court of the Moscow District dated January 23, 2015 in case No. A40-42237/14, similar practice is the Resolution of the Second Arbitration Court of Appeal dated September 25, 2012 in case No. A28-7355/11.
[20] Resolution of the Arbitration Court of the Moscow District dated November 16, 2016 in case No. A41-3025/09.
[21] Ruling of the Supreme Arbitration Court of the Russian Federation dated 03/18/2016 in case No. A56-3647/2015, resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 09/10/2013 in case No. A65-12338/12, see also - resolution of the Arbitration Court of the Moscow District dated 08/14/2017 case No. A41-61707/13.
[22] Resolution of the Arbitration Court of the Ural District dated 05/24/2016 in case No. A07-23312/2014, resolution of the Arbitration Court of the Volga-Vyatka District dated 10/09/2017 in case No. A79-819/2016.
[23] Resolution of the Arbitration Court of the West Siberian District dated June 14, 2018 in case No. A46-14755/2017, resolution of the Arbitration Court of the Volga District dated April 17, 2018 in case No. A65-16096/2015.
[24] For example, the resolution of the Arbitration Court of the West Siberian District dated 06/01/2017 in case No. A67-3861/15.
[25] Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated September 8, 2009 in case No. A56-45577/07.
How to write an application for the issuance of a sheet
The application is written to the judge who made the decision on the settlement agreement. It is indicated who the author of the application is; if a representative acts, he must attach a copy of the power of attorney or other document confirming his authority (parents of the child - birth certificate, guardian or trustee - decision of the guardianship authority).
In the application, the operative part of the judicial act is rewritten (to collect or oblige to transfer, etc.), but here the text is drawn up taking into account the provisions of the settlement agreement. If a settlement agreement is not fulfilled in a civil proceeding, a sample application for the issuance of a sheet is offered in the court office or on its website on the Internet. Sometimes court staff provide a little help in drafting the text, but you shouldn’t count on it; it’s better to contact a lawyer. Then such scrupulousness?
Incorrect wording from the application will go into the executive document, and in the future problems will arise in the process of enforcement proceedings.
If the refusal comes from the bailiff
Bailiffs often violate the law by refusing to open enforcement proceedings. There are several reasons: workload, ignorance of the legislation, including that regulating the activities of the bailiff.
An employee’s refusal to open proceedings is appealed to the head of the department, and then to the department or in court. The second method takes longer - it requires preparing a full-fledged claim, but it is more effective. Judges often agree with the plaintiffs; in addition, bailiffs, having received summonses to court, try to cancel their own illegal decision before the start of the process. And this despite the fact that a citizen or representative of an organization has previously contacted them.
Consequences of non-fulfillment of the agreement
The negative consequences for the plaintiff or claimant have already been discussed. What are the consequences for the debtor of failure to comply with a settlement agreement in civil proceedings? Bailiffs have a number of powers that they are required to use to search and recover property:
- the right to seize accounts and property owned by an organization or entrepreneur;
- seize property for sale at auction;
- the claimant has the right to demand the accrual of a penalty for non-fulfillment;
- accrual of enforcement fees if the court decision was not voluntarily executed within the minimum period of time (7 days from the date of commencement of proceedings);
- a penalty is accrued for unfulfilled monetary obligations.
The presence of debts, disputes, refusal to fulfill obligations make it difficult to do business, and your reputation is seriously damaged.
It is no easier for an entrepreneur operating without opening accounts. For example, bailiffs, while searching for property, periodically visit the debtor’s home. All items not included in the list of property not subject to foreclosure are taken away and put up for auction.
No one prohibits a claimant from going to court to challenge the legality of the debtor’s transactions with property. They may be considered illegal due to the desire to hide property without actually transferring the right to it. This is practiced by the tax authorities. As a result, the debt will increase, but to other citizens and organizations.
Thus, the consequences of violating a settlement agreement in a civil process are no less painful than if the case had ended with a standard decision.
The concept and principles of judicial penalties for failure to comply with a court decision
The Law “On Amendments...” of 03/08/2015 No. 42-FZ was introduced into the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code) from 06/01/2015 to regulate the application of sanctions to a person who does not comply with a court decision in the form of payment of a sum of money ( often called a penalty or fine).
It is enshrined in Art. 308.3 Civil Code. From now on, the possibility of such compensation to the injured party is established by law, although in fact it could have been applied earlier, including on the basis of the resolution of the Plenum of the Supreme Arbitration Court dated April 4, 2014 No. 22 (this document became invalid as of March 24, 2016 due to the publication of the resolution of the Plenum Supreme Court of the Russian Federation dated March 24, 2016 No. 7).
Under judicial penalty on the basis of clause 1 of Art. 308.3 should be understood as a certain amount of money, which:
- recovered at the discretion of the court;
- established by the court based on the creditor’s request;
- recovered in favor of the applicant (creditor);
- meets the principles of civil law and legislation;
- does not relieve the debtor from fulfilling his obligations (established by a court decision);
- is not a basis for releasing the debtor from established liability.
Among the basic principles that the amount recovered as such a penalty must comply with is clause 1 of Art. 308.3 Civil Code indicates:
- principle of fairness (presence of guilty actions or inaction on the part of the creditor, absence of objective circumstances of non-fulfillment, etc.) - clause 2 of Art. 6 GK;
- the proportionality of the fine collected to the cost of the unfulfilled obligation stems, among other things, from Art. 14 GK;
- inadmissibility of the creditor receiving benefits as a consequence of the other party’s failure to comply with a judicial act - clause 4 of Art. 1 GK.
