RUSSIAN SAC PRESIDIUM CLARIFIES THE BANKRUPTCY LAW

The Resolution of the Presidium of the Supreme Arbitration Court of 28 February 2012on Case No. 15935/11 (hereinafter "the Resolution") has been published.

The Resolution contains several conclusions that are significant for practical application of Federal Law No. 127-FZ "On Insolvency (Bankruptcy)" dated 26 October 2002 (hereinafter - "the Bankruptcy Law").

Basically, the Resolution states that an individual creditor is entitled to suggest that the receiver challenge a suspicious deal in arbitration. Yet it is emphasized that such a creditor must provide the receiver with evidence that the deal should be recognized as invalid.

In turn, when considering the creditor's application, the receiver must analyze the creditor's arguments and evidence and evaluate the practicability of restoring the debtor's and its creditor's infringed rights if the court satisfies the relevant claim.
Please note that the Bankruptcy Law does not allow receivers either to delay considering creditors' applications intentionally or to make any random or unreasoned decision.

The Resolution states that filing of an application by the receiver to challenge a suspicious deal in court does not prove his due performance. Due submission of a claim for an agreement to be recognized as invalid means filing of an application in the right format and with the proper contents, complying with other provisions of the Russian Arbitration Procedure Code and the Bankruptcy Law.

The Presidium of the Russian SAC states that, when an agreement is challenged, inaction on the part of the receiver may not be considered as proper on the basis of the challenge to an agreement resulting in unreasonable delay of the bankruptcy case. In this case, other reasons for inaction, including ones confirming that a challenge is economically unfeasible, should be specified.

Please note that the Resolution constitutes the basis for judicial acts that are in effect and have been approved by arbitration courts on cases involving similar actual circumstances to be re-examined (with respect to new circumstances in accordance with clause 5, Part 3, Article 311 of Russian Arbitration Procedure Code).