A Few Words About the (In)Equality of the Parties of Credit Disputes
05.05.2012
The leading legal portal of Ukraine "Jurliga" in the "Analysis of law enforcement" rubric published an article by the partner of LF "Moskalenko & Partners" Anastasiya Moskalenko "A Few Words About Equality of the Parties of Credit Disputes" (dd. 04.05. 2012). Author of the article analyzes what is hidden behind the declared principles of equality of parties of credit relationships referring to specific examples from the practice of our firm.
For instance, the decision of the Appeal Court of Donetsk region dd. 13.04.2012, the case number 22ts/0590/3463/12 canceled the judgment of I instance to recover from the debtor and the guarantor jointly the debt under the credit agreement in the amount of 196029,26 UAH of which: 34 539,46 UAH - balance of the loan, 2088,38 UAH - interest on schedule, 20 366,75 UAH - interest on the actual use of capital, 139032.00 UAH - penalties. The court of appeal issued the decision and denied in full the claim to the guarantor, decided to collect from the debtor 34539,46 UAH of penalties and the same principal amount. The essence of this case was that the bank filed a claim on the borrower and the guarantor of approximately one and a half years after the expiration of the loan and the guarantee contract. In accordance with paragraph 4 of Art. 559 of the Civil Code of Ukraine at the time of the request a guarantee agreement has ceased to have effect by virtue of the law. The defendants’ representatives also asked to reduce the size of penalties in accordance with Part 3. Art. 551 of the Civil Code of Ukraine, taking into account the fact that the assessed amount is much greater than the sum of principal debt, and the violation of obligations of the borrower has been caused by a temporary loss of the ability to work due to injuries in both legs, and long and serious illness of his wife (the guarantor), which was confirmed by medical reports and corresponded to the actual circumstances of the case. An important nuance of this case is that the bank never sent a representative to the court of I instance, did not provide statements about the case in the absence of any objections, or arguments against the defendants. Defendants’ representatives expected that, under paragraph 3 of Part 1 of Art. 207 of the Civil Procedural Code of Ukraine the Court of I instance would decide to leave the claim without consideration, but instead he decided to satisfy the claim in full. Justice was restored only in the court of appeal.
The author draws attention to the fact that the illegal acts committed in connection with the administrative pressure, corruption and bias do not always entail immediate legal responsibility. But their consequences are illustrated with the saying: "Do not dig a pit for another - you will fall into it yourself".
This article provoked a lively discussion and debate among readers, which once again underscores its topicality.
For instance, the decision of the Appeal Court of Donetsk region dd. 13.04.2012, the case number 22ts/0590/3463/12 canceled the judgment of I instance to recover from the debtor and the guarantor jointly the debt under the credit agreement in the amount of 196029,26 UAH of which: 34 539,46 UAH - balance of the loan, 2088,38 UAH - interest on schedule, 20 366,75 UAH - interest on the actual use of capital, 139032.00 UAH - penalties. The court of appeal issued the decision and denied in full the claim to the guarantor, decided to collect from the debtor 34539,46 UAH of penalties and the same principal amount. The essence of this case was that the bank filed a claim on the borrower and the guarantor of approximately one and a half years after the expiration of the loan and the guarantee contract. In accordance with paragraph 4 of Art. 559 of the Civil Code of Ukraine at the time of the request a guarantee agreement has ceased to have effect by virtue of the law. The defendants’ representatives also asked to reduce the size of penalties in accordance with Part 3. Art. 551 of the Civil Code of Ukraine, taking into account the fact that the assessed amount is much greater than the sum of principal debt, and the violation of obligations of the borrower has been caused by a temporary loss of the ability to work due to injuries in both legs, and long and serious illness of his wife (the guarantor), which was confirmed by medical reports and corresponded to the actual circumstances of the case. An important nuance of this case is that the bank never sent a representative to the court of I instance, did not provide statements about the case in the absence of any objections, or arguments against the defendants. Defendants’ representatives expected that, under paragraph 3 of Part 1 of Art. 207 of the Civil Procedural Code of Ukraine the Court of I instance would decide to leave the claim without consideration, but instead he decided to satisfy the claim in full. Justice was restored only in the court of appeal.
The author draws attention to the fact that the illegal acts committed in connection with the administrative pressure, corruption and bias do not always entail immediate legal responsibility. But their consequences are illustrated with the saying: "Do not dig a pit for another - you will fall into it yourself".
This article provoked a lively discussion and debate among readers, which once again underscores its topicality.
