Right to right – Picture of the day – Kommersant

The Supreme Court of the Russian Federation (SC) secured the right of a bankrupt citizen to hire lawyers and pay them if such transactions are not aimed at causing harm to creditors and have a positive effect on the bankruptcy estate. The decision was made as part of the bankruptcy of the former owner of the Antipinsky Oil Refinery, Dmitry Mazurov, who hired lawyers for 11 million rubles. to defend in a civil dispute. Earlier, the courts invalidated the payments, but the Supreme Court did not agree with them. Lawyers say that the position of the Supreme Court protects lawyers and their clients who are in a difficult financial situation, but at the same time creates grounds for abuse.

The Supreme Court considered the case on the admissibility of payment for legal services by a bankrupt citizen. The financial manager of Dmitry Mazurov (declared insolvent in June 2020) challenged the debtor’s payment for 11 million rubles. in favor of the association of lawyers “Law Bureau of EMPP of the City of Moscow” under a contract for the provision of legal services dated October 2018.

The Moscow Arbitration Court dismissed the manager’s claim, considering that the parties to the transaction had no intention of creating preferential repayment over other creditors, moreover, the cost of services was not overstated. The decision emphasized that the lawyers defended the debtor against the claim of Debian Access Ltd for $13.9 million (910 million rubles). The appeal and cassation, on the contrary, supported the requirements of the manager. According to the courts, the association, as a professional participant in the legal market, should have known about the financial difficulties of the debtor and the purpose of harming creditors (more see Kommersant dated March 2).

The ECPP and lawyer Vasily Tregubov complained to the Supreme Court: in their opinion, the decisions taken deprive a citizen of “the constitutional right to receive qualified legal assistance if he has signs of insolvency.” In addition, at the time of the conclusion of the contract with lawyers, the debtor was solvent. For these reasons, the case was transferred to the Economic Collegium of the Armed Forces, which took the side of the bankrupt citizen.

The Board recognized that each interested person “should have a real opportunity to attract a specialist in the field of law.” But the approach of the courts actually came down to the fact that “lawyers, under pain of invalidity, are not entitled to conclude an agreement with a citizen who is in a difficult financial situation,” the resolution says.

One cannot agree with such an approach, since it “in fact, blocks the very possibility of proper access to justice for such citizens,” the Supreme Court explained.

The Collegium noted that the involvement of lawyers and payment for their services, even “in the conditions of the property crisis of the customer”, do not in themselves indicate the invalidity of the transaction. Thus, the fact of the provision of services by lawyers is documented, part of the amount is directed to pay for foreign specialists who worked in Cyprus. The positive effect on the debtor’s property mass is also proven, and there is no reason to believe that the parties acted in bad faith and inflated the price of legal services, the Supreme Court pointed out. The affiliation of lawyers with Dmitry Mazurov is also “not established”, and the payments are not aimed at “causing harm to creditors”.

In this regard, the actions of the debtor were “standard from the point of view of any citizen who found himself in similar circumstances (associated with filing a claim for a significant amount in a foreign court), that is, they had a reasonable basis,” the board concluded, upholding the decision of the first instance, which recognized the payments legal.

The Supreme Court “recognized and fixed a person’s right to protection”, pointing out that “involving a specialist in the field of law during a crisis is the norm,” says David Kononov, head of the bankruptcy practice at the law firm Lemchik, Krupsky and Partners. For the first time at the level of the Supreme Court, it is fixed that the rules on transactions made in the course of ordinary business activities can be applied to the contracts of bankrupt citizens, points out the arbitration manager Sergey Domnin.

Lawyers now “have confidence in the future”, and the debtor will know that they “will not be afraid to cooperate with him,” adds Mr. Kononov.

It is also important to recognize that “the debtor’s property crisis is not a self-sufficient basis for the annulment of his agreements with lawyers,” notes Anton Krasnikov, partner at Sotheby’s law firm. He emphasizes that lawyers “are not obliged to assess the financial condition of the debtor when entering into an obligation relationship with him,” and this creates “a favorable legal regime for the debtor and his representatives.” True, it is not clear why the Supreme Court speaks “only about lawyers” and “does not extend its conclusions to ordinary lawyers who do not have such a status,” Mr. Kononov wonders.

Also, in addition to the obvious advantages of the decision, according to Anton Krasnikov, it “creates fertile ground for possible abuse in the form of the withdrawal of the debtor’s assets using legal services,” which “actually receive immunity from challenging on special bankruptcy grounds.” For example, a debtor can “artificially initiate disputes, engage lawyers for them and increase accounts payable through legal services,” argues Mr. Krasnikov.

However, Sergei Domnin notes, it will be possible to fight this, since the Supreme Court recognized “the fundamental admissibility of challenging agreements on the provision of legal assistance” concluded by debtors, and the same subject of proof as when challenging other types of transactions.

Ekaterina Volkova, Anna Zanina