The Supreme Court spoke out against protective banking commissions using the example of VTB

The Supreme Court of the Russian Federation (SC) spoke out against protective banking commissions. The discussion was about VTB establishing a tariff for business transfers of large sums to individuals that is 38 thousand times higher than for transfers to organizations. Having confirmed the right of banks to change commissions, the Supreme Court emphasized that they must act “reasonably and in good faith,” otherwise the court will recognize this as an abuse. The commission should not prevent the client from “disposing of funds at his own discretion,” the Supreme Court emphasized. Lawyers welcome the position but doubt it will solve the problem. Bankers traditionally explain the amount of commissions by the desire to limit “dubious transactions.”

The Supreme Court considered a case challenging the excessive, in the opinion of businesses, fees for transferring money to the accounts of individuals. Investcom LLC, a VTB client, transferred 13.3 million rubles in December 2021. to an individual’s account at Promsvyazbank under an interest-bearing loan agreement. VTB withheld a commission of 1.33 million rubles for this. The company demanded to return it, but VTB refused, citing the fact that it has the right to change tariffs unilaterally, and at the time of the operation, the commission for transferring funds to an individual to another bank was 10%.

Investcom challenged the commission in court, considering it unjust enrichment. But the arbitration courts of three instances sided with the bank, pointing out that the company voluntarily became a client of VTB, had not previously objected to changes in tariffs and could generally choose another bank. In addition, the courts noted, the size of VTB’s commission “is comparable to the remuneration for a similar operation charged by other credit institutions in the region (Voronezh region.— “Kommersant”)”.

The company appealed these decisions to the Supreme Court, explaining that for transfers to customer accounts within VTB the commission is 6 rubles, and for transfers to accounts of legal entities and individual entrepreneurs in other banks – 35 rubles. That is, the tariff for transfers to individuals’ accounts in third-party credit organizations is 38 thousand times higher than the commission for a similar operation, “has no reasonable economic justification” and is an “abuse of law.” This “unfair contractual term,” the complaint said, “substantially upsets the balance of interests of the parties.” The case was transferred to the Economic Collegium of the Supreme Court, which overturned the court decisions.

The Supreme Court recognized the right of the bank to change commissions if it is provided for by law or in an agreement with a client conducting business activities. But at the same time, the bank is obliged to “act in good faith” and take into account “the rights and legitimate interests of the other party,” and “violation of this obligation may lead to denial of judicial protection of the said right,” including the recognition of a change in the size of the commission as void, the Supreme Court emphasized.

When changing fees, a credit institution “should not undermine customers’ expectations,” while maintaining for them “the opportunity to freely dispose of their property” through legal transactions. The client’s ability to contact other banks and their tariff conditions do not matter for this dispute, the panel clarified. Thus, the bank should not introduce a fee that “due to its significance begins to impede the bank’s clients from carrying out economically justified transactions on their accounts.” The VTB Commission has “obvious signs of a protective tariff,” the Supreme Court believes, but the plaintiff’s arguments about this “have not been assessed” in the decisions of lower courts. The case was sent for a new trial.

The Economic Board gave important clarifications on the “hot issue”, doing it “wisely enough, broadly, but at the same time very delicately, so as not to harm civil circulation,” says the managing partner of Bartolius Law Firm, Yuliy Tai, who represented Investcom in the Supreme Court. “The bank’s argumentation in the style of “yes, everyone has it” cannot be taken into account, since the massive scale of violation of rights does not at all normalize or legitimize the clearly onerous terms of the contract,” Mr. Tai emphasized.

“Since the Supreme Court sent the case for a new consideration, we consider comments premature,” the VTB press service told Kommersant. VTB tariffs for small and medium-sized businesses depend on the amount of transfer to an individual and range from zero (for amounts up to 150 thousand rubles per month) to 10% (over 5 million rubles). Sberbank has commissions for the same operations of 0.5–4%. “In our opinion, commissions for transfers from the accounts of legal entities and individual entrepreneurs to the accounts of individuals cannot be equated to transfers between legal entities, since the economic essence, technology and cost of operations are different. In practice, large transfers to individuals are usually accompanied by cash withdrawals,” Sberbank explained to Kommersant.

Vice-President of the Association of Russian Banks Alexey Voylukov says that often “barrier tariffs” arise not because of the bank’s desire to make money, but because of the requirements of 115-FZ: “The Central Bank of the Russian Federation strongly recommended introducing increased tariffs to avoid involving the bank in schemes used by unscrupulous clients laundering and cashing.”

Artem Makarov, a lawyer in the dispute resolution practice of the Kosenkov and Suvorov law firm, also believes that the purpose of such commissions is to limit the number of certain transactions, for example, transfers in favor of individuals or cash withdrawals: “On the one hand, the bank finds itself between two fires: you enter a commission and you receive claims, if you don’t enter them, you end up with an outflow of funds or “dangerous” transactions. On the other hand, changes in market conditions are a normal business risk for a bank.”

ProLegals partner Marina Morozova supports the position of the Supreme Court, noting that “the bank was initially placed in a preferential position over clients who cannot influence the size of tariffs.” According to BGP Litigation lawyer Dmitry Usoltsev, if the transfer of funds to an individual’s account aroused suspicion among the bank, it should have used the mechanisms of the “anti-money laundering” law, and “not used gray counteraction schemes.” For example, the bank could request additional documents, Marina Morozova clarifies.

The question is how much the BC position will help bank clients. Dmitry Usoltsev notes that the Supreme Court recognized increased commissions “for conducting dubious transactions” as insignificant back in 2021, but banks “still practice the veiled use of protective tariffs” for enrichment. Thus, the lawyer emphasizes, VTB did not actually recognize the Investcom operation as questionable. Artem Makarov points to an increase in the number of people faced with similar tariffs over the past year.

At the same time, senior lawyer at Tomashevskaya & Partners Mikhail Zhuzhalov believes that “the decision of the Supreme Court is an important step in the development of practice on issues related to the use of standard forms of agreements, not only on the part of banks.” The Supreme Court, in fact, recognized that the bank’s actions should not lead to the complete loss by its clients of any benefit from placing funds – this is “a fairly universal criterion that can be used not only when challenging protective tariffs,” explains Mr. Zhuzhalov.

But the position of the Supreme Court does not put an end to the issue; it “remains within the competence of the banks and the regulator,” Marina Morozova believes. According to Mikhail Zhuzhalov, a legislative ban on the use of conditions in standard contracts that allow unfair practices can help solve the problem.

Anna Zanina, Yulia Poslavskaya