Article 10: abuse of law. Decision of the plenum abuse of law. Inadmissibility of abuse of law. Abuse of law in the process.
Persons involved in civil matters are obligated to exercise their rights and fulfill their duties in good faith. Illegal or dishonest behavior is prohibited in order to derive any advantage. Usually, good faith participants in civil matters are assumed until otherwise established.
Provided that the facts of unfair behavior of one of the parties are proved, based on the circumstances of the case and taking into account the nature and results of such behavior, the court may refuse to protect the rights, as well as protect the interests of the bona fide party or third parties (Clause 2 of Article 10 of the Civil Code of the Russian Federation).
Article 10 of the Civil Code of the Russian Federation is far from the only norm where the legislator tries to find a balance of interests of the parties. For example, the new edition of Art. 168 of the Civil Code of the Russian Federation provides that a transaction concluded in violation of the requirements of the law is disputable. In turn, paragraph 2 of Art. 168 of the Civil Code of the Russian Federation establishes the provisions that a transaction that violates the law, infringes on the public interests and interests of third parties protected by law is void,
According to the clarifications contained in paragraph 7 of the Resolution of the Plenum of the Armed Forces of the Russian Federation dated June 23, 2015 No. 25, if the transaction violates the ban contained in paragraph 1 of Art. 10 of the Civil Code of the Russian Federation, depending on the circumstances of the case, such a transaction may be declared invalid by the court (clauses 1 or 2 of Article 168 of the Civil Code of the Russian Federation).
Most often, dishonest behavior finds expression in the abuse of the right, which is the person’s behavior, as a rule, intentional, to exercise his right in the presence of violation of the boundaries of the exercise of civil rights or contributing to the onset of harm.
Mostly, courts recognize transactions as invalid due to abuse of the right in bankruptcy cases. However, contesting transactions on this basis is also possible for other categories of cases, including in connection with transactions for the alienation of property.
The plot of the case:
The Arbitration Court decided to make a pledge record in the register of owners of registered equity securities of KRAMAKS CJSC in relation to 40 ordinary registered uncertified shares owned by Y. Yvvilekhto. By the definition of the appeal, the court decision was changed: with Järvilehto J.Yew. collected funds.
During the consideration of judicial disputes, Järvilehto J.Yew. gave the shares to Esedullaev S.K. and Dzhambulatov U.V., which were subsequently transferred under a gift agreement to Chernyshev S.P., and then Pavlichenko A.G.
KRAMAKS CJSC, believing that the actions of the listed persons there are signs of abuse of rights, transactions were made in violation of the principle of good faith, in order to harm the interests of CJSC, appealed to the court with a request to declare the transactions invalid.
The plaintiff pointed out that, as a general rule, gratuitous transactions are not characteristic of civil turnover, which is built on the basis of the obligation of subjects of civil relations to provide each other with an equivalent exchange of property. Moreover, donation is not prohibited by civil law, but is unusual for civil circulation. The court satisfied the stated requirements.
Judicial act: Decision of the Moscow Region Arbitration Court of July 16, 2019 in case No. А41-65826 / 2018
Court findings:
1. Concluding gift agreements, Yarvilekhto Y. Yu. during the trial, he acted in bad faith, abusing the right, had the intention of harming KRAMAKS CJSC not to allow the execution of the court decision on making a record of the pledge of shares and to conceal the disputed shares from foreclosure by appeal.
2. Concluding contracts, the defendants should have shown the required care and prudence and could not have not had the information in the file of court cases that there were legal claims of KRAMAKS CJSC on the date of conclusion of the disputed share agreements.
3. The court concluded that the disputed contracts are imaginary transactions, the peculiarity of which is that the parties are trying to draw up all the documents properly, without intending to form valid legal consequences. In support of this conclusion, the court indicated that the defendants were not interested in the current state of affairs of KRAMAS CJSC, did not raise the question of the need for a general meeting of shareholders, did not demand financial and accounting documents on the Company's activities, did not take measures aimed at exercising corporate control, did not exercise other non-property rights of shareholders.
4. Essedullaev S.K. and Dzhambulatov U.V., being participants in invalid transactions, have not acquired the status of legal owners (owners) of shares, have no right to dispose of them, all subsequent transactions with shares are invalid.
5. The contracts concluded hereinafter are invalid on the basis of Art. 10, clause 2, article 168 of the Civil Code of the Russian Federation, as transactions that do not comply with the law and at the same time encroach on public interests or rights and the interests of third parties protected by law, since the parties acted with the intention of creating the appearance of a fair purchase of shares.
Comments:
1) In cases where the abuse of rights is clearly obvious and knowingly, and the transaction itself, although it does not violate any prohibitory provisions of the law, nevertheless indicates an unfair behavior of the parties, it is possible to recognize such transactions as invalid based on a combination of Articles 10 and 168 of the Civil Code
2) The subject of evidence for the described category of cases includes various circumstances considered by the court, on the basis of the norms establishing the limits of free discretion of persons participating in civil circulation.
Such circumstances may include cases when the purpose of the transaction is different from the purpose usually assumed when making this type of transaction; the actions of its parties exceed the limits of the exercise of authority; for participants in the transaction and other persons, negative legal consequences will follow, the parties to the transaction having no other obligations, the fulfillment of which as a result of the transaction will be impossible.
3) In order to recognize a transaction as invalid on the basis of Articles 10, 168 of the Civil Code of the Russian Federation, it is necessary to establish signs of abuse of the right by all of its participants, such a transaction must be completed with the intention of causing harm to others, or to allow abuse of the right in other forms. It may be expressed, inter alia, in the loss of a part of property, lost income or the need to bear expenses. Unreasonable and dishonest behavior can also indicate abuse of law.
4) The important point is that it is not enough to establish the existence of unfair actions by one of the parties to the transaction, the existence of a conspiracy between the parties, or the fact that the party to the transaction was aware of the nature of the actions of the other party, must be proved.
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