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The Supreme Court of the Russian Federation has clarified the controversial issues related to the surety contract


 
The Supreme court has amended the regulation of pledges, established by the Supreme Arbitration Court of the Russian Federation earlier. The Decree of the Plenum of the Supreme Court No. 45 "On some issues of dispute resolution connected to pledge" dated 24.12.2020 (hereinafter – DPSC No. 45) derogates the Decree of the Plenum dated 12.07.2012 No. 42 (hereinafter – DPSAC No. 42) and resolves main problems raised in connection with the reform of this institute in 2015.
 
DPSC No. 45 provides clarifications on the following issues related to surety contract: prohibition on restriction of the guarantor's right to raise objections, plegery of the advance payment under the contract, its validity in the event of principal obligation change, as well as the validity of the contract in the event of liquidation of the guarantor.
 
Firstly, DPSC No. 45 prohibits to restrict right of the guarantor to raise objections. Thus, existing contradictions between paragraph 1 and paragraph 5 of Article 364 of the Civil Code of the Russian Federation regarding restrictions on the right of the guarantor for objections have been eliminated.
 
Secondly, despite the general rule on separate pledge of several parties, the presumption of a joint pledge for affiliated parties is established. Hence, if the pledge of affiliated parties should be separated, the contract shall include the relevant clause directly.
 
Thirdly, a significant amendment has been made in relation to securing the advance payment under the surety contract: if previously the guarantor was liable after delay in advance payment, now the grantor is liable only after delay in principal payment. At the same time, it is possible to stipulate the different rule in contract directly.
 
In addition, the Decree of the Plenum establishes the possibility for applying provisions of Federal Law No. 353-FZ "On Consumer Credit (Loan)" (Federal Law No. 353) to the surety contract. Thus, it is prohibited to oblige the guarantor to carry out life or health insurance in the surety agreement.
 
DPSC No. 45 also amends the validity of the surety agreement in case of change in the principal obligation obtained with/without the consent of the guarantor.
 
With regard to the consent of the guarantor to amend the principal obligation, the following clarifications are provided:
 
1. The consent of the guarantor to amend the principal obligation may be preliminary and subsequent.
2. The prior consent must be clear and contain the limits for modification of the principal obligation. Without these limits, the consent is considered as not issued.
3. Fixed the possibility of issuing a prior consent of the guarantor for the transfer of the debt, but it must contain criteria allowing to identify with a high degree of certainty the person or group of persons, for whom the pledge remains valid after the debt transfer.
 
The table with main consequences for pledges in connection with amending of the principal obligation is represented below:
 

Reimbursement of costs to the guarantor in case of the contract amendment without his consent

The guarantor is entitled to claim for compensation of the costs from the creditor and the debtor jointly and severally, even if such contract amendment was deemed as not worsen the situation of the guarantor.

 

Validity of the surety contract in the event of abridgement of term of performance of the main obligation without the guarantor’s consent

The creditor is entitled to demand from the guarantor the performance of his obligations only after the expiration of the term of the main obligation, which was originally established.

 

Validity of the surety contract in the event of the prolonging of the term of performance of the main obligation without the guarantor’s consent

The creditor is not entitled to demand from the guarantor the performance of his obligations before the expiring of the prolonging period. The term of the pledge is calculated as if the term of the main obligation would have not been changed.

Conclusion of the contract on jurisdiction, arbitration agreement, change of applicable law, and the reimbursement of costs

Specified actions may be regarded as grounds for deterioration of guarantor’s position. The burden of proof of the deterioration of the situation in connection with the above changes lies with the guarantor.

 

If the court resolves that such a breach takes place, then the guarantor is entitled to support its claims and objections in accordance with the law, which would apply to the relationship of the parties of the primary obligation in the absence of subsequent agreement on law, as well as to state that it is not subject to an arbitration agreement or agreement on the dispute in court of a foreign state.

If the court found that the forum selection clause, the arbitration agreement, or the agreement on applicable law extend to the guarantor, to that who succeded the rights of the lender, the additional costs of the guarantor related to the change by a debtor and a creditor named changes will be recovered from the creditor and the debtor jointly and severally

 
The clarifications regarding the validity of the surety agreement in case of the debtor's liquidation shall be highlighted as well. The surety agreement is not terminated due to the debtor's liquidation in following cases:
 
1. Creditor appeals to the court;
2. Filing a claim if the contract or law stipulates a pre-trial settlement for the dispute;
3. Submission of an application for inclusion of a claim to the bankrupt guarantor in the register by the creditor;
4. Application of the claim during the liquidation of the guarantor.
 
Thus, the updated regulation of pledges, established by the Supreme Court of the Russian Federation, resolves many previously controversial issues and helps to find a balance of interests between the guarantor, the creditor, and the debtor.
 


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