Russian Government Submits Bill Clarifying the Grounds for Granting Creditors’ Claims for Early Performance of Obligations in Corporate Reorganisations

The Russian Government has submitted to the State Duma a draft law proposing to amend the conditions under which creditors of a company undergoing reorganisation may seek early performance of obligations or, where early performance is impossible, termination of those obligations and compensation for the resulting losses[1].

The draft law was prepared to implement Ruling No. 17-P of the Constitutional Court of the Russian Federation dated 24 March 2026[2], which found Article 60(2) of the Russian Civil Code partially unconstitutional because it permitted courts to grant creditors’ claims for early redemption of bonds following a debtor’s reorganisation without considering the debtor’s financial and economic condition or assessing the impact of the reorganisation on creditors’ interests.

Background

Under Article 60(2) of the Russian Civil Code, a creditor whose claim arose before the publication of the first notice of a company’s reorganisation may seek early performance of the relevant obligation through the courts or, where early performance is impossible, termination of the obligation and compensation for the resulting losses.

Judicial practice has developed conflicting approaches to such claims. In some cases, courts considered the mere fact of the debtor’s reorganisation sufficient grounds for early performance, provided that the creditor had complied with the statutory deadline for bringing the claim and had not received adequate security[3]. In other cases, courts assessed the debtor’s financial and economic condition and the impact of the reorganisation on creditors’ interests, refusing to order early performance where, among other things, the reorganisation had not adversely affected the creditor’s financial position[4].

The Constitutional Court held that granting creditors’ claims solely on formal grounds, without examining the debtor’s financial and economic condition or assessing the impact of the reorganisation on creditors’ interests, undermines the balance between the rights of the parties to the obligation.

Proposed Amendments

The draft law proposes to amend Article 60(2) of the Russian Civil Code and introduce a new Article 60(4.1), establishing the following provisions.

1. Clarification of the conditions for bringing creditors’ claims for early performance of obligations

The draft law proposes to amend Article 60(2) of the Russian Civil Code to provide that a creditor may seek early performance of an obligation if the creditor believes that the debtor’s reorganisation poses a material risk to the performance of that obligation when due.

However, the proposed wording does not require the creditor to prove the existence of such a risk as a prerequisite for bringing a claim before the court.

2. Introduction of an additional ground for dismissing creditors’ claims

Proposed Article 60(4.1) of the Russian Civil Code provides that a creditor’s claim must be dismissed if the company undergoing reorganisation proves that the reorganisation does not pose a material risk to the performance of the obligation when due.

Accordingly, when resolving such disputes, courts will be required to assess not only whether the formal requirements for bringing a claim have been met, but also the actual impact of the reorganisation on the debtor’s ability to duly perform its obligations to the creditor.

The burden of proving the absence of a material risk will rest with the company undergoing reorganisation. The debtor will therefore be able to seek dismissal of the creditor’s claim by providing evidence that the reorganisation does not materially jeopardise the performance of the obligation when due.

3. Clarification of the procedure for satisfying creditors’ claims

The draft law also provides that creditors’ claims submitted within the statutory deadline must be satisfied before completion of the reorganisation, provided that the court has granted those claims.

Lidings Comments

The proposed amendments are intended to prevent courts from granting creditors’ claims solely on formal grounds, without assessing the impact of a reorganisation on the performance of the debtor’s obligations.

For companies undergoing reorganisation, evidence of their financial and economic condition will become particularly important, including the composition and value of their assets, the structure of their liabilities, and their ability to perform obligations to individual creditors when due. Courts must assess the consequences of the reorganisation rather than its commercial expediency.

Nevertheless, although the Constitutional Court emphasised the need to establish statutory criteria for courts to consider when examining creditors’ claims for early performance, the draft law does not specify the factors by which courts should determine whether a reorganisation poses a material risk to the performance of obligations. Consequently, courts will retain considerable discretion in assessing the effects of a reorganisation, potentially leading to inconsistent judicial practice concerning its impact on creditors’ interests.