ARTICLE BY OLGA PLESHANOVA IN ZAKON MAGAZINE
A pledge securing tax claims is equivalent to an arrest
Olga Pleshanova, Head of Analytics department at Infralex, has analyzed the Definition of the Supreme Court of the Russian Federation on the case of qualification of a pledge, securing a tax claim, within the framework of a bankruptcy case.
The Supreme Court of the Russian Federation applied to the pledge securing the fulfillment of tax claims in the amount of 110 million rubles (clause 2.1 of Article 73 of the Tax Code of the Russian Federation), the provisions of clause 5 of Article 334 of the Civil Code of the Russian Federation, and not clause 1 of Article 334.1 of the Civil Code of the Russian Federation: the pledge was recognized not as an ordinary one, arising on the basis of an agreement/law and retaining its force in bankruptcy, but as an arrest pledge, arising in connection with security measures in the form of seizure of property and by virtue of its procedural nature, not providing a justified pledge priority in the bankruptcy case.
The judicial act, in Olga's opinion, became the quintessence of the latest court practice (the Collegium of the Supreme Court of the Russian Federation referred to a number of well-known cases that constitute the foundation for new conclusions) and touched upon the following issues:
- the relevant branch of law of the institution of pledge;
- collateral by virtue of law (ordinary collateral) and seizure of collateral;
- admissibility of ordinary collateral in public law relations;
- the fate of seizure of collateral in the bankruptcy process, i.e. the relationship between tax and bankruptcy rules;
- the possibility of challenging the collateral established by the norms of the Tax Code of the Russian Federation in securing previously arisen claims, as a transaction with preferences on bankruptcy grounds.
Olga draws attention to the fact that the lower courts, which recognized the tax authority as secured creditor, limited themselves to a brief reference to paragraph 2.1 of Article 73 of the Tax Code of the Russian Federation ("collateral ... on the basis of law"), while the Collegium of the Supreme Court of the Russian Federation, on the contrary, examined the problems of existence from a civilistic point of view: collateral under Article 73 of the Tax Code of the Russian Federation is a temporary pledge within the meaning of civil legislation, therefore, a pledge based on paragraph 2.1 This article is a special case of a pledge that arose as a result of arrest under paragraph 5 of Article 334 of the Civil Code of the Russian Federation.
In addition to the controversial conclusions of the Supreme Court of the Russian Federation, the expert also examined in detail how the issue of an arrest pledge was formulated:
“The problem arose in 2019 after the ENBIMA Group case, paragraph 2.1 of Article 73 of the Tax Code of the Russian Federation, which provided for the automatic transformation of security measures into a pledge based on the law. Thus, an attempt was made to create an ordinary pledge with the corresponding priority in bankruptcy cases. The pledge under paragraph 2.1 of Article 73 of the Tax Code of the Russian Federation directly extended the basic rules of the Civil Code of the Russian Federation, which indicate the intention to bring the tax pledge under the civil law institution.”
In considering the case of the SCES, the Supreme Court of the Russian Federation noted that the amendments made to Article 73 of the Tax Code of the Russian Federation in 2019 were not accompanied by corresponding changes in the bankruptcy legislation. However, the expert said in the article that a draft of such amendments was submitted to the Gosudarstvennaya Duma, but their drafting created even more problems and contradictions.