Commentary by Vladislav Shatrov on PRObankrotstvo
Do penalties take precedence over the main obligation if the amount is insufficient for full repayment? The Supreme Court will examine the issue.
The parties entered into several construction contracts. After the work was completed, the contractor filed a claim for the recovery of 28.5 million rubles (the principal debt was 5.5 million rubles). The customer, in turn, filed a counterclaim for a total of 12.9 million rubles (the principal debt was 7 million rubles).
Courts of first and appellate instances partially satisfied both claims (case No. A65-24051/2019), offset mutual claims and, as a result, recovered 2.7 million rubles in favor of the contractor, and also charged penalties.
The customer's position: the courts first paid off the contractor's penalty, and not the principal debt, which contradicts Art. 319 of the Civil Code of the Russian Federation and the explanations of the Supreme Court.
The position of the courts: offset is a procedural action regulated by the Arbitration Procedure Code of the Russian Federation and is not subject to the rules of the order of repayment established in the Civil Code of the Russian Federation.
According to Vladislav Shatrov, senior lawyer in the Bankruptcy practice at Infralex, the lower courts apparently performed a simple mathematical operation (de facto balancing (offsetting)) and established a positive balance in favor of the plaintiff.
However, the priority of repayment of the principal debt in relation to sanctions (penalties, interest under Art. 395 of the Civil Code of the Russian Federation) was previously emphasized by the Supreme Court in the Determination dated October 26, 2023 No. 305-ES23-12650 on case No. A40-206177/2021, and was also explained in paragraph 2 Item 15 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 11, 2020 No. 6: if a person was in default on the performance of the offsetting obligation, the performance deadline for which had come earlier, then interest for the use of other people's money and / or a penalty are accrued until the termination of the obligations by offset.
"The key issue to resolve was the moment of offset (i.e. the calendar date of the onset of the deadline for performance under the later of the counter obligations: for payment for contract work and elimination of deficiencies)," explained Vladislav.
Forecast: with a high probability, the Supreme Court of the Russian Federation will indicate that as a result of the offset of claims for the principal debt (RUB 5.5 million against RUB 7 million), a positive balance is formed in favor of the customer, and therefore, a penalty in the amount of RUB 8.3 million on the plaintiff's original claim is not subject to accrual.