Lawyer's answers
Questions and answers on debt recovery, damages and repayment of advances
Answers on debts, interest, contractual penalties, damages, repayment of advances and unjust enrichment in commercial disputes.
What most often prevents successful debt recovery in a Russian commercial court?
Common weaknesses are an inaccurate calculation, poor links between the debt and performance records, and correspondence that changes or obscures the basis of the claim.
Break the total down by period and legal basis. Account for partial payments, calculate interest and contractual penalties correctly, and separate principal from additional claims. Each figure should follow from the contract or applicable rule; unexplained differences invite objections.
Link each part of the debt to the relevant delivery, service or acceptance record. Identify individual shipments rather than referring generally to numerous supplies. Where documents are unsigned or missing, establish what other evidence proves performance and the amount due.
Check correspondence for inconsistent amounts or changing grounds. Informal agreement to supplier expenses or bonuses may affect the balance. Explain any difference between the pre-action demand and the claim filed in court.
Audit the records before making a demand and prepare one reconciled account of the debt, with supporting documents. Gaps may be repairable later, but doing so during proceedings can be harder and subject to procedural limits.
When is it worth adding a damages claim?
Consider damages where there is identifiable additional loss, a causal link to the breach and evidence that other contractual remedies do not cover it. Avoid duplicating the same loss under different heads of claim.
Civil Code Article 15 addresses recovery of losses; Article 393 covers losses caused by non-performance or defective performance; and Article 404 concerns the creditor's contribution to the loss and grounds for reducing liability.
Establish the breach, actual loss or lost profit, causation and a supported calculation. Assess fault and the allocation of the burden of proof under the applicable liability rules. Commercial liability does not follow one identical fault standard in every case.
Actual loss requires evidence of expenses or property damage. Lost profit requires a realistic account of income that would have been earned. Distinguish loss calculated from a replacement transaction from an abstract market-price comparison; Supreme Court Plenum Resolution No. 7 of 24 March 2016 is relevant to the analysis. A reputational-loss claim also needs its own legal and evidential basis.
Avoid unsupported profit estimates, mixing actual loss with lost profit, including expenses that would have arisen anyway, or claiming losses unconnected with the breach.
A damages calculation deserves separate preparation. Adding an untested amount to a debt claim can distract from otherwise well-supported demands.
How does recovery of an advance differ from an ordinary debt claim?
An advance-refund claim requires a specific right to repayment and a clear date when that right arose. Termination may provide the basis, but it is not a universal prerequisite for every statutory repayment remedy.
An advance is payment towards future goods, services or work. The right to retain it depends on the contract, performance and applicable law. A refund may become due after termination or under a specific remedy for non-performance; an advance is not automatically a security payment.
Relevant provisions include Civil Code Article 487 on prepaid goods, Article 723 on defective work, Article 715 on the customer's rights during performance, and Articles 450–453 on termination. Select the provision that matches the contract and the reason repayment is due.
A refund may be available following a qualifying breach, valid termination, refusal to perform or a legally relevant impossibility of performance. Force majeure or a regulatory change does not automatically produce the same repayment result in every contract.
Prepare proof of the advance and its purpose, the legal basis for repayment, evidence of the breach or termination where relevant, and a calculation allowing for partial performance. Statements refusing performance, abandoned work and unanswered contacts may be relevant evidence, but are not interchangeable with a legal termination notice.
Common errors include failing to identify the actual repayment remedy, misdating the right to a refund, and treating repayment of an advance as damages. Check whether termination is required for the chosen remedy rather than assuming it is always necessary.
When is an unjust-enrichment claim appropriate?
Use unjust enrichment where money or property has been obtained or retained without a sufficient legal basis. Do not use the label to avoid examining an existing contract and the remedies that govern it.
Chapter 60 of the Civil Code governs unjust enrichment. Article 1102 addresses property acquired or saved at another person's expense without a legal basis. Its relationship with contractual and other remedies must be assessed in the particular case.
Possible situations include payment to the wrong recipient, duplicate payment, payment for a contract that was never concluded, consequences of an invalid transaction, or continued use of property without a legal basis. A wrong payment reference alone does not prove unjust enrichment; establish why the recipient has no right to retain the benefit.
Where a valid contract explains the payment or retention, begin with the contractual rules. For property damage, consider Article 1064 and any special remedy. Unlawful conduct does not automatically exclude unjust enrichment, but the relationship between remedies must be resolved without double recovery.
Weak documentation does not make every claim one of unjust enrichment. Identify the actual relationship, distinguish alternative grounds clearly and explain why Article 1102 applies despite any existing contract.
Start with the legal basis for the transfer and retention of the benefit. Choose the remedy that fits those facts; unjust enrichment is neither a universal substitute for a contract claim nor merely a last resort after every other claim fails.
What matters more in a debt dispute: the documents or evidence of payment?
Both matter. Documents establish the obligations and legal basis of the claim; actual payments and performance show what happened commercially.
The contract defines obligations. Acceptance records, delivery notes and transport documents support performance. Invoices identify the amount requested, payment instructions show the settlement history, and demands and correspondence record the pre-action dispute.
Establish whether goods or services were actually supplied, whether the customer used the result, what partial payments acknowledged, how the parties addressed quality or delay, and whether an established course of dealing helps explain the transaction.
Consistent documents and clear performance evidence strengthen a claim. Actual performance may help address documentary gaps, while apparently complete paperwork may be challenged if performance is doubtful. Neither combination guarantees a particular result or timetable.
Where acceptance records contain reservations, assess their substance. If delivery notes were signed by someone whose authority is disputed, examine actual and apparent authority under the applicable rules. If completed work is not accepted for reasons unrelated to quality, consider the evidence and Civil Code Article 720 where relevant.
Work on both the document record and proof of actual performance. Locate originals or properly certified copies, recover missing records, and preserve evidence of use, correspondence and the parties' conduct.
Can an individual be liable for a company's contractual debt?
An individual needs a separate legal basis for liability, such as a suretyship or applicable secondary-liability provision. A company's contractual debt does not automatically become the director's or owner's personal debt.
Potential routes include secondary liability under Chapter III.2 of the Bankruptcy Law, including Articles 61.11–61.13; a company's damages claim against a director under Civil Code Article 53.1; an appropriate civil claim connected with a criminal offence; or a valid personal suretyship. A damages claim belonging to the company is not automatically a direct recovery route for its creditor.
Distinguish bankruptcy, liquidation and removal of an inactive company from the register. For an excluded limited liability company, assess Article 3(3.1) of the LLC Law and Civil Code Article 64.2 where applicable. In bankruptcy, establish who may bring the claim. An inactive company or an unpaid judgment alone does not authorise recovery from a director's assets.
Assess controlling-person status, the alleged unreasonable or bad-faith conduct, its causal connection with unpaid creditor claims, and the amount sought. Applicable statutory presumptions may affect how those matters must be proved.
A suretyship under Civil Code Articles 361–367 needs proper documentation and a clear assessment of its scope and duration. A director or an owner's spouse may act as surety, but that identity does not determine whether the arrangement is legally unilateral or bilateral.
For a substantial transaction, consider negotiating a personal suretyship from a controlling person. It creates a separate contractual basis for a claim, subject to its terms and validity, rather than relying only on a possible later secondary-liability case.
Can a debt claim be expressed in foreign currency?
Yes, where the obligation and applicable law support that form of claim. Distinguish the currency in which the debt is denominated from the currency and conversion method used for payment.
Civil Code Article 317 permits a rouble obligation linked to a foreign-currency amount, generally converted at the official rate on the payment date unless the law or agreement provides otherwise. Actual payment in foreign currency requires an applicable legal basis.
The relief sought may be a foreign-currency amount payable as legally permitted, a fixed rouble sum where justified, or a rouble equivalent calculated at the applicable payment-date rate. The contract and law determine the correct formulation; the claimant cannot freely choose an advantageous conversion date.
Exchange-rate movements affect the economic value of recovery. Before fixing a rouble claim or seeking a payment-date equivalent, identify what the obligation permits and how the chosen wording affects the result. Currency volatility does not override the agreed conversion rule.
Check currency-control restrictions on resident-to-resident foreign-currency payments, rules for corporate currency accounts and the procedure for enforcing a foreign-currency judgment through the Federal Bailiff Service (FSSP).
For an international debt, keep the claim consistent with the contractual currency and lawful payment mechanism. A rouble obligation with a currency link needs precise conversion wording; naming the foreign currency alone does not resolve the exchange-rate issue.
How can recovery be pursued after judgment?
A judgment does not itself put money in the creditor's account. Recovery depends on the available assets, the enforcement route and timely follow-up.
Obtain the writ when it becomes available and select the proper enforcement route. For FSSP enforcement, identify the competent office by the debtor or asset location. The bailiff may seek information from banks, the FTS, vehicle and property registries and relevant social-insurance records, then pursue available accounts, property or company interests under the applicable procedure.
Act promptly once enforcement is available. Give the bailiff specific information about accounts, property and company interests. Direct presentation to the debtor's bank may be an alternative to bailiff enforcement; do not submit the same original writ simultaneously through incompatible routes. Seek account information through lawful channels. A restriction on an individual's departure from Russia requires its own statutory conditions; a debt exceeding RUB 30,000 is not sufficient by itself.
Other options may include challenging asset transfers, pursuing a properly founded secondary-liability claim or applying for bankruptcy. General creditor-petition thresholds include RUB 500,000 for an individual and RUB 2 million for a company, subject to the relevant conditions and exceptions. Assets held by related parties cannot be seized merely because of the relationship.
Monitor the enforcement file, make specific applications and challenge relevant inaction where justified. Check writ-presentation periods and deadlines for individual steps; enforcement is not free of time limits. Document any instalment arrangement carefully so that it does not unintentionally compromise existing rights.
Substantial recoveries may justify separate enforcement work, including asset searches, transaction challenges and assessment of personal liability. Compare the likely benefit with the cost and available assets; faster or successful recovery cannot be promised.