Subsidiary liability of controlling persons

A controlling person of the debtor is defined in Article 61.10 of Federal Law No. 127-FZ on Insolvency (Bankruptcy). The statutory test focuses on whether a person had the ability, within the legally relevant period, to give binding instructions to the debtor or otherwise determine its actions. Formal office, ownership and actual control may all be relevant. The assessment is fact-specific. Resolution No. 53 of the Plenum of the Russian Supreme Court of 21 December 2017 addresses how courts determine control from the totality of circumstances. Subsidiary liability in bankruptcy and a separate damages claim are different remedies. A derivative damages claim may also be available outside bankruptcy under the relevant corporate-law rules, including Article 53.1 of the Russian Civil Code a claim by the company or a participant for losses caused by a director or controlling person, where the statutory conditions for that claim are met.

Subsidiary liability and damages are distinct causes of action with different elements, presumptions, amounts and limitation rules. Combining them without separating the legal bases can obscure the issues. Subsidiary liability under Article 61.11 of Federal Law No. 127-FZ concerns liability for inability to satisfy creditors' claims where the statutory conditions and applicable presumptions are met. The potential amount is linked to the unsatisfied creditor claims, subject to the Bankruptcy Law's rules. A damages claim may instead arise under corporate law Article 53.1 of the Russian Civil Code or under Article 61.20 of Federal Law No. 127-FZ, depending on the circumstances. A damages claim focuses on specific loss and requires proof under the applicable liability model. For the defence, the evidential strategy therefore differs: subsidiary-liability presumptions must be addressed on their own terms, while a damages claim may turn heavily on loss, causation and the calculation methodology.