Enforcement of arbitration awards in the Russian Federation – we collect debts from legal entities. Theory and practice

Foreword!

Collection of overdue debts from legal entities is a multi-stage and multi-variant procedure. Consider all the stages and options step by step. The material is divided into separate blocks so that everyone who reads it can easily get acquainted with exactly what he needs (at the same time, it is not forbidden to interrupt reading and make a call to a lawyer for a personal consultation).

Introduction to the topic!

The key stage of recovery in terms of complexity and feasibility is the execution of a court decision. On it, creditors – business owners, directors and even corporate lawyers who do not have experience in arbitration cases, “get stuck” for years. Therefore, legal advice on the topic. We understand thoroughly.

Collection stages: general points

1. Encashment settlement accounts of debtors.
2. Cooperation with bailiffs who implement the enforcement of the will of justice.
3. Attraction the controlling persons of the debtor to subsidiary liability.
4. Initiation bankruptcy (supervision and bankruptcy proceedings).
5. If necessary: a) starting criminal prosecution, b) submitting an application to the OFAS about bad faith, c) “pushing” on the partners and counterparties of the debtor, d) using other relevant methods.

Collection: encashment settlement accounts of debtors

Obviously, knowing whether the debtor has money and where he keeps it is mega useful information! Money stored in bank accounts can be recovered! You can start the procedure only after the entry into force of the court decision.

The first step is to submit a request to the tax office for information on the debtor’s current accounts. A request is a statement to which a copy of the writ of execution is attached. The response to the request is a refference about active and inactive accounts, the formation term of which is 5 w/d.

The second step in the debtor’s account collection process is a personal visit or sending documents by postal service (courier) to a financial institution that has an active account, in order to apply for collection.

Specific aspects of the application:

•  If this is a postal shipment, it should be done by registered mail with notification and inventory.
•  If the submission is in person to the bank, it is obligatory to register it in the journal of incoming correspondence.

Importantly! The application is submitted or sent along with the original writ of execution, and it is better to check the address for sending in advance with the bank!

If the debtor has money on the account, the bank debits them on the basis of a writ of execution within 3-5 w/d. If there are no funds, the debtor’s account is “frozen” for expenditure transactions until funds are received.

The third point to be taken into account. There are bank accounts, the collection of which is prohibited/limited by law. These are special accounts of management companies and organizations intended for operations with government contracts and government defense orders. From they can be collected exclusively: in the income of the country, for the issuance of salaries and for compensation for damage to life and health.

Problems of the stage

The collection procedure is limited by the “expiration date” of the writ of execution. It can be presented for execution only 3 years after the acquisition of legal force by a judicial act! At the same time, banks need to present only the original, therefore, if the debtor has several accounts in different banks, you will have to act within the “deadline”.

In addition, you should be aware that the collection procedure may be “slown down”:

• Because of the tax inspection, which suspended the movement on the accounts of the debtor;
• Due to the arrest of accounts by bailiffs in other enforcement proceedings;
• Due to other writs of execution of other creditors submitted for collection;
• Due to judicial seizure of funds as interim measures;
• Due to the debtor transferring money between his accounts in other banks, etc.

These problems are real problems of debt collection from foreign firms! If this option is incapacitated, it is recommended to proceed to the stage of cooperation with bailiffs who implement the enforcement of the will of justice. How to do this, read here (article in preparation).

18.01.2022

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