INFORMATION LETTER OF THE SUPREME ECONOMIC COURT OF UKRAINE

of November 20, 2008 No. 01-8/685

About practice of application in resolution of disputes of some regulations of the current legislation

(on the materials considered by the Supreme Court of Ukraine)

For the purpose of ensuring identical and correct court practice we consider necessary to inform economic courts legal line items which are connected using the Supreme Court of Ukraine of some regulations of the current legislation and found display in its resolutions.

1. Cases on the disputes connected with protection of the civil laws and obligations on the parcel of land which is used in economic activity in which business entities participate are subordinated to economic courts.

The private company appealed to economic court with the claim for recognition invalid decisions of village councils concerning transfer into the ownership of the company of the parcels of land and recognition invalid the state acts of the property right to the earth issued based on these decisions.

By local economic court the claim it is refused with reference to the fact that subject of consideration of this case is, in particular, appeal of decisions of local government bodies and therefore the dispute over case has public character and shall be considered by the rules established by the Code of administrative legal proceedings of Ukraine. At the same time the court referred to Article part one 2, Item 7 parts one of Article 3 and Item 6 of Final and transitional provisions of the called Code.

The Economic Court of Appeal resolution of the Trial Court cancelled and made the new decision which the claim is satisfied. The relevant resolution is motivated by the reference to instructions of Articles 1, of 41, 12 Economic Procedure Codes of Ukraine according to which economic courts consider cases according to the procedure of claim production when the list of disputing parties answers instructions of article 1 of this Code, and legal relationship on which there was dispute have economic nature. At the same time the Appeal Court noted that economic courts have the right to consider cases on disputes which arise on land relations in which business entities as the earth is object of the civil laws and obligations participate and is used in economic activity based on civil agreements.

Having agreed with the conclusions of Economic Court of Appeal, the court of cassation instance noted that signs of the dispute subordinated to economic court are, in particular, participation in dispute of the subject of housekeeping, availability between the parties of the economic relations and dispute on the right which arises on the corresponding relations, and also absence in the law of regulation which directly would provide the decision of such dispute court of other jurisdiction. Therefore economic courts have the right to consider cases on the disputes connected with protection of the civil laws and obligations on the parcel of land in which business entities take part.

The Supreme Court of Ukraine did not find the bases for cancellation or change of the resolution of the Supreme Economic Court of Ukraine on the corresponding case (the resolution of the Supreme Court of Ukraine of 04.11.2008 No. 2-15/1652.1-2007A (2-2/1083-2005))

2. The current legislation does not deny the appeal of the creditor to economic court with the requirement concerning collection from the debtor of the amount on what debt on monetary commitment it is raised according to the procedure of indexation, and also annual interest rates from the overdue amounts for the period after adoption by court of the decision on collection of the corresponding debt.

The decision of economic court on collection from the defendant of principal debt, penalty fee, inflation charges and annual interest rates is not executed therefore the claimant based on part two of Article 625 of the Civil code of Ukraine (further - the Civil Code of Ukraine) asked to collect from the defendant the amount of inflation charges and annual interest rates for the period after adoption by court of the decision on collection of the corresponding debt.

The defendant objected to the claim for those reasons that with adoption of the judgment the civil laws and the claimant's obligations as creditor under the agreement concerning the debtor stop. Obligation availability only at the debtor in the course of accomplishment of the judgment demonstrates the termination of contractual relations of the parties, and it makes impossible application of Article 625 of Civil Code of Ukraine after adoption of the judgment and its actual accomplishment.

The claim is satisfied with the decision of local economic court with which courts of appeal and cassation instances agreed. The decision is motivated that the right of the creditor to require debt repayment taking into account the inflation index and annual interest rates is method of protection of its property right and interest which essence consists in compensation of material losses of the creditor from depreciation of money owing to inflationary tendencies and receipt of compensation (payment) from the debtor for use of the money withheld by it ought to payment to the creditor. At the same time the court referred to instructions of Articles 519, of 612 and 625 Civil Code of Ukraine.

The Supreme Court of Ukraine recognized correct the conclusions of economic courts concerning collection of inflation charges and annual interest rates on the existing debt on pending obligation, proceeding from the following.

According to Articles 598-609 of Civil Code of Ukraine the judgment about debt collection is not the basis for the termination of monetary commitment.

At the same time instructions of Article 625 of Civil Code of Ukraine do not deny the address of the creditor with the requirement about collection from the debtor who delayed accomplishment of monetary commitment, the amount on which the debt on monetary commitment is raised according to the procedure of indexation, and also annual interest rates from the overdue amounts on failure to carry out of monetary commitment, in particular, for the period after adoption of the relevant decision by court (the resolution of the Supreme Court of Ukraine of 30.09.2008 No. 1/384-07).

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