The Supreme Court has consolidated the issue of qualification of transactions in bankruptcy proceedings. The application of the concept of "higher standard of proof" must be justified and cannot be applied arbitrarily.

Managing Partner of RI-Consulting, Advocate Elena Gladysheva, evaluates the position of the Supreme Court. How will it affect the practice?

"In the commented definition the RF Supreme Court formulates an ambiguous conclusion, according to which the qualification of the contested transaction in bankruptcy proceedings under Articles 10 and 168 of the Civil Code should be applied subsidiary* (direct quotation of the RF Supreme Court) to the special rules established by the Bankruptcy Law.

This approach actually gives a new reading of the legal position reflected in Clause 4 of Resolution of the Plenum of the RF Superior Commercial Court dd. 23.12.2010 No. 63 "On some issues associated with the application of Chapter III.1 of the Federal Law" On Insolvency (Bankruptcy) ", according to which the courts should keep in mind that the invalidity grounds provided in Articles 61.2 and 61.3 of the Bankruptcy Law result in voidability, not nullity of the relevant transactions. At the same time the presence in the Law on Bankruptcy of special grounds for disputing transactions under Articles 61.2 or 61.3, does not in itself prevent the court to qualify a transaction in which there was an abuse of right, as void (Articles 10 and 168 of the Civil Code).
On the basis of abovementioned Plenum No. 63 of the Supreme Arbitration Court, there is an established legal position in the litigation practice, according to which transactions in bankruptcy cases may be challenged both on special grounds, as disputable, and on general grounds, as null and void, and these grounds are evaluated by the court independently of each other.
What is also interesting is the fact that the Supreme Court of the Russian Federation, pointing to the lack of substantiation and unproven position of the applicant in the contested transaction did not send the dispute for a new hearing, and resolved the issue on the merits and dismissed the claim, which in practice occurs quite rarely," said the advocate.

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Fedresurs media has prepared statistics on bankruptcies in 2022. Specifically, it points to a 12.2% decrease in corporate bankruptcies and a 39% decrease in observational bankruptcies, with no surge after the moratorium on bankruptcies was lifted in the fall.

The rise in consumer bankruptcies also slowed, from 62% to 44.2%. Out-of-court bankruptcies are on the rise (52,6%).

Elena Gladysheva, Managing Partner of RI-Consulting, describes the bankruptcy results in 2022, according to the data provided by Fedresurs. The expert gives her evaluation of the effect of the bankruptcy moratorium, the consequences of sanctions and other negative factors of the last year.

"This statistics, in my opinion, should be viewed a little more retrospectively, rather than affecting only the period of 2022.

Taking into account the recent years, the 'point of no return', which entailed an increase in the number of bankruptcy procedures, was still 2020 - COVID-2019 and the period of self-isolation, as well as the inability to fulfill a significant amount of obligations caused by downtime and lack of funds led to bankruptcy of a significant number of companies which have not prepared sufficient reserves.
The expected outcome of the bankruptcy moratorium in 2020 was an increase in the number of procedures in 2021.

In 2021, during the period of restoration of stability, there was no significant increase of new companies replacing the bankrupt companies, i.e., "the strongest survived".

In 2022, taking into account the current realities, the bulk of those who have already passed the period of 2020 continue to work, the economy and financial plans of companies have relatively adapted to the changes taking place, and have become much more liable, taking into account the experience gained.
For the most part, bankruptcy now will be taken over by those companies whose activities are directly or indirectly related to the foreign sector - obviously, the reason for this is the sanctions imposed.

In addition, no sharp upsurge of bankruptcies of individuals is also due to the procedure of out-of-court bankruptcy of citizens, introduced by the legislator earlier, the popularity of which, on the contrary, is growing every month, which is also confirmed by the above statistics," - notes the advocate.