Rustam Minnikhanov on bankruptcy of citizens: 'The annual growth of such applications is alarming for us'
The number of cases of financial insolvency of Tatarstan citizens has increased by 63% over the year
In Tatarstan, against the background of the pandemic, the number of personal bankruptcies has increased significantly — by 62,6% over the year. However, the trend towards an increase in the number of such applications has been observed over the past few years. Last year, 2,032 residents of the republic were declared financially insolvent, Chairperson of the Arbitration Court of Tatarstan Maksim Borovkov reported on 26 February. President of Tatarstan Rustam Minnikhanov is concerned about the situation, he reminded about the new possibility of out-of-court bankruptcy of citizens, which will reduce the burden on arbitration. The enforcement of court decisions leaves much to be desired. According to statistics of the Arbitration Court of the Republic of Tatarstan, the orders of enforcement worth 42,7 billion rubles were repaid by only 7 billion rubles. The management of the Arbitration Court of the Volga District focused on that the Tatarstan arbitration is the second after the Arbitration Court of Samara Oblast in terms of the number of revised decisions, although the overall level of reversals remains low — 2,08%. Read the details in the material of Realnoe Vremya.
Pandemic halted lawsuits against businesses...
On 26 February, the Presidium of the Arbitration Court of the Republic of Tatarstan summed up the results of the proceedings for the pandemic year 2020. Perhaps, for the first time in the last few years, the judges felt a significant outflow of claims from businesses and citizens. As stated by Chairperson of the Arbitration Court of Tatarstan Maksim Borovkov, the number of applications decreased by 17% and cases — by 20%.
According to him, last year, 30,197 claims were received, and 25,742 cases were investigated. The Civic Collegium investigated more than 15,000 cases, administrative — more than 10,000. 38% of cases were considered in the simplified procedure. However, the remaining pending cases increased — 9,792 cases.
The decline in legal activity is explained by the measures taken by the Russian government to protect businesses last spring. Tax deferrals were introduced for most companies, and a moratorium on bankruptcy was introduced for companies from the affected sectors of the economy. On the other hand, in the early days of the pandemic, the courts worked in a truncated mode. “From March 19 to May 8, the courts held sessions on urgent cases and on summary proceedings. Until now, the reception of citizens and the full-time reception of documents has been suspended," the head of the Arbitration Court of the Republic of Tatarstan reported.
...and gave rise to the insolvency of citizens
However, in the context of the pandemic, the flywheel of personal bankruptcies began to spin more strongly. “The number of bankruptcy cases of citizens has increased significantly — by 62,6%," Maksim Borovkov reported with concern. The number of insolvent citizens has increased from 1,250 to 2,032.
In contrast, business bankruptcies have noticeably decreased. For the first time in the last three years, the number of cases of bankruptcy of legal entities has decreased by one third.
If in 2019, there were 1,354 applications with bankruptcy claims, of which 916 ended in cases, then last year the Arbitration Court of Tatarstan registered only 934 applications, and only 683 cases became the cases.
“It would be wrong to say that there are fewer legal entities in the pre-bankruptcy state," Maksim Borovkov warned. “Since the measures taken by the Russian government to introduce a moratorium on bankruptcy have made adjustments.
The bankruptcy cases of NASKO, ASKO, Svey Firm, Tatfondbank and others are in the proceedings of the Tatarstan Arbitration Court. The number of filed insolvency claims continues to grow significantly. Last year, a bankruptcy procedure was introduced in relation to the housing cooperative Triumph-NK. More than 2,000 claims were submitted under it. “We anticipate further growth," said the head of the Tatarstan Arbitration.
Percentage of reversals of court decisions remains low — 2,08%
More than 8,600 court decisions of the Administrative Court of the Republic of Tatarstan, or 16,2% of the total number, were appealed in the appeal instance. The percentage of appeals has decreased by 4,5%. 1232 judicial acts were reversed or changed: 904 acts in appeal, 328 — by court under cassational procedure.
The percentage of reversed judgements was 2,08%. There is a positive trend in the administration of judicial proceedings.
In absolute numbers, the judges (those with the highest judicial workload) have the highest number of reversed judgements. These are judges Sharipova — 4,8%, Spiridonova — 4,47, Prokofyev — 3,86%, Sotov — 3,79%, Vorobyov — 3,7%.
The head of the Arbitration Court of the Republic of Tatarstan asked to improve the quality of the administration of justice. Most often, reversed judgements follow due to that they do not involve interested parties in the case, due to the lack of proper notification of the time of consideration of the case and other procedural violations. “One hundred such reversed judgements have been identified," Borovkov said, pointing to the need for strict compliance with procedural legislation.
The enforcement of judicial acts: more than 21,000 enforcement documents were issued, including for the collection of more than 42 billion rubles. Banks and bailiffs returned more than 1,000 documents in connection with the enforcement of judicial acts for less than 7,3 billion rubles, or 17,3%.
The statistics do not take into account the voluntary percentage of the execution of judicial acts, writ of execution, which were transformed into claims of creditors, and debts that were recognised as distressed.
The leadership of the Arbitration Court of the Volga District focused on that the Arbitration Court of Tatarstan is the second after the Arbitration Court of Samara Oblast by the number of the reversed judgements, although the overall level of reversals remains low — 2,08%.
“The annual growth of such statements is certainly alarming for us”
President of Tatarstan Rustam Minnikhanov highlighted the great contribution of judges to ensuring judicial protection of violated rights in the field of business and other economic activities. “Thank you for this work," he said. He also reminded that the support for businesses was the introduction by the Russian government of a ban on the initiation of bankruptcy proceedings at the request of creditors in relation to a number of categories of debtors.
“However, at the same time, the number of cases of bankruptcy of citizens has increased. The annual growth of such statements is certainly alarming for us, as it is becoming a trend, despite some negative consequences from this procedure," the president expressed concern. “Since September of last year, the federal legislator has introduced the possibility of bankruptcy of citizens out of court. This is expected to reduce the burden on the judges of arbitration courts!
Judicial practice has a great influence on the formation and development of public relations, including in the economic sphere. Ensuring the unity of the courts in the application of legal norms is the key to stability and predictability of relations in the field of entrepreneurship, said Minnikhanov.
The Arbitration Court of the republic was one of the first to introduce the mediation procedure. The peaceful settlement of the dispute is aimed at developing effective partnerships and a culture of business communication. This tool for resolving disputes should be promoted for wide distribution, the president believes.