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“When the reference to the invalidity of the transaction does not work” — article by Arltan Tserenov and Farrukh Sarimsokov for the Lawyer of the Company

What's in the article: arguments that will convince the court to apply estoppel.

When it is unprofitable for a party to perform the contract, it applies to the court with a claim for invalidation of the transaction. To know how to save the deal and prevent the party from profiting from its unscrupulous behavior, read the article by Arltan Tserenov, junior lawyer of Prime Advice and Farrukh Sarimsokov for "Jurist kompanii".

Refer to the fact that the counterparty's behavior confirms the validity of the transaction

If the counterparty has declared the transaction invalid, pay the court's attention to its previous behavior. If it follows from it that the counterparty considered the transaction valid, and then for some reason tried to get rid of it, the court will recognize such behavior as unfair and will refuse him the claim [1], [2].

For example, the company tried to challenge the contract of exchange of promissory notes in the amount of 155 million rubles on the grounds that it received an unequal counter-provision. It claimed that the counterparty behaved in bad faith when concluding the contract. Three instances refused the claim, because before challenging the contract, the company disposed of the received bills. It appealed to the court to include claims based on the disputed barter agreement in the register of claims in the bankruptcy case [3].

NB The court may apply the estoppel principle in the case of a claim for the invalidity of a transaction either at the request of the party or at its own discretion.

In another case, a bankruptcy creditor challenged the sale of a share in the ownership of a non-residential building. They believed that by this transaction, the debtor withdrew part of the assets in order to hide the property from creditors.


1 Civil Code Item 5 of Article 166 of the Civil Code

2 Supreme Court 25 Item 70 of the resolution of the Plenum of the Supreme Court of 23.06.2015 No. 25 «On the application by courts of Certain Provisions of Section I of Part One of the Civil Code of the Russian Federation»

3 A70 Resolution of the AC of the West Siberian District of 27.02.2019 in case no. A70-644/2018

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