As part of the bankruptcy case of a major construction company, the debtor's controlling entities were held vicariously liable for the company's obligations. However, while the application for bringing the debtor's controlling entities to vicarious liability was being considered, the courts in concurrent disputes granted the applications of new creditors for inclusion in the register, thereby increasing the total amount of the company's debt. As a result of the overlap of several disputes, the amount of vicarious liability to which the debtor's controlling entities were subjected turned out to be less than the total amount owed.
KIAP lawyers were able to convince the court of original jurisdiction that it was justifiable to file an application unenumerated by law for the recovery of balance by way of vicarious liability. The court of appeal overturned the ruling of the court of original jurisdiction and threw the case out, deeming the application to be in fact an identical claim, that is, a duplicate of the main application for vicarious liability. However, KIAP lawyers were able to convince the court of cassation that the claim was not in fact identical and that it was justifiable to file an application unenumerated by law. The court overturned the decision of the court of appeal and remitted the case for reconsideration.
Upon reconsideration of the case, the application was granted in full, and the court rulings were upheld by the courts of higher instances.
Thus, courtesy of the work done by KIAP lawyers, a new court practice was formed, allowing to recover the balance by way of vicarious liability.
Follow the link to read the ruling of the court of cassation.
Senior associate Daniil Zherdev and associate Anna Andreeva contributed to the project.