Top-10: the most topical judicial disputes of 2012

On November 23, the conference “Top-10: the most topical judicial disputes of 2012” organized by The Moscow Times newspaper was held. The Conference was opened by the session dedicated to antitrust proceedings. Sergey Puzyrevsky, Chief of Law Department of the FAS of Russia, who spoke on the antitrust cases practice, and Vladimir Korneev, Head of Public Law and Process of the Higher Court of Arbitration of the Russian Federation, who dwelt on the procedural problems of consideration of the cases on competition law violations, were among the speakers at the event.
Judges of the Higher Court of Arbitration of Russia Vasily Vitriansky, Sergey Sarbash and Dmitry Dedov also spoke at the litigation session.

Together with the participants of the conference, the representatives of the authorities have discussed:

• What kind of court disputes have arisen in connection with the enactment of the Third Antitrust Package;
• What are the negative consequences of ignoring guilt as the essential element of violation of competition law;
• What were the purposes of changing the current edition of the Civil Code of Russia regarding the ruling of an agreement invalid and not executed;
• In what way did the judicial practice on civil law, financial and customs disputes in 2012 change as compared to the previous years.

More particular questions were also discussed: for example, whether a transaction of discharging a debt is ruled invalid if the creditor is aware of the signs of the debtor’s insolvency, and what consequences of invalidity are applied to it; in what cases the bank is or is not entitled to receive special remuneration (commission), etc.

Dmitry Dedov, Judge of the HCA of Russia, presented to the members of the Conference key financial disputes of 2012, having given special attention to the practice of consideration of the cases, when the debtor goes bankrupt. For example, the Judge characterized the Resolution No. 14104/1 by the Board of the HCA of Russia dated 20.032012, which deals with ruling invalid the transaction of discharging the debt under a credit agreement and the application of the consequences of its invalidity, as a turning point.
D.Dedov told of a dangerous trend, when dishonest participants resort to the “surety-debtor” scheme: for example, they may affiliated, or one of those companies may be specially created for the receipt of the loan etc. The control and dependency between them may vary, but this tandem may lead to abuses. The expert is of the opinion that changes to the legislation regarding the regulation of bankruptcy of a group of entities (system bankruptcy) are overdue.

The problem of equity of creditors is no less discussed. D.Dedov pointed out a kind of discrimination: the initiative creditor, who claims that the debtor is bankrupt, acts in the interests of other creditors, but, as a result, receives less than everyone else.

The Judge said that another problematic tendency was the active participation of the ventures in option commerce, which nowadays looks more like a “Klondike for corrupt officials”. In particular, the Judge recommended for study the Resolution No. 15740/11 by the Board of the HCA of Russia, dated 26.06.2012.

Maxim Rovinskiy, Head of Tax and Customs Law Practice of the Law Firm "YUST", and Sergey Savseris, Partner of “Pepeliaev Group” commented on the most significant resolutions by the HCA of Russia on tax disputes in 2012.

Maxim Rovinskiy believes that the most interesting questions, which were answered by the Board of the HCA of Russia, include:

• May the bonuses paid by the supplier to the purchaser be classified as payment for services rendered by the purchaser to the supplier (Resolution No. 11637/11 dated February 7 of 2012);
• Is the taxpayer, who has paid on his own the tax under the tax authority’s decision subsequently ruled invalid, entitled to demand that the tax authority pay him the interest under Article 79 of the TCRF (Resolution No. 16551/11 dated April 24 of 2012);
• Whether it is legal to apply the multiplying coefficient to the calculation of tax amortization on main assets used in the regime of more than two shifts, if the assets are intended for continuous use (Resolution No. 7221/12 dated November 20 of 2012);
• Whether an amicable agreement between the taxpayer and the tax authority on the dispute to rule invalid the decision of the latter is against the law (Resolution No. 16370/11 dated June 26 of 2012);
• Whether the inspectorate, according to the results of a field tax check, is entitled to demand payment of VAT, which was earlier repaid by it according to the results of the office tax check, when there are no legal motives for that (Resolution No. 12207/11) dated January 31 of 2012);
• Whether excessive calculation of the land tax as well as other taxes accounted as expenses (including as the result of non-application of a benefit or other exemption) may be qualified as a mistake during the calculation of the income tax (Resolution No. 10077/11 dated January 17 of 2012);
• If an inspectorate may draw the conclusion, whether or not the amount of the interest paid by the taxpayer corresponds to the market amount of interest exacted from debt obligations, by comparing only the conditions of the taxpayer’s credit obligations (Resolution No. 9898/11 dated January 17 of 2012);
• If there are any grounds to accept for deduction the amount of VAT paid to the contractors as a part of the price of the works of liquidation of fixed assets (Resolution No. 12987/11 dated January 31 of 2012);
• Which factors the court should take into account in order to ascertain the amount of legal costs to be exacted from the losing party (Resolution No. 16067/11 dated March 15 of 2012);
• Whether or not a tax not withheld by the tax agent from a foreign entity, which is not included in the tax register of Russia, may be exacted from the tax agent (Resolution No. 15483/11 dated April 3 of 2012);
• Whether a negative rate difference on an obligation to pay dividends in foreign currency should be accounted for taxation purposes (Resolution No. 16335/11 dated May 29 of 2012);
• Whether or not such VAT object as rendering services “for own needs” arise with the taxpayer, if the taxpayer’s expenses on the services of auxiliary production are to be accounted as expenses during calculation of the income tax (Resolution No. 75/12 dated June 19 of 2012);
• Whether or not the VAT payers are entitled to not keep a separate accounting of the amounts of the “incoming” VAT, if the share of expenses on VAT-free operations does not exceed 5% of the total taxpayer’s expenses (Resolution No. 2676/12 dated June 21 of 2012);
• Whether a tax authority is entitled to “automatically” refuse the taxpayer to account the entire amount of expenses, if the authority has earlier ascertained the untrustworthiness of the documents submitted by the taxpayer and has concluded that there was an intention to receive an unfounded tax profit or lack of due care when choosing the contractor (Resolution No. 2341/12 dated July 3 of 2012).

Maxim Rovinskiy drew special attention to the cases, when the Board of the HCA of Russia included a “precedent reservation” in its resolutions – the indication of the possibility to review the case in connection with the adoption of a certain resolution (for the motive of new circumstances).

After the Conference, the participants expressed their satisfaction at its results and their gratitude to the experts for interesting speeches, for the answers not only to the questions of separate cases of law-application practice, but also for the recommendations on the procedure of work organization during resolution of court disputes.

Photo © Denis Khutoretsky