Contractual obligations and installment of court decision

The Grand Chamber of the Supreme Court of Ukraine, by its legal opinion in case No. 916/190/18 of 06/04/19, answered the question, does the installment plan for the execution of the judgment terminate the contractual obligation?

According to the published conclusion, the installment plan, in fact, only affects the procedure for the enforcement of the decision itself, while the nature of the contractual debt remains unchanged, since:

1. The current legislative procedure does not connect the termination of an obligation or the opening of enforcement proceedings for its compulsory execution with the presence of a court decision.
2. The presence of judicial acts on debt collection does not annul the debtor’s monetary obligations, and the creditor’s rights to receive the rights provided for in part 2 of Art. 625 GKU does not deprive the sums.

Case No. 916/190/18. Circumstances

In 2018, one legal entity filed a lawsuit against another legal entity to recover the debt under the contract – the amount of the outstanding obligation and inflation losses.

The claims were substantiated by the untimely execution by the debtor of the already existing court decision.

As it was established during the proceedings of the dispute in the Supreme Court of Ukraine, the courts of the previous instances satisfied the plaintiff’s claims. The defendant was granted a “benefit” in the form of an installment plan for the execution of the judgment.

The defendant violated the terms of the installment plan. This led to the fact that the plaintiff counted on the available debt, the inflation rate of 3% per annum provided by the law. The bodies of justice founded it unlawful. As a result, the question arose regarding the status of the installment plan: is it the basis for changing the timing of the obligation or not?

Ukrainian Supreme Court answered the question in the negative

Thus, the Grand Chamber ruled that the decision by the court of the dispute on the recovery of the contractual debt does not change the nature of the obligation, as well as the reasons for its occurrence.

The installment plan for the execution of a judgment is an additional procedural act by which the court responds to obstacles that make it difficult or impossible to execute the will of justice.

Legal advice on the topic! Neither the installment plan, nor the postponement, by their very nature, are legal transformative factors for judicial acts.

They contribute to the enforcement of a judgment without altering the very nature of a debt in a civil or business obligation.

Importantly! By the conclusion analyzed in this article in case No. 916/190/18, the BC-Supreme Court of Ukraine departed from the conclusion of the Supreme Court of Ukraine contained in the decision in case No. 905/3137 / 14-908 / 5775/14 (proceedings No. 3-1276gs15) dated 17.02.16. regulating the collection of debts through a court with identical circumstances.