Submit your application

Supreme Court of New York: debt collection from a citizen of the Russian Federation

Indicative case for international judicial practice the case of businessman Igor Mavlyanov, ended with the fact that the American court recognized Moscow’s court decisions as fair.

The case was considered in a New York court for a little over a year. Why is it so far from the defendant’s homeland? Because it was there that he migrated after he was declared bankrupt in the Russian Federation.

Background of the case

VTB Bank provided loans to one of the Russian companies in two agreements. The only shareholder of one of the borrowing companies, Igor Mavlyanov, was the guarantor for these loan obligations.

The moment came when the contractual obligations were violated. The bank went to court with a claim against the borrowing company, and then against the guarantor. The defendant actively denied the debt – with the help of lawyers, he challenged the validity of the sureties and the amount of the debt counted by bank.

The Moscow court, in spite of everything, found the creditor’s claims justified. The defendant contested the court decision on appeal and cassation, but this gave him nothing. The law was on the bank’s side.

The defendant was declared personal bankrupt by arbitration and he, in the hope that can avoid to pay debt, moved to live in America. But, for the bank, apparently, the matter has already acquired a principled character.

The court of New York received an application for the collection of the debt on the basis of a court decision of the Russian Federation.

Consideration of the claim in New York …

“It lasted just over a year. The claim was satisfied. The American court decided that the businessman must pay the bank not only the debt itself and court costs in dollar terms, but also added 9% per annum to the claim for the use of borrowed funds.”

In a US court, the defendant’s lawyers argued that the Moscow court had made a violation. They also accused the bank of violating the bankruptcy procedure – it claims to get its money bypassing other creditors. Human rights activists also stated that the case was politicized and demanded that the claim be dismissed due to disagreements between the countries.

Under New York State law, a foreign judgment cannot be legalized in New York if it is not final, if a foreign court was not vested with personal jurisdiction over the defendants and if it was delivered without due process or ensuring the procedural rules for the proper realizating of justice.

The American judge considered that in this situation the arguments of the defendant’s lawyers are absolutely unfounded. The decision of the Moscow court was found to be fully legal, fully having force, and therefore enforceable.

Key points of the proceedings

There is political tension between the countries, but…. It is obvious that the justice system can move away from this factor and act within the framework of the law and objectively assess the situation.

In order for the bank to receive its money, the American court took interim measures against the assets of the defendant. The assets, we note, are considerable, the debtor’s real estate, according to preliminary estimates, was worth almost $ 9 million.

The analyzed case shows the reality of debt collection, even abroad. The situation is briefly described. “Behind the scenes” of this collection of international debt is the enormous work of the bank’s lawyers, who carried out it efficiently and professionally, which is confirmed by the relevant court decisions of Russia and America.



SCU on the validity of the contract after the replacement of the 1st page in it

The impossibility of establishing certain circumstances does not relieve the participants in the process from the need to prove them! This conclusion was made public by the Supreme Court of Ukraine on 25.09.19 following the results of the proceedings in case No. 397/928/16-c. The reason for the dispute was the replacement of the first page […]

Forge a document and not go to jail? Is it real?

Interestingly the judges are judging! There is no other way to say after analyzing case No. 750/5469 / 18, which reached the Supreme Court and ended with the publication of a legal conclusion on it on 03.03.2021. In the beginning there was an acquittal … The District Court concluded that the citizen was innocent of […]

Supreme Court of Ukraine explained how to recover moral damage from the state

The Cassation Chamber of the Supreme Court of Ukraine has shown to citizens that the “inviolable” state, according to the conviction of many, can also be brought to justice! With the conclusion contained in the ruling on case No. 823/782/16 of 15.08.19, the CAC of the Supreme Court “punished” the state body for improper consideration […]

The Supreme Court to the Prosecutor’s Office is a friend and comrade! Don’t believe? Read on!

The case № 638/8636/17-c considered by the Supreme Court, 05/13/2020, was closed by a legal conclusion, according to which the inactivity of the prosecutor’s office is not evidence of moral harm, therefore, it cannot be compensated! Initially, the lawsuit was initiated by a citizen who believes that the inaction of the law enforcement system is […]

Is it legal to sublet land bypassing the lessor?

Is the transfer of leased land to sublease without the consent of the owner legal? If so, in what cases? If not, when? What does the law tell us about this and how are litigations resolved between the parties to such legal relations, which, due to ignorance of regulatory rules, violate the law? Thus, lease-contractual […]

The case was considered by the Supreme Court of Ukraine

The Supreme Court of Ukraine did not allow the bank to prohibit its debtors from leaving Ukraine, since the CPCU does not have such a measure to secure claims as a temporary restriction of the right to travel abroad, even if a foreclosure procedure has been started with respect to mortgage property. Brief overview of […]