GILS Dispute Resolution: Belarus

BELARUS

CASE №1:

We were approached by a large producer of seed hybrids from the Republic of Moldova (hereinafter – the Client) regarding the recovery of a debt for the delivered goods from a Belarusian counterparty – an agricultural enterprise. The amount of the debt, including penalties for late payment exceeds EUR 400 000.

Pre-trial dispute resolution measures were unsuccessful, and the case was referred to the court. 

In the course of the case, the debtor raised objections about the quality of the goods (delivery of expired seeds), which required an expert examination. The debtor also filed counterclaims due to the fact that the Client did not deliver the entire volume of goods under the contract. 

We managed to prove that the quality claims were not filed and formalised in accordance with the established procedure, which deprives the debtor of the right to refer to them. Regarding claims on the volume of deliveries, we proved that the debtor did not send requests for the delivery of the entire volume of goods, was not interested in receiving them, and was not ready to pay for them. 

By the court's decision, the amount of the principal debt, as well as a part of the penalty and legal expenses were recovered from the debtor in favour of the Client. 

The decision was appealed in appellate and cassation instances, but remained in force. 

Enforcement proceedings are underway.

Alexander Korsak, Violetta Liudchyk.

CASE №2:

A mortgage agreement was concluded between the Bank and the Client (company that is a leader in the market of spare parts and equipment supplies for machine-building enterprises) to secure the obligations of the Borrower, a third party under the loan agreement. The Client and the Borrower are members of the same group of companies, but have no contractual legal relations in connection with the mortgage agreement.

Due to the Borrower's failure to fulfil the obligations under the loan agreement, the Bank applied to the Client (Pledgee) with a request to fulfil its obligations under the loan agreement. 

As it turned out, the amount of obligations under the loan agreement exceeded the value of the property under the mortgage agreement. The Bank demanded that the Client pay the entire amount of the debt, including the amount exceeding the value of the mortgaged property. 

Pre-trial negotiations did not lead to the settlement of the situation. The dispute was referred to court for resolution. 

The Bank's position was that the Pledgee was a joint debtor obliged to be liable for all obligations not fulfilled by the Borrower under the loan agreement. 

The Client provided its legal position and interpretation of the terms and conditions of the agreement, pointing out that recovery of the debt from the Client in excess of the value of the pledged property is inadmissible due to the legal nature of the mortgage agreement, the real intention of the parties when concluding the agreement. 

As a result of additional negotiations involving a conciliator and a mediator, the parties settled the dispute and entered into a mediation agreement consistent with the Client's position that it was liable only up to the value of the pledged property.

Dmitry Viltovsky, Lizaveta Tsianiuta.

CASE №3:

A construction contract was concluded between a Client, resident of Belarus (Contractor) and Customer - resident of Kazakhstan. 

Upon the fact of work performance, the parties drew up an act of rendered services and fixed the amount of debt. 

Pre-trial negotiations did not lead to the repayment of the debt. The case was referred to court. The court satisfied the claims for debt recovery. 

The court decision rendered in the simplified procedure was cancelled on the debtor's complaint. 

In the course of consideration of the dispute in the general procedure, the debtor raised objections about the lack of proper executive documentation, violation of requirements to primary accounting documents and failure of authorised employees of the debtor to agree on the documents. 

We managed to provide legal and factual substantiation refuting the debtor's arguments. 

As a result, the amount of the debt, penalty, state fee and representation expenses were recovered in full in favour of the Client.

Alexander Korsak, Anton Benko.