On 29 June 2012, the Plenum of the Supreme Court of the Russian Federation published a decree on disputes relating to the protection of consumer rights (the “Decree”).
Among other things, the Decree clarifies that when the courts resolve disputes on banks’ transferring their rights under credit agreements with individual borrowers, the courts must take into consideration that the law on the protection of consumer rights does not permit a bank or another credit organisation to transfer the claims in relation to these types of credit agreements to parties which are not licensed to conduct banking activities. Consequently, this type of transfer is permitted only if the bank is permitted to do so as per another law or agreement that contains this condition which the parties agreed upon when entering into the credit agreement.
As we noted in October 2011, the Presidium of the Supreme Court of the Russian Federation took the opposite view in an information letter, indicating that a bank may transfer its rights in relation to overdue amounts under a credit agreement with an individual borrower to organisations that do not have banking licences (including collection agencies), and without the consent of the borrower.
At this time, there is no direct provision that permits banks to transfer overdue debt to a party which does not have a banking licence. This provision appears only in the draft of the federal law on the procedure for collecting overdue debt (the “Draft Law”) prepared by the Ministry of Finance of the Russian Federation (please see the April 2012 edition of the Legal Digest), and the draft law has not yet been submitted to the State Duma of the Russian Federation (the lower house of parliament).
Consequently, until the Draft Law is adopted and becomes effective, a direct contradiction could arise between the positions of the courts of general jurisdiction and the commercial courts, which would need to be resolved by the joint clarifications of the Supreme Court of the Russian Federation and the Supreme Commercial Court of the Russian Federation.
Therefore, until these clarifications are published, banks should pay particular attention to the respective provisions of credit agreements with individuals (consumers) when reviewing issues relating to transferring their rights under relevant credit agreements or consumer credit portfolios.
[Decree No. 17 of the Plenum of the Supreme Court of the Russian Federation “On Court Review of Civil Cases on Consumer Protection”, dated 28 June 2012]