Chapter 24 of the Civil Code of the Russian Federation regulating substitution of parties in an obligation was amended by the Federal Law of 21 December 2013 N 367-FZ "On amending part one of the Civil code of the Russian Federation and the annulment of certain legislative acts (provisions of legislative acts) of the Russian Federation". Aforementioned amendments will come into force on 1 July 2014.

The main changes relate to the following:

  • possibility of partial assignment of monetary obligations, if it does not create additional burdens on fulfillment of the obligation by the debtor. Court practice have already recognized such possibility1;
  • joint and several liability of the original and new creditors in the case of the assignment without the consent of the debtor;
  • clarification that the notice of the assignment may be submitted by the original or new creditor;
  • assignment of monetary obligations executed in breach of an agreement between creditor and debtor restricting such assignment, may not lead to rescission of this agreement or make the assignment void, but does not release the creditor from liability for such breach;
  • new regulation provide for possibility of assigning future claim (in business activity), if such claim may be identified (when matured or assigned) on the basis of description in the assignment agreement;
  • definition of the moment of the claim transfer to the assignee - at the time of conclusion of the assignment agreement, and future claim - at the time of its occurrence (unless otherwise stated);
  • new list of requirements that must be fulfilled by the assignor under the assignment of rights:
    • claim exists at the time of assignment (excluding future claim);
    • authority to assign;
    • the claim has not been assigned to another person;
    • the obligation of assignor to refrain from acts that could lead to objections against the debtor of the assigned claim;
  • it is specified that the transfer of debt without the creditor's consent is void. Earlier it was stated by the court rulings2;
  • in case of debt transfer under the agreement between the creditor and the new debtor (in business activity) the original and the new debtor are jointly and severally liable, unless the agreement provides for subsidiary liability or release of the original debtor from obligations;
  • under the new provisions the exemption of original debtor terminates the security of obligation’s performance by a third party, except for the cases when such person has agreed to be responsible for the new debtor.
  • new term is established - "transfer of the agreement", which means the simultaneous transfer by a party of all rights and obligations under the contract to another person.

In conclusion it should be noted that aforementioned amendments in the Russian Civil Code generally have a positive meaning as they are aimed to fill the gaps in the law, most of which, however, have already been construed in the court rulings. However upon entry of the amendments into force, these provisions will become fully legally binding as they will be fixed in the law.