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Artur Zurabian | comments for the «Advokatskaya Gazeta»: the Supreme Court suppressed an attempt to challenge pledge agreements after annulment of the addenda on the period of validity

Attorney, Head of Litigation and International Arbitration at ART DE LEX Artur Zurabian said the case under consideration was interesting. He explained that nearly simultaneous signing of a security transaction and an addendum cancelling out this transaction is a wide-spread practice of credit institutions anticipating revocation of the license. «Splitting the conditions of a security transaction into two documents, the credit institution is able to report to the Bank of Russia on the presence of liquid security, at the same time enabling the borrower to «get rid» of the security encumbering the asset on the grounds of an addendum. This case is interesting, because the borrower and the pledgor related with the borrower quite elegantly built a case that splitting the transaction into two documents implied not the unseemly purpose stated above, but a certain expression of the parties’ will to agree a special period different from the standard wording «until actual performance of the obligations», in a standalone agreement. And since they decided so, then the condition for such special period was a material condition of the pledge agreement. Consequently, invalidation of the addendum on special bankruptcy grounds would entail lack of agreement of such material condition and hence – non-existence of the pledge agreements», — said the Attorney.

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