Many Belarusians conducting a business often encounter problems while trying to recover debts. Is it really possible to fulfill the decisions of the Economic Court? What is to be done if a court officer does nothing in this respect? Many similar questions from our users were answered by a senior court officer and the Head of the Department of Fulfillment of the Court Decisions, Dmitry Viarvilsky, and “Argument” Law Group senior partner Denis Aleinikov within the framework of his own ‘The Letter of the Law’ program.

Presently such statements are not groundless, unfortunately. Besides subjective reasons there are also objective ones. Perhaps I’ll start with the latter. Ten years ago when Minsk EC was established, the Department of Fulfillment of the Court decisions was working on 487 such cases, totaling 2.9 bln roubles in debts. Last year Minsk EC court officers were already working on 18.5 thousand cases trying to recover 600 bln roubles. Taking into account that our staff has not increased in number and has always remained 13 court officers and 1 senior court officer,  load on each officer has increased 38 times.

How many such cases are being considered by Minsk EC now? To what degree has the load of work increased due to the crisis? 

Presently, the remaining number of cases is 8.5 thousand or 650 cases per one court officer. As for influence of the crisis on the growth rate of cases, the following figures will speak for themselves. Previously annual growth was 22 – 36%. In 2009 it became 75%.

And how do you cope with such load? 

The Administration of the High Economic Court of the Republic of Belarus and we ourselves within our court do everything possible and try to somehow decrease the load, but not by simplifying our activities as regards recovery of debts. In these activities we use new electronic forms of justice, electronic technologies of obtaining and collecting information which is quicker now than before. Besides, we engage new institutions, public aids which we pin our hopes on. Our public aids are mainly students though we have three helpers who graduated from institutes of higher education and for the purpose of future employment in our department they work as public aids.

Institute of public aids was established only for the Economic Court in Minsk but it is closely watched and studied as it is no secret that 70 - 80% of a court officer’s work consists in record keeping, that is, in paperwork which can be dealt with by a third- or a fourth-year student of a department of law of some institution of higher education.

Help in dealing with paperwork is okay but is it really possible for one court officer to be involved in recovery of debts within 650 cases? Doesn’t such activity become a mere formality? Doesn’t it influence the quality of the result?    

Of course, it does influence the result. It happens sometimes that a court officer recovers main portion of the debts by writing off certain sums from the debtor’s account if there is money on it, or he is waiting for the quittance based on the debtor’s promise.

And how long can he be waiting? It is money that people expect from a court officer, not the promises. Is the normative term of waiting determined for court officers? 

Legally, total term for such cases is not determined. But for certain concrete activities the terms are determined. The term of waiting for a court officer, i.e. the period during which he does nothing, is not determined. But let’s be objective: some individual businessmen think that if they don’t have money, then the court officer does nothing. That is not exactly so. In the Economic Court of Minsk we have visiting days to each court officer. On this day one can come to his officer and ask him to show what has been done. If the visitor has questions he will get qualified answers from the officer.

Do collectors’ agencies help court officers nowadays? 

Collectors’ agencies now are law firms which work by sending standard routine informational requests. They take money from their clients and then just make telephone calls to us and ask questions. Practically, they don’t help court officers, unfortunately.

What is to be done, if a court officer doesn’t do anything? Where can one lodge a complaint on his inactivity and are there many such complaints?

During 2009 we had 70 complaints of procedural nature. Only three of them were upheld, the ones on court officers’ activity or inactivity as well as 3800 appeals on the course of execution of cases. Since November we have to reply to these requests in the following manner: you can come on visiting days to your court officer and get acquainted with the materials of the case.  If  you are under the impression that the court officer is inactive or he is misleading you, you can come on a visiting day and demand the materials of the case. If the materials are kept away from you, you can approach the senior court officer.   

The number of cases where it is controlling bodies that try to recover debts – has it increased? What is the percentage of real fulfillment of these cases?     

In 2009,  1246 documents on administrative fines were received which was 9% of all cases. The number of cases of this category in comparison with the last year practically has not changed (1199 last year).   980 of them have been fulfilled that is 79% of the entire number of cases for this category.  In fact, 2.2 bln roubles were recovered for administrative offences.

What is the percentage of cases that are in reality executed in the city court?   

Totally, in 2009 our department has executed in full 4605 cases which was 45% of all completed cases of this category. 2481 cases were returned with an impossibility-of-performance note, or 24% (including those completed partially). For comparison – in 2008, 50% of the cases of this category have been executed in full and 29% were returned with an impossibility-of-performance note.

How did the unexecuted cases end?
In the Economic Court of Minsk there are many unexecuted cases due to liquidation of private enterprises, their bankruptcy and amicable agreements. Existing legislation envisages that in case of initiating of a bankruptcy case in respect of this or that individual businessman or in the course of liquidation of an enterprise, a court officer is supposed to return the executive document to the claimant with the purpose of the latter’s application either to the temporary manager or to the liquidator of the liquidation committee. Main criterion of terminating cases with an impossibility-of-performance note is non-fulfillment by the debtor of financial and economic activity, lack of financial means, debtor’s liabilities and fixed assets.             

How quickly from the moment of instigating the case must a court officer obtain initial information on the debtor and include it into the data?      
Ideally, this term should be ten days. After ten days one can get acquainted with the case. Presently, we use electronic database and it is quite easy to obtain relevant information.  If the claimant doesn’t include a payment request and doesn’t confirm presenting of the given executive document to the debtor’s account, we have seven days for voluntary execution, that is, during this period the debtor can pay his debts voluntarily.  On the eighth day the court officer must forward a payment request, if it hasn’t been done by the claimant.

Does a court officer have the right to refuse to the claimant instigating the case because the claimant hasn’t forwarded a payment request on his own? 

Today, he has no right to refuse instigating the case because of the above reason.  It’s up to the claimant whether to address directly the department of fulfillment of court decisions, the bank or other financial and credit institution.   

What is more efficient now – putting the order to a payment request or sequestration of the account as a measure by the court officer?

You got the information that the debtor has no money. What does the court officer do next? 

Next the court officer summons officials from the debtor company. He can also go there himself thus ascertaining its legal address. During his visit he can find out that, for example, contract of tenancy was annulled three months ago, and prepare a report stating that the given private enterprise isn’t located there any longer and its property isn’t established. The court officer must go to the legal address necessarily as it happens quite often that that the owner moved away but his property remained there and can be arrested. Further, the director of the company, its accountant, the founder are requested to give explanations on debtor’s liabilities, availability of any other property and financial means.  Debtor’s liabilities can be verified not only by the director’s explanations: an abstract from the bank on the cash flow since the moment of the court decision-making can also be taken, the owners of the accounts established and the debtor’s request sent.

What actions about a debtor’s liabilities can be taken by court officers?    

Presently, we often encounter problems regarding submission or non-submission of information. A court officer sends an order to the third person stating that on receiving of it all financial means and property owned by the debtor, is under arrest. Up to the final settlement of their accounts the third person is supposed to make all payments to the deposit account of the Economic Court.  If the individual businessman doesn’t reply to this order, there is Administrative Procedures Code (“PIKOAP”) where six articles are pointed, based on which a court officer can prepare a report including these reasons.  Non-submission of information can entail administrative responsibility and a fine.   
If the third person is himself in the same position as the debtor, conversion of recovery to collection of property is not allowed. At the same time we can put forward a demand to the debtor’s account.   

To avoid payment of debts by the court order, what tricks does a debtor resort to by manipulating the law?

Individual businessmen who are debtors within recovery cases believe that such devices as post factum conclusion of various agreements relating to arrested property, opening extra accounts in different banks, conclusion of agreements on delegation or cession of legal claim, decision on liquidation etc., are solid reasons for non-fulfillment of the court decision. However,  taking into account our long-term experience we must warn such businessmen that court officers know quite well various fraudulent schemes of evading execution of court decisions and remind them of administrative and criminal responsibility for such deliberate acts.

What measures can be taken personally by a court officer to debtors?  

An officer can put forward a proposal to respective bodies to restrict trips abroad for such individual businessmen. This measure is very efficient. But it can not be applied to founders and directors.

If money is recovered, how quickly must it be transferred from the deposit account of the Economic Court to the claimant’s account?  Are there any norms that determine this term? 

This term is determined by the order of Victor Kamenkov, the Chairman of the High Economic Court of the Republic of Belarus, and is equal to ten workdays from the moment of the Court’s decision as regards appurtenance of the given sum of money. Not from the moment of the money transfer, but from the moment the Court found out whom the money belongs to. The problem is, that quite a number of payments are transferred to the Court’s account from debtors, whose identity can not be established without an official request. From the moment the Court determined this or that owner of the money and the relevant case, ten workdays should pass for transfer of this money to the claimant. This order is being strictly controlled and is observed to the utmost in the Economic Court of Minsk.

What would you advise claimants or businessmen who potentially can become such?