Debtors never tire “inventing” different ways to avoid paying debts.
The Recoverer should expect that the debtor may apply to the Enforcement Officer a fake or real counterclaim against the Recoverer as repayment of the debt in the enforcement proceedings, but is this an effective way to “write off the debts”?
To address this issue, we turn to applicable case law.
The Private Enforcement Officer, who is a client of the Attorneys Association “JUSTLICTORS”, was appealed by the debtor in the enforcement proceedings with a request to close it based on his set-off claim.
Thus, the debtor noted that the Recoverer has a million debt to him, which he “writes off” to repay the current debt on the enforcement document and asks the Private Enforcement Officer to immediately close the enforcement proceedings against him.
Having received a refusal, the debtor appealed to the court and as the results of litigation, the Supreme Court in the panel of judges of the Commercial Court of Cassation put an end to this issue in its decision of 01.10.2020 № 914/3703/15, in particular, noting the following:
“JSC Lvivgaz (debtor) filed an application to a Private Enforcement Officer for termination of enforcement proceedings on the basis of an set-ff claim, by which JSC Lvivgaz (Debtor) notified JSC NJSC Naftogaz of Ukraine (Recoverer) of termination obligations of JSC “Lvivgas” (Debtor) to pay the debt in the amount of UAH 23,815,180.41.
As courts found that, Private Enforcement Officer having received the claime of JSC “Lvivhaz” (Debtor) to end the enforcement proceeding, the same day appealed to the JSC “NJSC “Naftogaz of Ukraine”(Recoverer) with a query to deny or confirm the debt. However, JSC “NJSC “Naftogaz” (Recoverer) provided a response in which it informed about the non-recognition of the set-off claime of JSC Lvivgaz (Debtor), as one that generates for JSC “NJSC “Naftogaz” (Recoverer) any rights or responsibilities.
Considering that JSC “NJSC “Naftogaz” (Recoverer) did not confirmed the fact of termination of the obligation by crediting counter homogeneous claims and did not confirmed the fact of absence of debt and that the Order of the Commercial Court of Lviv region dated 14.11.2019 № 914/3703/15 was not canceled, the Private Enforcement Officer had no grounds for the conclusion of full actual execution of the court decision by JSC “Lvivgas” in connection with the set-off claim, in understanding of provisions of item 9 of part 1 of article 39 of the Law of Ukraine “On Enforcement Proceedings”.
Based on the above, the panel of judges considers unjustified the complainant’s allegations that offsetting of counter-claims of JSC Lvivgaz and notification about it to a Private Enforcement Officer was the reason to eliminate the enforcement proceeding. ”
Thus, the court noted that the fact of offsetting of counter-claims by the Debtor to the Recoverer is not a payment of the debt, because such offsetting must be confirmed directly by the Recoverer in enforcement proceedings.
