Article 179. Coercion to complete a transaction or to refuse to complete it

ST 179 of the Criminal Code of the Russian Federation.

1. Compulsion to complete a transaction or to refuse to complete it under the threat of violence, destruction or damage to someone else’s property, as well as the dissemination of information that can cause significant harm to the rights and legitimate interests of the victim or his relatives, in the absence of signs of extortion, is punishable by a fine of in the amount of up to three hundred thousand rubles or in the amount of wages or other income of the convicted person for a period of up to two years, or by restriction of freedom for a term of up to two years, or by forced labor for a term of up to two years, or by arrest for a term of up to six months, or by imprisonment for a term of up to two years. a term of up to two years with or without a fine in the amount of up to eighty thousand rubles or in the amount of the wages or other income of the convicted person for a period of up to six months.

2. The same act committed: a) has lost force; b) with the use of violence; c) by an organized group - is punishable by imprisonment for a term of up to ten years.

Commentary to Art. 179 Criminal Code

1. The following are recognized as criminally punishable methods of forcing someone to complete a transaction or refuse to complete it: a) the threat of violence; b) threat of destruction or damage to property; c) threat of dissemination of information that could cause significant harm to the rights and legitimate interests of the victim or his relatives.

2. The threat of violence must be real, i.e. the victim must have reason to fear that the threat will actually be carried out. In its content, this is a threat of any physical violence.

Coercion may be accompanied by the actual use of physical violence. If this violence constitutes beatings, torture, infliction of light, moderate and serious harm to health, with the exception of qualified grievous harm to health (parts 2, 3 and 4 of Article 111 of the Criminal Code of the Russian Federation), then the act is qualified under paragraph “b” of Part .2 tbsp. 179 of the Criminal Code. In this case, the criminal can threaten and use such violence both in relation to the person from whom he seeks consent to the transaction or refusal of the transaction, and in relation to his relatives.

3. The threat of destruction or damage to someone else's property must also be real. Actual destruction or damage to someone else's property when forced to complete a transaction or refusal to complete it is qualified under the totality of Art. 167 and art. 179 of the Criminal Code.

4. Information, under the threat of dissemination of which the perpetrator seeks to force the victim to make a transaction or refuse it, can be very diverse: correspond to reality or be false. The only important thing is that making them public can cause significant harm to the rights and legitimate interests of the victim or his relatives. The threat of disclosing information about an actually committed crime cannot be considered as a manifestation of the objective side of coercion to commit a transaction or refuse to commit it, since it is not capable of causing significant harm to the legitimate interests of the victim.

If, in the process of coercion, deliberately false information is disseminated, discrediting the honor and dignity of another person or undermining his business reputation, then the act is classified as a set of crimes provided for in Art. 179 and 129 of the Criminal Code.

5. Article 179 of the Criminal Code has many common features with extortion (Article 163 of the Criminal Code). All requirements for concluding a transaction that is completely or partially free of charge for the forced party must be qualified under Art. 163 of the Criminal Code. In addition, the transactions referred to in Art. 179 of the Criminal Code, may be associated with such objects of civil rights as information, intangible benefits, etc. Article 179 of the Criminal Code covers cases of coercion to refuse to complete a transaction, including under an already concluded agreement.

Contents of Art. 179 TK

At the beginning it is indicated that in a situation of optimizing the staff, priority in continuing work is given to employees with more significant labor productivity and qualifications.

Next, groups of employees are classified who are given preference in a situation of equal productivity and degree of qualification. The article identifies five such priority categories. They include employees who:

• have two or more dependents in their family: persons who are unable to work full-time for various reasons;
• do not have other workers in the family;
• received an occupational disease or injury while working for this employer;
• are disabled during WWII or combat;
• improve their professional level without interrupting their work activities.

The conclusion states that the collective agreement may also include other categories of employees who have priority for remaining at work during staff reductions.

The analyzed article describes in detail the points that an employer should take into account when planning a massive reduction in the number of personnel. It should be noted that the list of privileged groups is open-ended, leaving the possibility of retaining other employees in addition to those directly mentioned in the article.

Second commentary to Art. 179 of the Criminal Code of the Russian Federation

1. The subject is a transaction that the victim is forced to commit or refuse to commit: purchase and sale, exchange, contract, lease, loan, etc.

2. The objective side is an act in the form of coercion to complete a transaction or to refuse to complete it. Coercion consists of influencing the victim in order to force him to make a transaction or, on the contrary, to refuse to conclude it under the threat of violence, destruction or damage to someone else’s property, or the dissemination of information that could cause significant harm to the rights and legitimate interests of the victim or his relatives.

3. The crime is completed from the moment of coercion to complete a transaction or to refuse to complete it.

4. The subjective side is characterized by direct intent. The goals of the culprit’s actions are the desire to conclude a deal or, on the contrary, to disrupt its conclusion.

5. Subject - a person who has reached the age of 16 years.

6. Part 2 of the article provides for qualifying criteria.

7. The crime should be distinguished from extortion:

1) the subject of coercion is a transaction in its civil law concept. In extortion, the subject is someone else's property, the right to property or actions of a property nature;

2) extortion directly affects property relations: the perpetrator demands gratuitous actions of a property nature, while pursuing a selfish goal. In forcing a transaction, the perpetrator, although he may be guided by selfish motives, does not strive for the gratuitousness of the concluded transaction. His main goal is to ensure that the deal is concluded. The terms of the transaction are not specified in coercion. The perpetrator can force a transaction to be completed, but cannot demand the transfer of property or the right to property to him or the commission of actions of a property nature (reducing or increasing the price of the contract, for example).

The difference between coercion to complete a transaction and extortion.

The main difference between extortion and coercion to conclude a transaction is the different subject of the attack. In the case of extortion, they include money, personal property, securities and property rights.

The subject of coercion is the relationship between economic entities.

There are also the following differences:

Additional information

It is also important to distinguish extortion from other forms of illegal actions with other people’s property - arbitrariness, theft, embezzlement and robbery. All these crimes have a similar motive, but different methods of execution. In this article we will take a closer look at their differences.

• With coercion, the injured party also receives some result from the transaction, that is, the offender offers an equivalent. With extortion, a positive result is only possible for the attacker.
• An agreement that was signed under threats in accordance with Article 179 will be invalid, but not sham. If the transaction was concluded as a result of extortion, since the attacker had the goal of formalizing his act with an agreement, then the transaction will be imaginary.
• Under coercion, a transaction may be concluded on “enslaving” terms, that is, one of the parties is forced to sign an agreement, although its terms absolutely do not meet the economic interests of the victim.

Abuse of law as a basis for declaring bankrupt transactions invalid

Genesis

Abuse of law is a complex and complex category of Russian civil law.
Suffice it to say that over the course of 10 years (since 2008), the institution of abuse of rights (Article 10 of the Civil Code of the Russian Federation) has gone from complete oblivion to being used in almost every second civil law dispute, and in isolated disputes within the framework of cases bankruptcy - and even more often.

This is caused by a problem that was not fully resolved by the introduction into the Federal Law of October 26, 2002 No. 127 “On Insolvency (Bankruptcy)” (hereinafter referred to as the Bankruptcy Law) of Chapter III.1 “Challenging the debtor’s transactions” by the Federal Law of April 28 2009 No. 73-FZ - a deliberate withdrawal of the debtor’s assets long before the debtor entered into a state of objective bankruptcy.

The basis for the application of the totality of the rules of Art. 10 and 168 of the Civil Code of the Russian Federation, in order to challenge void transactions that circumvent the requirements of the law in bankruptcy cases, the following legal positions have become available.

• Unreasonable and dishonest behavior also amounts to abuse of rights. To protect the violated rights of the victim, the court may not accept the arguments of the person who abused the right, justifying the compliance of his actions to exercise his right with the formal requirements of the law. Therefore, the norm of Art. 10 of the Civil Code of the Russian Federation can be applied both to the plaintiff and to the defendant (Review of the practice of application by arbitration courts of Article 10 of the Civil Code of the Russian Federation - Information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated November 25, 2008 No. 127).
• Based on the inadmissibility of abuse of civil rights (Clause 1 of Article 10 of the Civil Code of the Russian Federation) and the need to protect the rights and legitimate interests of creditors in bankruptcy, at the request of an arbitration manager or creditor, a transaction of the debtor, made before or after the initiation of bankruptcy proceedings, aimed at violating rights and legitimate interests of creditors, in particular, a transaction aimed at reducing the bankruptcy estate to alienate the debtor’s property to third parties at a deliberately low price (clause 10 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated April 30, 2009 No. 32 “On some issues related to challenging transactions on the grounds provided for by the Federal Law “On Insolvency (Bankruptcy)”, hereinafter referred to as Resolution No. 32).
• The presence in the Bankruptcy Law of special grounds for challenging transactions does not in itself prevent the court from qualifying a transaction made with abuse of rights as void under Art. 10 and 168 of the Civil Code of the Russian Federation (clause 4 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated December 23, 2010 No. 63 “On some issues related to the application of Chapter III.1 of the Federal Law “On Insolvency (Bankruptcy)””, hereinafter referred to as Resolution No. 63) .
• To qualify transactions as void, it is not enough to state the fact of unfair actions of one party to the transaction; it is necessary to establish the existence of either collusion between the parties to the transaction, or awareness of one party to the transaction about similar actions of the other (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated February 18, 2014 No. 15822/13 on case No. A45-18654/2012).

Subject of proof. Proof. Recommendations for evidentiary work

As already noted, the presence in the Bankruptcy Law of special grounds for challenging transactions does not in itself prevent the court from qualifying a transaction made with abuse of rights as void under Art. 10 and 168 of the Civil Code of the Russian Federation (clause 4 of Resolution No. 63, clause 10 of Resolution No. 32).

The above-mentioned clarifications refer to transactions with defects that go beyond the defects of transactions with preference or suspicious transactions (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 17, 2014 No. 10044/11 in case No. A32-26991/2009, Determinations of the Judicial Collegium on Economic Disputes Supreme Court of the Russian Federation dated April 29, 2016 No. 304-ES15-20061 in case No. A46-12910/2013, dated April 28, 2016 No. 306-ES15-20034 in case No. A12-24106/2014).

The subject of proof in cases of declaring a transaction invalid due to abuse of the right of one of the parties during its execution includes the following circumstances that have legal significance for the correct resolution of the dispute and are subject to establishment: (Definitions of the Judicial Collegium for Civil Cases of the Armed Forces of the Russian Federation dated December 1, 2015 No. 4-KG15-54, dated March 29, 2021 No. 83-KG16-2):

• the presence or absence of a purpose for completing a transaction that is different from the purpose usually pursued when making the corresponding type of transaction;
• the presence or absence of actions by the parties to the transaction that exceed the limits of the exercise of powers permitted by civil law;
• the presence or absence of negative legal consequences for the parties to the transaction, for the rights and legitimate interests of other citizens and legal entities;
• the presence or absence of other obligations between the parties to the transaction, the fulfillment of which the completion of the transaction creates or will create in the future obstacles.

The absence of at least one of the circumstances excludes the possibility of satisfying the claim on the grounds provided for in Art. 10 and 168 of the Civil Code of the Russian Federation. The plaintiff proves these facts.

In judicial practice, it is noted that abuse of law should be understood as the deliberate behavior of an authorized person in the exercise of his civil right, associated with a violation of the provisions established in Art. 10 of the Civil Code of the Russian Federation limits the exercise of civil rights, causing harm to third parties or creating conditions for the occurrence of harm (for example, Review of the judicial practice of the Twentieth Arbitration Court of Appeal on the application of Chapter III.1 “Challenging the debtor’s transactions” of the Federal Law of October 26, 2002 No. 127- Federal Law “On Insolvency (Bankruptcy)”, approved by the resolution of the Presidium of the Twentieth Arbitration Court of Appeal dated September 16, 2011).

To invalidate a transaction on the basis of Art. 10, 168 of the Civil Code of the Russian Federation, it is necessary to establish signs of abuse of rights on the part of not only the debtor, but also his counterparty. Abuse of the right of the counterparty when concluding an agreement with the debtor may be evidenced, for example, by the counterparty carrying out this transaction not in accordance with its usual purpose (for example, when concluding a contract for the sale and purchase of real estate, under which real estate is alienated from the debtor in favor of the counterparty-buyer; possession , use and disposal of the object, deriving income from it - for example, by leasing), and for other purposes, such as:

• participation of the counterparty in operations for the unlawful withdrawal of the debtor’s assets;
• the counterparty obtaining unjustified control over the progress of the insolvency case;
• implementation of agreements between the debtor and the counterparty aimed at causing harm to other creditors, depriving them of part of what they rightly expected (including the assumption of new obligations for already overdue principal obligations without a reasonable economic justification in an amount exceeding the total assets of the debtor or mortgagor , if the latter have unfulfilled obligations to their own creditors), etc.

This position is also reflected in the already mentioned Determinations of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated April 29, 2016 No. 304-ES15-20061 in case No. A46-12910/2013, dated April 28, 2021 No. 306-ES15-20034 in case No. A12-24106/2014.

In the recent Determination of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated February 14, 2021 No. 305-ES18-18538 in case No. A40-191951/2017, certain characteristics of transactions with abuse of law and their relationship with the interests of civil turnover and the use of the institution of bankruptcy in the Russian Federation are explained right. In particular, the Supreme Court of the Russian Federation indicated: “This approach (qualification as void transactions with abuse of law in bankruptcy disputes. – my note. – V.G.) allows us to counteract abuses on the part of the customer and the provider of services using the contractual structure of paid provision services and the right to freely agree on the price of the contract for the purpose of artificially creating debt, including to create the figure of a fictitious dominant creditor who controls the bankruptcy in its own interests to the detriment of independent creditors. This goal is incompatible with the objectives of the bankruptcy institution, is illegal and is not subject to judicial protection.

Due to the fact that the illegal purpose is hidden by the parties to the transaction, its existence is established by the court based on a set of indirect signs. The very fact of establishing an unreasonably high price for services, which is clearly not typical for ordinary legal relations, along with other circumstances, may indicate an abuse of law.

So, in particular, when considering this case, the appellate court found that the contract was concluded on the eve of the customer’s bankruptcy, and the act of provision of services was signed after the initiation of bankruptcy proceedings.”

However, in order to declare a transaction invalid on the grounds provided for in Art. 10 of the Civil Code of the Russian Federation, the court must establish that such a transaction was made with the intention of causing harm to another person or that the right was abused in other forms (the presence or absence of negative legal consequences for the parties to the transaction, for the rights and legitimate interests of other citizens and legal entities. It can be expressed (in relation to material goods) in the loss of part of the property sphere, lost income or the need to incur new expenses in the future - clauses 1, 2 of Article 10 of the Civil Code of the Russian Federation). Unreasonable and dishonest behavior also amounts to abuse of rights.

To qualify a transaction as completed in violation of Art. 10 of the Civil Code of the Russian Federation, the manager has the right to argue that there is either collusion between the parties to the contract, or awareness of one party to the contract about similar actions of the other party, as well as the purpose of the transaction to reduce the bankruptcy estate (illegal purpose) by proving that the debtor and his counterparty have committed specific actions of alienation property in this transaction at a deliberately reduced price to third parties, and the counterparty denies this with reference to the normality of the transaction, the real equivalence (equivalence) of the provisions under the transaction, the absence of negative legal consequences (harm) as a result of the transaction for the debtor and other persons, the absence of deterioration or improvement of the economic performance of the debtor, compliance of the reason (legal purpose) of the transaction with the chosen form of the transaction and compliance of the business purpose of the transaction with the customs and customs that have developed in the business environment.

In addition, the debtor’s counterparty has the right to refer to the manager’s omission of the limitation period.

Statute of limitations in separate disputes regarding the invalidation of the debtor’s transactions on the grounds of abuse of right

The statute of limitations for challenging void transactions on the grounds of abuse of right is three years. Suspicion periods do not apply to such transactions. However, the limitation period is calculated differently depending on the moment of the disputed transaction.

For transactions completed after September 1, 2010

In relation to the actions of an arbitration manager and/or a creditor challenging a transaction on the grounds of abuse of rights, there is currently a subjective factor that characterizes the beginning of the statute of limitations on a claim of invalidity of a transaction - the awareness of the interested party about the violation of his rights (“found out or should have known ").

By Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 30, 2013 No. 60 (hereinafter referred to as Resolution No. 60), clause 10 of Resolution No. 32 was supplemented with a new sentence, according to which, at the request of the manager or creditor to invalidate a transaction made with abuse of right (Article 10 and 168 of the Civil Code of the Russian Federation) before or after the initiation of bankruptcy proceedings, limitation of actions by virtue of paragraph 1 of Art. 181 of the Civil Code of the Russian Federation is three years and is calculated from the day when the person challenging the transaction learned or should have learned about the existence of circumstances that are the basis for declaring the transaction invalid, but not before the first bankruptcy procedure is initiated against the debtor.

The limitation period in this case for the manager/creditor is three years from the day when the person challenging the transaction learned or should have learned about the existence of circumstances that constitute the basis for declaring the transaction invalid, but not earlier than the introduction of the first bankruptcy procedure against the debtor.

For transactions completed before September 1, 2010.

The previously valid (until September 1, 2013) version of clause 1 of Art. 181 of the Civil Code of the Russian Federation linked the beginning of the limitation period for claims to apply the consequences of the invalidity of a void transaction and for claims to recognize it as invalid not with a subjective factor - the awareness of the interested party about the violation of his rights - but with objective circumstances characterizing the beginning of the execution of such a transaction, regardless of subject of challenge. Transitional provisions of the Federal Law of May 7, 2013 No. 100-FZ “On amendments to subsections 4 and 5 of Section I of Part One and Article 1153 of Part Three of the Civil Code of the Russian Federation” (clause 9 of Article 3; hereinafter referred to as Law No. 100 -FZ) it is determined that the new limitation periods and the rules for their calculation apply to claims, the deadlines for submission of which were provided for by previously applicable legislation and did not expire before September 1, 2013.

Thus, for any transaction completed before September 1, 2010 (three years before the entry into force of the provisions of Law No. 100-FZ, which amended paragraph 1 of Article 181 of the Civil Code of the Russian Federation), the statute of limitations expires before September 1, 2013. Consequently, on the date of entry into force of Law No. 100-FZ (September 1, 2013), for transactions completed before September 1, 2010, for which the managers/creditors filed an application to challenge them as committed with abuse of rights after September 1, 2013 g., the three-year limitation period, calculated according to the rules provided for by previous legislation, has expired.

The judicial practice of the Supreme Arbitration Court of the Russian Federation and the Supreme Court of the Russian Federation on the issue of calculating the limitation period when challenging void transactions of the debtor, the deadline for filing claims for which expired before September 1, 2013, is uniform (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 29, 2012 No. 15051/11 on case No. A41-25081/2009; Rulings of the Judicial Collegium for Economic Disputes of the Armed Forces of the Russian Federation dated March 17, 2015 No. 306-ES15-998 in case No. A55-3371/2013, dated November 5, 2015 No. 305-ES14-1540 on case No. A40-79862/2011).

Restitutional implications

Creditors and other persons to whom the property was transferred or to whom the debtor fulfilled obligations or duties under a transaction declared invalid on the basis of clause 1 of Art. 61.2, paragraph 2 of Art. 61.3 of the Bankruptcy Law and the Civil Code of the Russian Federation, in the event of the return of property received under an invalid transaction to the bankruptcy estate, they acquire the right of claim against the debtor, which is subject to satisfaction in the manner prescribed by the legislation of the Russian Federation on insolvency (bankruptcy).

Thus, if a transaction with a debtor is declared invalid on the grounds of abuse of right (under Articles 10 and 168 of the Civil Code of the Russian Federation), the counterparty’s claim against the debtor is restored, and the counterparty has the right to submit it to the register of claims of the debtor’s creditors (if what was received under this transaction was returned by the counterparty to the bankruptcy estate debtor).

The key problem in applying Art. 10 and 168 Civil Code of the Russian Federation

The problem of distinguishing the grounds for invalidity of transactions provided for by the Civil Code of the Russian Federation and the Bankruptcy Law has become very acute in the practice of considering bankruptcy disputes, as already mentioned in the article “Harm to the creditor is a sign of dubiousness of the bankrupt’s transactions.” The question should be raised about the actual competition of rules on the validity of a transaction between Art. 10, 168 of the Civil Code of the Russian Federation (i.e. transactions made with abuse of rights) and Art. 61.2 of the Bankruptcy Law (suspicious “harmful” transactions of the debtor). Often, bankruptcy trustees do not provide arguments about how, in their opinion, the circumstances of the violations that occurred went beyond the dispositions of clauses 1 or 2 of Art. 61.2 of the Bankruptcy Law and why it is necessary to challenge the debtor’s transaction as void on the grounds of abuse of right. This topic is the subject of special research and will be covered in detail in a separate article.