21 January 2016

August 17 the Armed Forces adopted the act, which should serve as a guide to courts in proceedings for compensation for moral damages to legal entities. The Civil Code, in its original version, and up to 1 October 2013 contained a provision stating that a legal person in respect of whom information discrediting its business reputation, has the right alongside with a refutation of such information, to claim damages and moral damages. In this regard, the jurisprudence also appeared indication of a similar right organization. In this position the highest court in this matter have not been unambiguous. In his commentary portal Garant.ru Artem Anpilov understand this situation.

August 17 the Armed Forces adopted the act, which should serve as a guide to courts in proceedings for compensation for moral damages to legal entities (Determination of the Armed Forces on August 17, 2015 № 309-ES15-8331; hereinafter — Definition).

The Civil Code, in its original version, and up to 1 October 2013 (Federal Law of July 2nd, 2013 № 142-FZ) contained a provision stating that a legal person in respect of whom information discrediting its business reputation, shall have the right, along with refutation of such information to claim damages and moral harm (n. 5, p. 7, Art. 152 of the Civil Code in the original version). In this regard, the jurisprudence also appeared indication of a similar right organization (p. 11 Resolution of the Plenum of the RF Armed Forces on August 18, 1992 № 11, p. 15 Resolution of the Plenum of the RF Armed Forces on February 24, 2005 № 3).
In this position the highest court in this matter have not been unambiguous.

So, the SAC pointed out that the non-pecuniary damage — a physical and mental suffering, and based on the meaning of Art. 151 of the Civil Code it may be caused by only a citizen, but not a legal person (Decree of the Presidium of the Russian Federation dated August 5, 1997 № 1509/97, Resolution of the Presidium of the Russian Federation from December 1, 1998 № 813/98). SAC oriented courts that the goodwill of a legal entity is protected by a refutation of the information disseminated and damages, but not with the help of non-pecuniary damage.

In turn, the Constitutional Court said that the legal person is not deprived of the right to make claims for compensation for damages, including intangible, caused by depreciation of goodwill (Determination of the Constitutional Court on December 4, 2003 № 508-O). «In this case, the Constitutional Court did not equate the concept of» moral damage «and» non-material damage caused to a legal entity. «This is true, as compensation for moral damages shall be recovered upon the occurrence of physical and moral suffering, while the non-pecuniary damage — in the diminution of goodwill does not necessarily entail the physical and moral suffering of the plaintiff, «- said the lawyer law firm» Hrenov and partners «Artem Anpilov.

However, because the Civil Code, as already indicated, subject to all the rules on protection of honor and dignity of citizens to protect the company of its goodwill, this is not fully defined in terms the position of the Constitutional Court gave legal entities able to claim compensation for their non-pecuniary damage — not only the resolution of cases involving the protection of goodwill, but also in the affairs of other categories. «The plaintiffs were convinced — just in one case, such damage is possible, then why should it not be possible in other cases. In most cases with similar requirements addressed us because of the inaction of bailiffs, long time did not take any action for the enforcement of the judgment» — says the lawyer, senior lawyer of the Bar «Muranov, Chernyakov and Partners» Olga Benedskaya.
October 1, 2013, amendments to the Civil Code, eliminating any doubt that such a method of protecting civil rights, such as compensation for moral damage, can be applied only in respect of a natural person. And in Sec. 11, Art. 152 of the Civil Code is now clearly stated that the protection of business reputation of the company subject to the same rules that apply to the protection of the rights of citizens, except for the provisions of the non-pecuniary damage.

However, even after the amendment jurisprudence continued to vary, and this was a good reason. Lawyer law office «Legal Forward» Roman Gander draws attention to the fact that to satisfy the requirements of legal persons for moral damages, the courts were based primarily on the hour. 4 Art. 15 of the Constitution of the Russian Federation on the priority of international norms over national (Resolution of the Seventeenth Appellate Court on October 6, 2014 number 17AP-11420/14). The fact that the Convention for the Protection of Human Rights and Fundamental Freedoms, ratified by Russia, does not exclude the possibility of compensation for moral harm organizations. This was reflected in international practice, in particular in the European Court of Human Rights. With regard to the failure to meet the requirements, they are based on the provisions of para. 11, Art. 152 of the Civil Code with reference to the impossibility of foreclosure non-pecuniary damage. Courts thus often used motivation SAC and stressed that the legal entity by reason of its legal status devoid of a real opportunity to experience the physical and mental suffering (the decision of the Fifteenth Arbitration Appeal Court of 24 July 2015 number 15AP-9283/15).

That is why lawyers are so eagerly awaited as the Russian Armed Forces will resolve the current conflict of Russian and international law. However, the Court has determined that the issue is not affected. However, the Armed Forces stressed that the rules of the moral harm to entities not subject. We consider this matter in more detail.
The essence of the dispute

Based on the decision of the court (decision of the Arbitration Court of Perm region from January 27, 2014 № A50-15334 / 2013), the company received a writ to recover from an individual entrepreneur Sh debt in the total amount 99 333.07 rubles.

March 17, 2014 the writ was sent bailiffs and received their March 27, 2014. May 5, 2014 the company sent a request for bailiffs during enforcement proceedings. Receiving no answer, 27 August the same year the applicant applied to the court bailiffs to re-query.

As both the request FSSP Russia were left unattended, the company filed a lawsuit to recover from the state 49 666.53 rubles. for non-pecuniary damage. To meet the stated requirements, the trial court concluded that the plaintiff was in a state of uncertainty as to justify awarding him such compensation (decision of the Arbitration Court of Perm region from December 17, 2014 on the case number A50-21226 / 2014). This position was supported by the following arguments.

One of the main tasks of the executive production is the correct and timely execution of judicial acts (Art. 2 of the Federal Law of October 2, 2007 № 229-FZ «On Enforcement Proceedings»). And the damage caused to a legal entity as a result of inaction of state agencies, local governments or their officials shall be compensated for the expense of the budget (Art. 1069 Civil Code).
With regard to the validity of claims for compensation for moral damages to the plaintiff, the court pointed out that part of the Russian legal system is the Convention for the Protection of Human Rights and Fundamental Freedoms, including the practice of the European Court of Human Rights (Art. 15 of the Constitution). Thus, in the judgment of the European Court of Human Rights of 6 April 2000 in the case «Case» Komingersoll SA «(Comingersoll SA) against Portugal," it was noted that the Court can not exclude the possibility of an award of compensation for non-pecuniary damage to a commercial organization, as prolonged uncertainty which has arisen because of default by a third party of its obligations within a reasonable time shall cause the company, its directors and shareholders considerable inconvenience.
Thus, the European Court of Human Rights in determining the question of compensation entity impaired intangible good does not come from the fact that physical and moral suffering of the legal entity, and the fact of prolonged uncertainty in the adoption of a decision. That this argument was accepted as a basis for the Court of First Instance.

Since the plaintiff for a long period of time is not notified of the measures aimed at the performance of a judicial act, the court concluded that the company was in a state of uncertainty, and this fully justifies an award of compensation.

The amount of compensation for moral damages, the plaintiff arbitrarily defined as the 50% of the outstanding amount of the writ of execution was 49 666.53 rubles. The Court considered this requirement proportionate and found no reason to reduce it.

Appeal and cassation recognized the decision lawful and justified and upheld it (the decision of the Seventeenth Appellate Court on 19 February 2015 number 17AP-18311/14, the decision of the Arbitration Court of the Ural District on May 18, 2015 № F09-1824 / 15). However, the Armed Forces with the opinion of colleagues disagreed.
The position of the Russian Armed Forces

The findings of the lower courts the Armed Forces considered wrong for the following reasons.
He recalled that when the citizen has suffered moral damage, the court may impose on the offender the obligation to compensate such damage (para. 1, Art. 151 of the Civil Code).
The Court said that under the moral damage meant mental or physical suffering caused by the actions (or inaction), infringing on belonging to a national intangible benefits or violating his personal non-property or proprietary rights (para. 1, para. 4 para. 2 of the Resolution of the Plenum of the Russian Armed Forces of December 20, 1994 № 10 «Certain questions of application of the law on compensation for moral damage»).
Armed Forces of the Russian Federation also stressed that non-pecuniary damage is compensable only in cases prescribed by law (Sec. 2, Art. 1099 of the Civil Code).

Thus, from the literal content of the above provisions of the Court concluded that compensation for moral damage is only possible in the event of non-pecuniary damage citizen actions that violate his personal non-property rights or infringing on his belonging to other intangible benefits. In other cases, compensation for moral damage can take place only if there is a direct indication of this in the law.
However, since the right to a legal person demand for compensation of moral damages in the law expressly provided, the Armed Forces concluded that the reasons stated by the plaintiff to meet the demands were not available.

However, not all lawyers are inclined to believe that the imposition of the Armed Forces definition completely close the possibility of compensation for moral damage to a legal entity. «Said definition of the Armed Forces includes an internal contradiction — on the one hand, it concluded that the legal nature of the non-pecuniary damage does not imply payment to legal entities, but on the other hand, it pointed out that after all there may be some as expressly provided by law, when non-pecuniary damage to organizations possible «, — says Olga Benedskaya.
Cases for compensation for moral damage vs. case on protection of business reputation

As mentioned above, the Constitutional Court found it possible to demand compensation for non-material damages caused to a legal entity of its goodwill depreciation (Determination of the Constitutional Court on December 4, 2003 № 508-O). As a result, in the jurisprudence of the notion of the so-called «reputational» harm, the content of which is different from the moral damage caused to an individual. A similar approach was shared by the SAC, which is also yet to be proven and established facts that are required to meet the demands for compensation reputational damage (Decree of the Presidium of the Russian Federation dated 17 July 2012 № 17528/11). These circumstances, the Court took:

— existence of a wrongful act on the part of the defendant;
— occurrence of adverse effects of these actions to the claimant;
— causal link between the actions of the defendant and the occurrence of adverse effects on the side of the plaintiff.

IT IS INTERESTING

The jurisprudence on the issue of the need for the plaintiff to prove the amount of damage done when a statement of claims for «reputational» harm and went different ways. One of them, says Olga Benedskaya was the complete identification of intangible losses with ordinary losses — as a result, companies had to prove their size (the decision of the Presidium of the Russian Federation of July 9, 2009 № 2183/09). Another way was recognized for legal persons of the right to compensation «reputational» harm on the rules on compensation for moral damages without having to provide evidence of its size (FAS NWD Resolution of 26 May 2006 in the case number A05-9136 / 2005–23, Resolution FAS MO July 4, 2012 and the case number A40-77239 / 10-27-668).

Thus the plaintiff need not prove the defendant’s guilt, because it is not a necessary condition of responsibility for damage due to the spread information discrediting business reputation (Art. 1100 Civil Code).
According to Artem Anpilov, many judges did make a distinction between the moral and the «reputational» harm: moral damage, according to them, legal entities are not typical, and intangible (reputation) damage is quite admissible (judgment Eighteenth Appellate Court on August 4, 2014. № 18AP-7319/14, judgment Eighteenth Appellate Court on November 10, 2014 number 18AP-11959/2014, decision of the Arbitration Court of the Republic of Tatarstan of July 3, 2014 and the case number A65-8173 / 2014 decision of the Court of Arbitration of the Tula region July 24, 2014 in case number A68-4311 / 2014 ruling of the Arbitration Court of the Moscow District on April 21, 2015 № F05-3875 / 2015 ruling of the Arbitration Court of the Moscow District on March 23, 2015 № F05-1531 / 2015) . It is worth noting that in the case of diminishing the reputation of the legal entity of its claim for protection may be brought only by the legal entity. However, as stressed by Olga Benedskaya if the spread of certain information about the company affected by the reputation of its leader, the court may apply myself a leader, but only to protect its reputation.

Nevertheless, a number of courts interpreted literally made to the Civil Code to the October 1, 2013 changes and refused to refund legal entities even a «reputational» damage (judgment of the Fifteenth Arbitration Appeal Court of May 19, 2014 number 15AP-5403/2014 in the case number A32 -30805 / 2012, decision of the Fourth Appellate Court on January 16, 2015 number 04AP-6339/2014).

Therefore, a determination, according to Artem Anpilova is expected and logical course of the Court, including those aimed at streamlining and jurisprudence on the issue of demarcation of cases of recovery of legal persons for moral damages and disputes about the protection of business reputation. Experts also tend to believe that this judicial act will not have a negative impact on practices related to the satisfaction of the requirements for compensation «reputational» harm organizations. Roman Husak convinced: «Even if the practice courts will unfold in the opposite direction and begin failures in meeting the demands for compensation for damage the reputation on the basis of p. 11 of Art. 152 of the Civil Code, legal entities still have chances to defend the right to compensation in the COP the Russian Federation. It is very likely, will confirm its position on the admissibility of compensation for non-pecuniary damage, having your own content, which differs from the content of non-pecuniary damage caused to the citizen. «