Seizure of the property as a measure to ensure the fulfillment of civil law obligations

Kulichev Roman Borisovich PhD in Law Judge of the Tushino District Court, Moscow Moscow, Panfilov Heroes, 26, 1 Kulichev@mail.ru Other publications by this author

In accordance with part 1 of Article 46 of the Constitution of the Russian Federation, everyone is guaranteed judicial protection of his rights and freedoms. The implementation of this guarantee is ensured by a legally established system of constitutional, civil, arbitration, administrative and criminal proceedings. The use of arrest in the system of civil proceedings and at the stage of execution of court decisions is an integral measure that contributes to the administration of justice and the actual execution of court decisions.

The need to ensure the fulfillment of obligations has been relevant since the times of Ancient Russia, when the plaintiff independently secured the recovery of the awarded. As V.B. Iskandirov points out, the development of the institution of securing a claim takes place in Peter's Russia of the XVII century. It was at this time that the seizure of property appeared for the first time among the interim measures. In the future, the Statute of Civil Proceedings of 1892 in article 602 stipulated that claims are secured by the imposition of a prohibition on immovable property, the seizure of movable property and surety.

After the revolution of 1917, the procedure for the seizure of property as a guarantee of civil law claims was not regulated in detail. The seizure ensured the seizure of property for state needs (requisition and confiscation). The Civil Procedure Code of the RSFSR of 1923 established that the plaintiff could ask for a claim in any state of the case until a decision was made. At the same time, claims brought against state institutions and state-owned enterprises were not subject to security, with the exception of claims arising from banking operations of credit institutions, as well as for the collection of debts of credit cooperative organizations.

The Civil Procedure Code of the RSFSR of 1964 provided for a list of measures to secure a claim, including the seizure of property or sums of money belonging to the defendant; prohibiting the defendant from performing certain actions; prohibiting other persons from transferring property to the defendant or fulfilling other obligations towards him.

Currently, measures to secure a claim are regulated by Article 140 of the Civil Procedure Code of the Russian Federation ^[9] (hereinafter referred to as the CPC of the Russian Federation), which establishes that measures to secure a claim, in particular, include the seizure of property belonging to the defendant and held by him or other persons; prohibiting other persons from performing certain actions concerning the subject dispute, including transferring property to the defendant or fulfilling other obligations in relation to him.

According to the dictionary of the Russian language by S.I. Ozhegov, arrest is understood, in particular, the prohibition to dispose of property imposed by judicial authorities ^[10].

In the current civil legislation of the Russian Federation , the legal regulation of arrest can be divided into two independent groups:

1)                Legal regulation of arrest at the stage of civil proceedings.

2)                Legal regulation of arrest at the stage of execution of a court order.

The study of arrest used in civil obligations should begin with consideration of its differences from the methods of ensuring the fulfillment of obligations established by the Civil Code of the Russian Federation (hereinafter - the Civil Code of the Russian Federation) ^[11].

In accordance with paragraph 1 of Article 307 of the Civil Code of the Russian Federation, by virtue of an obligation, one person (debtor) is obliged to perform a certain action in favor of another person (creditor), such as: transfer property, perform work, provide a service, contribute to joint activities, pay money, etc., or refrain from a certain action, and the creditor has the right to demand from the debtor the performance of his duties. Obligations arise from contracts and other transactions, as a result of harm, as a result of unjustified enrichment, as well as from other grounds specified in this Code, according to paragraph 1 of Article 307 of the Civil Code of the Russian Federation.

Paragraph 1 of Article 329 of the Civil Code of the Russian Federation establishes that the performance of obligations can be secured by a penalty, pledge, retention of the debtor's thing, surety, independent guarantee, deposit, security payment and other methods provided for by law or contract. 

The Civil Code of the Russian Federation, despite the open list of ways to fulfill the obligation, does not include arrest in it. At the same time, in contractual practice, arrest is not used as a way to ensure the fulfillment of obligations.

In order to determine what caused this, it is necessary to consider the concept of arrest used in civil obligations.

According to the Etymological online Dictionary of the Russian language, the word arrest is borrowed from German, and goes back to the Old French "arrest", formed from the Latin "arrestare" - "to detain" ^[12].

The Civil Procedure Code of the Russian Federation does not disclose either the concept of arrest or its constituent elements. However, the essence of the arrest is revealed in the sources of substantive law.

Thus, in accordance with part 4 of Article 80 of Federal Law No. 229-FZ dated 02.10.2007 "On Enforcement Proceedings" ^[13] (hereinafter referred to as Law No. 229–FZ), the seizure of the debtor's property includes a ban on disposing of property, and, if necessary, restriction of the right to use property or seizure of property.

The Tax Code of the Russian Federation ^[14] in Article 77 establishes that the seizure of property is recognized as the action of a tax or customs authority with the sanction of a prosecutor to restrict the property rights of a taxpayer-organization in respect of his property.

In modern Russian legal science, there is also no single doctrinal concept of arrest in civil obligations.

Shevchenko (Anciperova) A.I., Nestoliy V.G. indicate that the arrest consists in issuing an order prohibiting the disposal of certain property, and, if necessary, prohibiting the use of property and its seizure ^[15].

V. Belov understands by arrest the prohibition applied to a person to commit actions related to the disposal of the specified property, including measures related to its alienation, transfer to ownership, lease, contribution to the authorized capital, destruction or liquidation ^[16].

The concept of arrest is also contained in article 2 of the United Nations Convention against Corruption ^[17], according to which the suspension of operations (freezing) or arrest means a temporary prohibition of the transfer, transformation, alienation or movement of property, or temporary taking possession of such property, or temporary control over it by order of a court or other competent authority.

The analysis of the above concepts allows us to conclude that the essence of the arrest used in civil law obligations is the establishment of imperious (imperative) restrictions in the exercise of property rights in relation to the property subject to arrest.

Similar arrest measures to ensure the fulfillment of obligations in civil law include a pledge (§ 3 of Chapter 23 of the Civil Code of the Russian Federation) and the retention of a thing (§ 4 of Chapter 23 of the Civil Code of the Russian Federation).

The fundamental signs distinguishing arrest from the methods of performance of the obligation established by the Civil Code of the Russian Federation are two: 1) the person making the decision on the application of arrest 2) the stage of its application.

The Civil Code of the Russian Federation defines the principles of civil legislation based on the principles of equality of participants in the relations regulated by it and freedom of contract. Accordingly, the types of ways to ensure the fulfillment of obligations are determined by the parties to the obligation and are fixed by agreement of the parties within the framework of a specific obligation. Thus, the parties to the contract are the persons making the decision on the possible application of one or another method of ensuring the fulfillment of the obligation. The stage of making a decision on the application of one or another method of ensuring the fulfillment of an obligation is the stage of concluding a contract, characterized (as a general rule) by a voluntary agreement of persons on the establishment of civil rights and obligations.

In turn, the decision to impose an arrest is made by a person who is not a party to the obligation and who, by virtue of the law, has authority over the parties to the obligation. At the same time, the decision to impose an arrest is taken when a defect occurs in the performance of an obligation – a violation of an obligation by one of its parties.

Thus, the arrest is not a substantive and dispositive way to ensure the fulfillment of obligations, since it involves mandatory application exclusively at the procedural stage - in case of violation of an obligation by one of its parties. At the same time, it should be noted that both the measures to ensure the fulfillment of obligations provided for by the Civil Code of the Russian Federation and the arrest are exclusively aimed at creating conditions for the proper fulfillment of obligations by its parties.

Let's consider the legal issues of arrest regulation at the stage of civil proceedings.

In order to impose an arrest in accordance with paragraph 1 of part 1 of Article 140 of the Civil Procedure Code of the Russian Federation, it is necessary to issue a court ruling on the imposition of arrest. The basis for the arrest is the statement of the persons participating in the case. The Plenum of the Supreme Court of the Russian Federation of 01.06.2023 No. 15 "On some issues of the adoption by courts of measures to secure a claim, interim measures and measures of preliminary protection" ^[18] clarifies that the parties, applicants and interested persons are among the persons participating in the case who have the right to apply for interim measures, third parties.

Thus, the court in civil legal relations is not legally empowered to be the initiator of the seizure. The court only checks the existence of grounds for its imposition and makes an appropriate decision – on the imposition of arrest or refusal to do so.

In accordance with Article 141 of the Civil Procedure Code of the Russian Federation, an application for securing a claim is considered on the day of its receipt in court without notifying the defendant, other persons participating in the case. The current civil procedural legislation of the Russian Federation establishes the procedure for making a decision on the imposition of arrest, but does not regulate the procedural aspects of its implementation, which, according to the author, expresses a legal gap.

Thus, in accordance with Article 142 of the Civil Procedure Code of the Russian Federation, the court's ruling on securing a claim is enforced immediately in accordance with the procedure established for the execution of court decisions, that is, by issuing an enforcement document. The court has the right to send a decision on the seizure of property (both movable and immovable) to the body that registers the rights to such property, and without issuing a writ of execution. However, at present, neither the civil procedural legislation nor the legislation on enforcement proceedings establishes the procedure for directly sending to the registering authorities a judicial decision on the seizure and actions of the registering authorities after receiving such a decision, which, however, is widely used in practice.

In this regard, in the author's opinion, it seems appropriate to fix in more detail the procedure for the execution of a court order on the imposition of arrest.

So, section VII. "Proceedings related to the execution of court decisions and decisions of other bodies" of the Civil Procedure Code of the Russian Federation may be supplemented by Article 4281 "Execution of a court decision on securing a claim" in the following wording: "A court ruling on securing a claim may also be sent by the court for execution directly to the relevant state bodies or local self-government bodies registering property or the rights to it, their restrictions (encumbrances), transition and termination.

The state body or local self-government body registering property or rights to it, their restrictions (encumbrances), transfer and termination, within one day from the date of receipt of the court order, imposes the restrictions established by the resolution and reports this to the court that issued the resolution.".

When arrest is applied at the stage of civil proceedings, it is often identified with a ban on performing actions to register the transfer of ownership of property and prohibiting other persons from performing certain actions related to the subject of the dispute. In the definitions on the adoption of measures to secure a claim, courts often specify the following wording: "to impose an arrest in the form of a ban on the commission of actions ..." ^[19].

For the legal study of arrest, let us consider this formulation from the point of view of the theory of law. To do this, let's proceed to the study of the constituent elements of the arrest.

The current civil legislation allows us to distinguish three constituent elements of arrest: prohibition of disposal of property; restriction of the right to own and use property; seizure of property.

The prohibition of disposal of property consists in the instruction of the authorized body (court – on the basis of a ruling, bailiff - on the basis of a resolution) not to make state registration of transactions with property subject to mandatory state registration by virtue of federal law (for example, immovable property, in respect of movable property – vehicles) to the registering body. When the authorized body applies a ban on the disposal of property, the actual possession of this property by its owner does not have legal significance. An entry in the relevant state register confirming the owner's right to the property has legal significance. In fact, the owner of the property, in respect of which a ban on the disposal of property has been imposed, is not deprived of the opportunity to make transactions on the alienation of this property, to receive funds for the alienated property; the new owner is not deprived of the opportunity to use this property, but the new owner will not be able to make state registration of the transfer of the right by virtue of the record of the ban on the commission of this action. 

So, for example, it is not excluded to conclude a contract of sale in respect of real estate and a vehicle, in respect of which a ban is imposed on the performance of registration actions and the actual transfer of these objects to the buyer in possession. In fact, the use of these objects of civil rights by the buyer is not excluded. However, legally, these objects will remain owned by the seller, which entails legal consequences, such as, for example, the seller's obligation to pay taxes established by law.

Restriction of the right to own and use property.

This type of restriction of ownership is used when the property actually remains in the custody of its owner - debtor, but is included in the inventory of property (for example, an inventory of movable property located in the debtor's apartment, left to the debtor for safekeeping). When applying this element of arrest, the debtor is not deprived of the possibility of owning, using and actually disposing of the property belonging to him, but is responsible for its safety and for the alienation of this property.

The seizure of property implies its actual transfer to a storage location without the owner's ability to own and use this property (for example, the seizure of the debtor's vehicle).

Under these circumstances, it seems justified in court rulings to indicate directly the method of implementing the seizure, or a direct indication of the action to be performed with the seized property (prohibit registration actions, etc.).

This is necessary insofar as the purpose of the application of arrest at the stage of civil proceedings (as opposed to arrest at the stage of execution of a court order, which will be discussed below) is to create conditions for the real protection of the violated property (less often non–property) rights of the plaintiff, by separating certain property from the debtor's estate, corresponding to the value the violated right of the plaintiff, for further, when the claim is satisfied, the plaintiff receives satisfaction from the value of this property.

Thus, the arrest at the stage of civil proceedings implies a set of ways to secure the claim, consisting in limiting the debtor's ownership of the property belonging to him in order to protect the rights of the creditor, applied depending on the specific violation of the right.         

The study of arrest as a way to ensure civil obligations will be incomplete without considering the legal issues of the application of arrest at the stage of enforcement of court decisions.

Currently, the procedure for the enforcement of court decisions is established by Law No. 229-FZ, in which article 80 is devoted to arrest. The arrest regulated by Law No. 229-FZ is divided into two types: arrest applied in execution of a judicial act on the seizure of the defendant's property and arrest in order to ensure the execution of an enforcement document containing claims for property penalties.

The first type of arrest is applied in the case of enforcement of a judicial act on the seizure of the defendant's property. This arrest is essentially a way to implement the arrest at the stage of civil proceedings.

In accordance with part 3 of Article 196 of the Civil Procedure Code of the Russian Federation, the court makes a decision on the claims made by the plaintiff. Accordingly, the court, upon receipt of an application for acceptance of a claim in the form of seizure of property, does not search for the debtor's property, which may be seized. This authority is vested with a bailiff. The court is limited to specifying in the ruling on the seizure of the value of the property within which the seizure is imposed. The specific property subject to arrest is determined by the bailiff.

When applying this type of arrest in practice, the following legal question often arises.

In accordance with paragraph 1 of part 1 of Article 47 of Law No. 229-FZ, enforcement proceedings are terminated by a bailiff in cases of actual fulfillment of the requirements contained in the enforcement document. Accordingly, the enforcement proceedings initiated for the execution of a judicial act on the seizure of property will be terminated by the actual seizure.

At the same time, the issue of the cancellation of the arrest is resolved by the court. And a writ of execution is not issued for the determination of the cancellation of measures to secure the claim.

In accordance with part 4 of Article 47 of Law No. 229-FZ, in the resolution on the termination of enforcement proceedings, with the exception of the termination of enforcement proceedings under an enforcement document on interim measures, measures of preliminary protection, the search for the debtor, his property, the search for a child, as well as restrictions imposed on the debtor, including restrictions on leaving the Russian Federation, are canceled Of the Russian Federation, for the use of special rights granted to the debtor in accordance with the legislation of the Russian Federation, and restrictions on the debtor's rights to his property.

Accordingly, there is a legal gap - how will the arrest imposed by the bailiff's order be canceled as part of the execution of the judicial act on the seizure of the defendant's property, if the enforcement proceedings are over, and the arrest is imposed by the bailiff's order on the basis of the enforcement document.

It seems that in the case under consideration, a court order on the cancellation of the arrest has a direct effect, canceling the arrest on a particular type of property imposed by the relevant order of the bailiff and a separate order of the bailiff on the cancellation of the arrest is not required.

The second type of arrest is necessary to ensure the safety of the debtor's property. Foreclosure if the debtor fails to comply with the requirements of the enforcement document containing the requirements for property penalties, begins with foreclosure on funds belonging to the debtor, in particular, held in accounts with banks and other credit institutions. In case of insufficient funds, the bailiff has the right to begin the procedure of foreclosure on other movable and immovable property of the debtor. At the stage of the commencement of enforcement proceedings, the bailiff usually applies an arrest, which consists in prohibiting registration authorities from making records on the transfer of ownership of property. In case of insufficient funds from the debtor, the bailiff has the right to apply an arrest consisting in restricting the right to use the property or seizing the property for further foreclosure.

Thus, the arrest used to ensure the safety of the debtor's property has two purposes – protective: to ensure the safety of the debtor's estate, which can be foreclosed upon in the process of enforcement of a court order, and directly executive: for the actual commission by the bailiff-executor of actions to foreclose on property for execution at the expense of funds, proceeds from the sale of seized property, claims contained in the enforcement document.    

Therefore, arrest at the stage of execution of a court order is an independent type of arrest, which differs from arrest at the stage of civil proceedings both in its purpose and in the methods of implementation.

Considering the vapor nature of arrest in civil obligations, it is advisable to consider whether the arrest is a measure or a way to ensure civil obligations. The Civil Code of the Russian Federation in paragraph 1 of Article 329 refers to the types of enforcement of obligations as methods. The Civil Procedure Code of the Russian Federation in article 140 provides a list of measures to secure a claim.    

And again, let us turn to the dictionary of the Russian language by S.I. Ozhegov, according to which the measure, among other things, is a means to implement something, an event. A method is an action or a system of actions used in the performance of some work, in the implementation of which ^[3].

Depending on the stage at which the arrest is applied, the arrest can be both a measure and a way to ensure civil obligations.

The arrest is a security measure at the stage of civil proceedings, since in this case the arrest has a protective function and is aimed at preserving the property that is the subject of the dispute, or the property at the expense of which the claim of the recoverer can be satisfied.

At the stage of execution of a court order, arrest can be both a measure and a way to ensure civil obligations, depending on the course of enforcement proceedings. The measure of securing the arrest will be when it is imposed to ensure the safety of the debtor's property, and the method – when it is imposed for the purpose of the actual commission by the bailiff-executor of actions to foreclose on the debtor's property.

Summing up the considered issue, the author comes to the following conclusions:

1)                Arrest in civil obligations is not an independent measure to ensure the fulfillment of obligations, but combines a set of measures restricting the debtor's property rights, applied both separately and simultaneously.     

2)                Arrest in civil obligations is not established by agreement of the parties and is applied only in case of violation of the obligation by its party.

3)                Arrest in civil law obligations is not a dispositive measure to ensure the fulfillment of obligations, but is an imperative act of a person who is not a party to the obligation and who, by virtue of law, has authority over the parties to the obligation.

4) The specific type of arrest used in civil obligations depends on the stage of their protection: civil proceedings or execution of a court order.

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