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Article On the Issue of Execution of Court Decisions on Debt Collection from Legal Entities
Authors
VASYL SIRENKO
Name of magazine Legal journal «Law of Ukraine» (Ukrainian version)
Issue 7 / 2018
Pages 246 - 253
Annotation

According to the Ministry of Justice of Ukraine and numerous publications, in Ukraine the rate of court decisions which are not complied with exceeds 90 %, and such decisions concern billions of Hryvnias. In this absurd situation of non-compliance with court decisions the principle of unavoidability of punishment is apparently completely disregarded. The picture is most frustrating in the context of legal entities. The most common reason why such entities disregard court decisions is that the debtors have no financial and material resources. The article suggests how to solve this problem through an example involving a comparison with debt collection from alimony debtors. Having outlined the differences in implementation of the principles of liability applicable to legal entities and individuals, the author describes the situation of legal impasse and offers a way out of it. The author highlights an organically inevitable link between a legal entity and individuals, particularly, its founders and the so-called beneficiaries. Establishing a legal entity, an individual transforms his/her individual physical activity into the activity of a legal entity which is entirely controlled and guided by its founder – an individual and legal entity’s management. And the number of staff, the areas and the condition of legal entity’s operation is controlled and regulated, to the largest extent possible, by the legal entity’s founder. And at the same tine, the whole income of the legal entity is at the disposal of the founder. Thus, the author suggests that the debts arising in the course of a legal entity’s operation should be recovered at the expense of income earned by the founder from such operation. It is emphasized that such an approach to liability of founders has already been practiced within the framework of relations of the State and legal entities founded by the State. The author notes that the State is trying to make legal entities comply with court decisions by prohibiting senior management of legal entities to travel abroad in case of failure to comply with court decisions. Since judges apply such a prohibition to travel abroad to chief officers of legal entities – debtors based on their personal interpretation of law and relevant circumstances, this entails frequent evasion by chief officers -debtors of this measure aimed at securing the execution of a court decision on debt collection. In this regard, it is essential to bound judges in the imperative manner to pass binding decisions and restrict the right of legal entity’s founders and chief officers to travel abroad if the fact of evading a court decision is indisputably established. A particular emphasis is laid on the inability of officers of the court enforcement service to ensure appropriate law and order for the execution of court decisions in general and the institute of private enforcers in particular. It is suggested that a special police department should be established and granted the authority for legislative investigation of the debtor’s property status. Furthermore, evasion of court decisions accompanied by concealment of property or financial resources should be regarded as an administrative offense by the debtor and be punishable by large fines charged from chief officers and founders in favor of the State budget, with partial reimbursement of the costs pertaining to maintenance of the police agencies which enforce court decisions

 

Keywords execution of court decisions; liability of legal entities; liability of founders of legal entities; court enforcement officers
References
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