Bankruptcy tourism within Russia: issues of jurisdiction in personal bankruptcy cases

Vladislav Silchenko

doi:10.1051/shsconf/202213400106

Abstract

The paper analyzes the practice of the Supreme Court of the Russian Federation in countering bankruptcy tourism of citizens. The paper considers the cases with the criteria for jurisdiction of personal bankruptcy in Russia, and employs the category of the center of main interests of the debtor known to foreign law order. The author shows the difference between the jurisdictional links in Russia and the EU in cases of personal bankruptcy, and general and specific in the presumptions that determine the jurisdiction factors. The paper provides the Russian definition of bankruptcy tourism defined by the Supreme Court of the Russian Federation for cases when a debtor-citizen 'manipulates' the jurisdiction of the bankruptcy case to transfer its consideration to the region where the debtor does not actually live, and shows the legal consequences of these actions in court proceedings. According to the author, in terms of Russian law, the practice of combating bankruptcy tourism does not imply the refusal to protect the rights which a person is abusing, it is based on the specifics of proving the jurisdiction factor – the place of residence of the debtor. The author argues the relevance of the European experience in regulating cross-border insolvency for improving the Russian legislation on bankruptcy.

Highlights

In recent years, Russian courts have faced situations when a debtor-citizen changes the registration data at the place of residence to change the jurisdiction of the bankruptcy case shortly before the creditor submits a bankruptcy application or after filing this application, but before the court accepts it [1]
According to p. 1, Art. 47 of the Constitution of the Russian Federation, no one can be deprived of the right to have his case considered by the court and the judge to whose jurisdiction it is attributed by law
Any mechanism that leads to the deviation from the jurisdiction rules established by law, which is used as a reaction to a particular behavior of a debtor-citizen, should be assessed in terms of its effect on the constitutional right of the debtor to have his case considered a bankruptcy case by the court and the judge to whose jurisdiction it is attributed by law

Summary

Introduction

Russian courts have faced situations when a debtor-citizen changes the registration data at the place of residence to change the jurisdiction of the bankruptcy case shortly before the creditor submits a bankruptcy application or after filing this application, but before the court accepts it [1]. In cross-border insolvency, the situation when the debtor chooses his preferred jurisdiction and justifies it as an optimal insolvency legislation of this jurisdiction is called 'bankruptcy tourism' [2]. This can be called a special case of the phenomenon of 'forum shopping', that is, identifying the optimal jurisdiction for a certain transaction [3]. The effect of the relocation of the citizen-debtor prior to the initiation of bankruptcy proceedings on his jurisdiction (legal consequences of the relocation of the debtor-citizen) and determination of the place of residence of the debtor-citizen (the specifics of proving the fact) are of high relevance

Results

Center of main interests of the debtor in Russian judicial practice

Conclusion