Property status of the parties as a basis for reducing the amount of penalties

Abstract

The article analyses the current legislation, scientific standpoints and court practice on the property status of the parties as a basisfor reducing the amount of penalties, as well as distinguishes the features that characterize the property status of the parties and offersthe explanation of what kind of property status of the parties should be taking into account by the court when reducing fines.Based on the analysis of scientific standpoints, legislation, and materials of court practice, it is substantiated that in assessing theproperty status of the parties the most important ones are two points: heavy property status of the debtor and satisfactory property statusof the creditor at the time of the debtor’s delay in performance of the obligation. The latter is important in assessing the evidence of thecreditor’s damages and their amount because the failure to provide the evidence of the creditor’s damages or the absence of such damagesdue to the debtor’s delay in performance of the obligation is one of the grounds on which the courts satisfy the claim for reducingthe amount of penalties.The features characterizing the satisfactory property status of the creditor and the heavy property status of the debtor are determined,in particular, the satisfactory property status of the creditor is characterized by: a) the ability to fully provide stocks and costsat its own expense; b) the ability to fully and timely perform its obligations; c) stable liquidity; d) efficient use of enterprise resources;e) adequacy of own funds to avoid high risk; f) guaranteed prospects for profit. In its turn, the heavy property status of the debtor ischaracterized by the following features, namely: a) inefficient allocation of resources; b) inefficient use of resources; c) unsatisfactorypaying capacity of the enterprise; d) failure to provide stocks and costs with sources of their formation; e) the presence of overdue debtto the budget; f) insufficient financial stability; g) the enterprise is on the verge of bankruptcy;It is also proposed to consolidate at the legislative level the limits of permissible limits for reducing the amount of penalties inpercentage terms.