Ekaterina Kopylova, tax consultant at Tax Compliance, reviewed the issue of court costs allocation for EJ-Jurist using the example of one of the decisions of the Supreme Court of the Russian Federation.

In a bankruptcy case involving a company, the Supreme Court of the Russian Federation, by its Decision No. 305-ES23-16337 of 30.01.2024, corrected significant violations committed by lower courts in resolving the issue of the distribution of court expenses incurred by a creditor to pay for the services of a representative in a separate dispute with the tax authority.

Previously, the courts reduced the amount of the claimed expenses from 15,000 rubles to 5,000 rubles (as clearly excessive) and recognized them as reimbursable from the bankruptcy estate remaining after settlements with creditors. 

The Supreme Court of the Russian Federation determined that such an approach does not comply with the basic rule of placing the burden of court costs on the losing party (Article 110 of the APC RF), which in this case is the tax authority, as well as the explanations given in paragraph 15 and paragraph 18 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of 22.12.2012 № 35 «On Certain Procedural Issues Related to the Consideration of Bankruptcy Cases».

The court also noted that the filing by the inspectorate of a formally declared, with a high probability of not being included in the register of creditors' claims should not limit the possibility of recovery of court costs by the objecting creditor and relieve the tax authority of the obligation to bear them, in fact shifting it to other persons.

In addition, the Supreme Court of the Russian Federation rightly criticized the courts' assertion that "the judicial act adopted in the dispute took place not due to the legal position of the creditor's representative, but due to the lack of evidence of the validity of the authorized body's claims against the debtor". 

A different approach would call into question the validity of any representative expenses incurred by participants in disputes with authorized bodies.

It should be concluded that the conclusions that the outcome of consideration of the claimed claims in such cases is conditioned solely on the lack of evidence and other circumstances unrelated to the actions of the representative of the other party (applicant/creditor) are at least questionable and, more often than not, do not correspond to the factual circumstances, and therefore were naturally rejected by the highest court instance.