Penalty on Deposits Is in Doubt, but There Are Separate Opinions of the Judges of the Supreme Court

Published at the beginning of December the Resolution of the Grand Chamber of the Supreme Court in case № 320/5115/17 which we recently informed our readers about, forced the courts to resume the consideration of cases on Crimean depositors with regard to the penalty in accordance with the Law of Ukraine “On Consumer Protection”. The Supreme Court considered this month several cases involving the penalty on Crimeans’ deposits.

It is evident that the long-awaited position of the Grand Chamber could not provide an exhaustive legal certainty in the matter in question. This is proved by the existence of separate opinions of the Supreme Court judges in the majority of cases on Crimean depositors considered in December.

Separate Opinion Of Judge Krat

The judge of the Civil Cassation Court of the Supreme Court Vasyl Krat in his separate opinion in case № 757/26746/17-ц did not agree with the position of judicial panel:

«Penalty is a variable and depends only on the time for which the debtor is overdue. Therefore, the consumer’s refusal from the bank deposit agreement or the agreement termination based on a court decision does not entail such a legal consequence for the depositor (consumer) as the absence of grounds for the application of part 5 of article 10 of the Law of Ukraine “On Consumer Protection””.

The abovementioned case was considered by the Supreme Court on December 8, 2021. The Court applied the conclusions drawn in the Resolution of the Grand Chamber of the Supreme Court as of November 9, 2021, in case № 320/5115/17, and overturned the appellate court’s decision regarding the satisfaction of plaintiff’s claim for the penalty. We are currently waiting for the Resolution to be published in the Unified State Register of Court Decision for substantial analysis.

The Position Of The Grand Chamber

It is worth reminding that the Grand Chamber in its Resolution on case № 320/5115/17 confirmed the right of the depositors to demand from the bank the late charges in the amount of 3% per each day past due, however the Chamber limited the period of possible imposition of charges stating that the charges cannot be applied after the court decision on deposit agreement termination enters into force.

The Grand Chamber admitted that the charge stipulated by part 5 of article 10 of the Law of Ukraine “On Consumer Protection” shall be applied upon the breach of agreement in consumer’s favor. It is very important that in this Resolution the Grand Chamber clearly stated that there are no grounds for the deviation from the conclusions previously made by the Chamber in the Resolution as of March 20, 2019, in case № 761/26293/16-ц (proceedings № 14-64цс19). According to this Resolution the collection of penalty in the amount of funds held by the bank (deposit and interest) is lawful and consistent with the principle of proportionality.

What Crimean Depositors Should Hope For

According to Dmytro Duginov: “As an attorney who has been representing the interests of Crimean depositors since 2014, I totally agree with the position expressed by Judge Krat. I am convinced that even the entry into force of the court decision on deposit agreement termination cannot lead to the termination of consumer relationship between the parties (depositor and bank) as neither the depositor’s claim to terminate the deposit agreement, nor the termination of agreement upon the court decision leads to immediate fulfillment by the bank of its obligation on returning the deposit and interest to the depositor. All of this is just the intermediate stage on the way to the actual fulfillment of the obligation. At the same time the deposit agreement remains in force until the client receives the deposit and interest. In other words, the right for the collection of penalty in accordance with part 5 article 10 of the Law of Ukraine “On Consumer Protection” arises after the depositor applies to the bank with a demand for the return of the funds owed to him and terminates on the day of the actual receipt of these funds”.

Taking into consideration the above mentioned it should be stated that there are more questions than answers after the Grand Chamber delivered its Resolution as of November 9, 2021. We hope that the matters unsettled by this Resolution as of November 9, 2021, will finally be resolved by the Grand Chamber in case № 761/16124/15-ц (proceedings № 14-184 цс 20), which also concerns the matters of the application of the provisions stipulated in part 5 of article 10 of the Law of Ukraine “On Consumer Protection”.