The SC Grand Chamber Has Determined to Which Legal Relations Between the Depositor and the Bank the Provisions of the Law on Contractual Obligations Should Be Applied

In the case of filing a lawsuit to recover funds under bank deposit agreements, including interest and inflation losses, which were not returned to the depositor in the result of a crime (criminal offence) committed by bank officials, the provisions of civil law governing contractual but not tort obligations are subject to application to the disputed legal relationship between the depositor and the bank. The commission by bank employees of a crime (criminal offence) of taking possession of deposit funds does not affect the contractual relationship between the depositor and the bank, does not refute its existence or terminate it.

The conclusion was reached by the Grand Chamber of the Supreme Court in case No. 662/397/15-ц on the claim of several persons to Raiffeisen Bank Aval PJSC for compensation of material and moral damages. According to the circumstances of the case, each of the plaintiffs entered into deposit agreements with the bank, but the bank employees, having accepted the plaintiffs' funds as a deposit under the bank deposit agreement, stole them. Such circumstances were established in the sentence of the Chaplynskyi District Court of Kherson region, which stated that the cashier and the head of the bank department had accepted funds from the plaintiffs under bank deposit agreements, but they had not deposited them in the deposit accounts. The plaintiffs asked to recover material and non-pecuniary damage from the bank, citing the requirements of Articles 22, 23, 1166, 1172, 1192 of the Civil Code of Ukraine.

By the decision of the court of first instance upheld by the resolution of the appellate instance, the claim was denied. The courts were guided by the fact that the legal relationship between the bank and the plaintiffs was contractual, therefore, a claim for damages with reference to Articles 1172, 1192 of the Civil Code of Ukraine, which regulated tort legal relations, could not be satisfied.

The Civil Cassation Court within the Supreme Court referred the case to the Grand Chamber of the Supreme Court to resolve an exclusive legal issue and depart from the conclusion made in the resolution of the Supreme Court of Ukraine of July 5, 2017 in case No. 6-1032цс17. In this case, the Supreme Court of Ukraine had considered it correct to apply Articles 1166, 1172, 1192 of the Civil Code of Ukraine to disputed legal relations. The Grand Chamber of the Supreme Court departed from this legal conclusion, since the dispute on non-fulfillment of the contract is subject to resolution using the provisions of Articles 625, 1058-1060 of the Civil Code of Ukraine.

The SC Grand Chamber noted that the courts of previous instances had correctly qualified the legal relationship between the plaintiffs and the defendant as contractual, however, they had mistakenly denied satisfaction due to the fact that the plaintiffs had incorrectly indicated the rules of law that settled the disputed legal relationship.

The court’s disagreement with the legal basis for the contentious legal relationship cited in the statement of claim is not a ground for denying the claim, as according to the principle of jura novit curia ("the court knows the law"), the incorrect legal qualification by the plaintiff and the defendants of the legal relationship in dispute does not relieve the court from the obligation to apply the appropriate prescriptions of legal provisions to resolve the dispute.

The court, having ascertained during the consideration of the case that a party or another participant in the proceedings for the purpose of substantiating their claims or objections referred to those provisions of law that do not actually regulate the disputed legal relationship, independently exercises their correct legal qualification and applies to the decision-making those provisions of substantive and procedural law the subject of regulation of which is the corresponding legal relationship.

The SC Grand Chamber cancelled the decisions of the previous instances in respect of resolving the claims of the plaintiffs who had filed the cassation complaints, and remitted the case for new consideration to the court of first instance.

The Resolution of the Grand Chamber of the Supreme Court of June 8, 2021, in case No. 662/397/15-ц (proceedings No. 14-20цс21) – https://reyestr.court.gov.ua/Review/97967336.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - lpd.court.gov.ua/login.