The Grand Chamber of the Supreme Court Expressed its Opinion as for the Double Collection of Debts While Protecting the Violated Creditor’s Right

Pursuant to the Civil Code of Ukraine and the Law of Ukraine of 5 June 2003 No. 898-IV “On Mortgage”, the availability of judgment on  collection of the debt from the debtor under the credit agreement shall not be the ground  for termination of the debtor’s monetary obligation and for termination of mortgage. Creditor shall not be deprived of the right to satisfy demands under the main obligation by means of levying an attachment upon mortgaged property as provided for by law. This legitimate mechanism of protecting violated creditor’s right is not a double debt collection.

The Public joint-stock company Bank Forum in accordance with provisions of agreements and legislative rules used the right of early fulfillment of main obligation, since neither borrowers under credit agreements, nor mortgagor under mortgage agreement fulfilled loan commitments. The bank applied to the mortgagor with a claim to levy attachment upon the property if available judgments on collection of the debts under the credit agreements in favor of the creditor.

In view of lack of evidence of fulfillment by debtors of their commitments under the credit agreements, availability of judgments on debt collection spread over due to the impossibility of their immediate fulfillment, the opinions of lower instance courts on the absence of reasons to satisfy the claim of the Public joint-stock company Bank Forum – the mortgage holder – on levying an attachment upon the mortgage, are incorrect and were decided without taking into account factual circumstances of the case and provisions of existing laws.

Having incorrectly applied Article 33 of the Law of Ukraine “On Mortgage” as of  non-fulfillment or undue fulfillment of main obligation by the debtor, the lower instance courts did not take into account the fact that the claimant had not applied to the court in this case to  demand collection of this very amount of debt from the respondent – mortgagor; but to ensure fulfillment of main obligation by means of levying an attachement upon the mortgage.

Follow the link http://www.reyestr.court.gov.ua/Review/77720890 to see the full text of the Resolution of the Grand Chamber of the Supreme Court of 18 September 2018 in the case No. 921/107/15-г/16 (proceeding No. 12-117гс18).