Civil bankruptcy cases

             Bankruptcy is the debtor's insolvency recognized by a court decision, which is the basis for its liquidation.

             In accordance with Article 4 of the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy" (hereinafter referred to as the Law), bankruptcy is established voluntarily on the basis of a debtor's application to the court or forcibly on the basis of an application to the court of creditors or other persons authorized by this Law.

The basis for the debtor's application to the court for declaring him bankrupt is his insolvency in the absence of the possibility of restoring solvency.

At the same time, in accordance with paragraph 2 of Article 11 of the Law, the debtor is obliged to apply to the court for declaring him bankrupt in the following cases::

- when the owner of his property, the body authorized by him, or the body of a legal entity authorized to do so by the constituent documents, decides to liquidate it, and the value of the property is insufficient to satisfy creditors' claims in full.;

- if the satisfaction of the claims of one creditor or several creditors leads to the impossibility of fulfilling their monetary obligations in full to other creditors;

- within six months, apply to the court for declaring him bankrupt from the moment when the debtor learned or should have learned about the onset of insolvency.

The basis for the creditor's application to the court for declaring the debtor bankrupt is the debtor's insolvency. The conditions for the debtor's insolvency are specified in part 1 of Article 5 of the Law.

Jurisdiction of cases on declaring a debtor bankrupt.

According to part 2 of Article 3 of the Law and Article 313 of the CPC RK, bankruptcy cases of individual entrepreneurs and legal entities are considered by the court according to the general rules of civil procedure, with the specifics established by the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy.

Bankruptcy proceedings are initiated in court on the basis of an application from the debtor, the creditor (creditors), if there are grounds provided for in article 5 of the Law, the prosecutor in cases provided for in Article 47 of the Law, and the rehabilitation manager in cases provided for in article 82 of the Law.

The state revenue authority and other authorized state body with respect to taxes and other mandatory payments to the budget, as well as natural and legal persons who are creditors for civil and other obligations, have the right to file a creditor's application to the court for declaring the debtor bankrupt.

Bankruptcy proceedings are considered initiated from the moment the court issues a ruling on the acceptance of an application for declaring the debtor bankrupt.

At the same time, the application submitted by the debtor, the rehabilitation manager for bankruptcy cannot be withdrawn without an appropriate court decision.

The applications of the creditor (creditors), except in cases of filing an application on the grounds provided for in article 82 of the Law (Termination of the rehabilitation procedure), may not be withdrawn by them before making a decision to declare the debtor bankrupt.

In accordance with Article 44 of the Law, a bankruptcy case may be initiated on the basis of a creditor's (creditors') application for civil and other obligations.

In our opinion, based on the meaning of art. 44 of the Law (bankruptcy proceedings may be initiated at the request of both a legal entity and an individual), part 2 of Article 3 of the Law (bankruptcy cases are considered by the court according to the general rules of civil procedure with the specifics established by this law), Article 313 of the CPC (bankruptcy cases of individual entrepreneurs and legal entities are considered by the court according to the general rules of civil procedure). according to the rules stipulated by this Code, and taking into account the specifics established by the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy), bankruptcy cases, due to their specificity, should be considered by specialized inter-district economic courts.

In accordance with the provisions of the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy", a bankruptcy application for a legal entity can be filed by both the debtor and the creditor.

According to article 41 of the Law, the debtor's application is submitted to the court in writing, signed by the head of the debtor, a legal entity, or a person replacing him, in accordance with the constituent documents, and must contain the name of the court to which the application is submitted; justification for the inability to satisfy the creditors' claim; information about his property, including property encumbered by collateral, in property lease (lease) and (or) leasing, about money in bank accounts, account numbers and location of banks, a list of debtors indicating their location and the amount of their debt; information about obligations, term which have not been fulfilled; information on the relation of the activity to the sphere of natural monopoly or that the debtor is a market entity occupying a dominant (monopoly) position in the commodity market; a list of attached documents.

At the same time as submitting the application to the court, the debtor is obliged to send copies of the application and the documents attached to it to the authorized body.

In case of non-compliance of the debtor's application for declaring him bankrupt with the above requirements, it is subject to refund.

In accordance with Article 44 of the Law, the creditor's (creditors') application must specify the name of the court to which the application is being submitted; last name, first name, patronymic (if any), place of residence of the debtor, an individual entrepreneur, or the name and location of the debtor, a legal entity; last name, first name, patronymic (if any), the place of residence of the creditor, an individual, or the name and location of the creditor, a legal entity; the debtor's obligation to the creditor (creditors) from which his claim arose, the term of performance of this obligation; the nature and amount of the creditor's (creditors') claims against the debtor; the amount of debt under the obligation and accrued remuneration (interest), penalties (fines, penalties) and losses to be recovered from the debtor; the creditor's legal claims; information known to the creditor about the debtor's existing property; information that the debtor is absent, when submitting an application for declaring an absent debtor bankrupt; a list of attached documents; evidence of claims against the debtor; other information, if it is necessary for the consideration of the bankruptcy case.

At the same time as submitting the application to the court, the creditor (creditors) is obliged to send copies of the application and the documents attached to it to the debtor or the authorized body.

A creditor's (creditors') application that does not comply with the requirements provided for in paragraphs 2 and 3 of Article 44 of the Law, as well as submitted without the necessary documents, is returned by the court without consideration.

The return of applications for declaring the debtor bankrupt indicates that the applications were mostly returned due to their non-compliance with the requirements of articles 41 and 44 of the Law.

So, by the definition of the specialized interdistrict economic court of the mountains.Ust-Kamenogorsk dated 27.10.2014 The application of the State Institution "Tax Administration for the City of Semey of the Tax Department of the East Kazakhstan Region of the Tax Committee of the Ministry of Finance of the Republic of Kazakhstan" on declaring bankrupt individual entrepreneur Murat Kakimov was lawfully and reasonably returned due to the fact that the application did not include information confirming the debtor's insolvency.

By the definition of the specialized interdistrict economic court of the Mangystau region dated 20.10.2014. the application of the debtor of KANA Company LLP for declaring him bankrupt has been returned.

The following violations served as the basis for the return of the application: according to the requirements of paragraph 1 of Article 42 of the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy", documents confirming the existence of debt, as well as the debtor's inability to satisfy creditors' claims, are attached to the debtor's application for declaring him bankrupt.

According to subparagraph 2 of paragraph 2 of the above article, financial statements for the last three years and at the time of filing the application, tax reports on all obligations of the debtor for the specified period, a list of all creditors and debtors (taxpayer registration number, individual identification number or business identification number, full name, legal address) are attached to the debtor's application for bankruptcy indicating the amounts and the date of formation of the corresponding debt.

In accordance with sub-paragraphs 6) and 7) of Article 1 of the Law, bankruptcy is recognized as the insolvency of a debtor recognized by a court decision, which is the basis for its liquidation. Bankruptcy procedure is a procedure carried out in order to satisfy creditors' claims at the expense of the bankrupt's estate in accordance with the procedure established by the laws of the Republic of Kazakhstan. Bankruptcy proceedings are initiated in court on the basis of an application from the debtor, creditor (creditors), if there are grounds provided for in article 5 of the Law, and are considered initiated from the moment the court issues a ruling on the acceptance of an application for declaring the debtor bankrupt.

At the same time, the Law attaches certain importance to the form and content of the application, since, in accordance with Article 43 of the Law, applying to a court for bankruptcy that does not comply with the requirements of articles 41 and 42 is the basis for returning the application without consideration.

We believe that the judicial practice is correct, according to which, if the creditor's (creditors') application does not comply with the requirements provided for in paragraphs 2 and 3 of Article 44 of the Law, as well as submitted without the necessary documents, it is subject to unconditional return.

Upon receiving the application for declaring the debtor bankrupt, the court, no later than five working days after receipt of the application, issues a ruling on the initiation of proceedings, copies of which are sent to the debtor, the applicant, the authorized body, the state and other bodies registering property rights, the regional chamber of private bailiffs and the territorial judicial authority at the location of the debtor.

While preparing the case for trial, the court sends copies of this ruling to the authorized body, the debtor, creditors, the prosecutor and other persons involved in the case.

The ruling on the initiation of a case must contain the obligation of state and other bodies that register property rights to impose restrictions provided for in paragraph 1 of Article 50 of the Law.

So, by the definition of the specialized interdistrict economic court of the mountains. On September 04, 2014, the court accepted the application of JSC "National Center "Kurylyconsulting" for declaring JSC "Astana-Real Estate" bankrupt and a civil case was initiated against it.

The ruling issued by the court does not comply with the requirements of Article 48 of the Law, as it does not specify the obligation of state and other bodies that register property rights to impose restrictions provided for in paragraph 1 of Article 50 of the Law.

When considering bankruptcy cases, courts should carefully check whether the debtor is really insolvent, the conditions of which are specified in article 5 of the Law.

In accordance with paragraph 3 of Article 4 of the Law, in the cases established by this Law, the debtor is obliged to apply to the court for declaring him bankrupt.

According to paragraph 2 of Article 5 of the Law, the basis for the debtor's application to the court for declaring him bankrupt is his insolvency in the absence of the possibility of restoring solvency.

The grounds prescribing to the debtor the obligation to file an application for declaring him bankrupt are specified in part 2 of Article 11 of the Law "On Rehabilitation and Bankruptcy".

The form and content of the debtor's application for declaring him bankrupt are specified in article 41 of the Law, the documents attached to it are specified in Article 42.

The debtor's application to the court for declaring him bankrupt, which does not comply with the requirements provided for in articles 41 and 42 of the Law, is the basis for his return without consideration.

In the case when applying to the court for declaring him bankrupt is mandatory for the debtor and the necessary documents are not attached to the application, such an application is accepted by the court for production, and the missing documents are claimed by the court in order to prepare the case for trial.

The announcements on the initiation of proceedings on declaring the debtor bankrupt and the procedure for creditors to file claims in Kazakh and Russian languages on the Internet resource of the authorized body have been published.

Since the debtor's insolvency and insolvency have been established, the court has made a lawful and reasonable decision to declare KSK Kupol bankrupt.

According to Article 47 of the Law, the prosecutor applies to the court for declaring the debtor bankrupt when he finds signs of deliberate bankruptcy, in the interests of the creditor – the Republic of Kazakhstan, government agencies.

In this case, the prosecutor's application is submitted to the court in compliance with the requirements provided for by this Law in respect of the creditor, unless otherwise provided for by legislative acts of the Republic of Kazakhstan or follows from the substance of the legal relationship.

This provision is consistent with the provision of part 3 of Article 55 of the CPC that the prosecutor has the right to file a claim with the court, a statement on the protection of the rights, freedoms and legitimate interests of citizens, the rights and legitimate interests of organizations, public or state interests.

In accordance with subparagraph 6) of Part 1 of Article 55 of the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy", having considered a rehabilitation or bankruptcy case at a court hearing, the court may issue a ruling on termination of proceedings in accordance with the requirements of the legislation on civil proceedings of the Republic of Kazakhstan, taking into account the specifics provided for by this Law.

The grounds for termination of proceedings in the case, including bankruptcy, are established by Article 247 of the CPC.

55 of the Law, having considered a bankruptcy case at a court hearing, the court may adopt one of the following judicial acts: a decision to declare the debtor bankrupt and liquidate it with the initiation of bankruptcy proceedings; a decision to declare the debtor bankrupt and liquidate it without initiating bankruptcy proceedings; a decision to refuse to declare the debtor bankrupt.

The decision to declare the debtor bankrupt at the request of the creditor or the prosecutor and its liquidation with the initiation of bankruptcy proceedings is made taking into account the conclusion of the interim manager on the debtor's insolvency and the existence of grounds for declaring him bankrupt, as well as in the case of failure to provide the interim manager with access to accounting documents, which prevented the preparation of an opinion.

The content of bankruptcy court decisions is determined by articles 56-58 of the Law. In addition, the bankruptcy court's decision must comply with the requirements of Articles 217-221 of the CPC, as well as the requirements of the Regulatory Decree of the Supreme Court of the Republic of Kazakhstan No. 5 dated July 11, 2003 "On the court decision".

In accordance with Article 85 of the Law, participants in the bankruptcy procedure are the court considering the bankruptcy case, the authorized body, the bankrupt, the owner of the bankrupt's property, the participants (founders), the creditor, the temporary and bankrupt manager, and other interested persons.

By virtue of the above, the persons involved in the case of declaring the debtor bankrupt must necessarily be and participate in the court session of the applicant, the authorized body, the person against whom the bankruptcy claim is filed, and the interim administrator.

In violation of these requirements, the court considered the case without the participation of the person against whom the bankruptcy claim was filed and the interim manager.

The issue of the jurisdiction of civil cases on declaring a debtor bankrupt should be resolved in accordance with the provision of article 44 of the Law, according to which bankruptcy proceedings can be initiated at the request of both a legal entity and an individual, while proceeding from the meaning of part 2 of Article 3 of the Law (bankruptcy cases are considered by the court according to the general rules of civil procedure with special features established by this law), Article 313 of the CPC (bankruptcy cases of individual entrepreneurs and legal entities are considered by the court according to the general rules, provided for by this Code, with the specifics established by the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy)

In order for the court to objectively and comprehensively examine the issue of the debtor's insolvency, the bankruptcy case should be considered with the mandatory participation of the authorized body, the insolvent debtor, the owner of the bankrupt's property, the creditor and the temporary manager.

The court's decision to declare an insolvent debtor bankrupt must comply with the requirements of Articles 55-58 of the Law "On Rehabilitation and Bankruptcy", Articles 217-221 of the CPC, and the Regulatory Decree of the Supreme Court of the Republic of Kazakhstan No. 5 dated July 11, 2003 "On Judicial Decision".

Legislation applicable to the consideration of civil bankruptcy cases.

The legislation of the Republic of Kazakhstan on bankruptcy is based on the Constitution of the Republic of Kazakhstan and consists of the Civil Code of the Republic of Kazakhstan, the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy" dated March 07, 2014 No. 176 – V SAM, Regulatory Decree of the Supreme Court of the Republic of Kazakhstan No. 3 dated April 28, 2000. (as amended and supplemented by regulatory rulings of the Supreme Court of the Republic of Kazakhstan No. 14 dated June 28, 2002 and No. 11 dated December 22, 2008) "On certain issues of application of Bankruptcy legislation by Courts of the Republic of Kazakhstan", the Law of the Republic of Kazakhstan "On Private Entrepreneurship", other laws and regulatory legal acts establishing the specifics of application bankruptcy procedures in respect of individual business entities.

If an international treaty ratified by the Republic of Kazakhstan establishes rules other than those provided for by the Law of the Republic of Kazakhstan "On Rehabilitation and Bankruptcy", the rules of the international treaty shall apply. The Law "On Rehabilitation and Bankruptcy" applies to cases of accelerated rehabilitation and rehabilitation of legal entities, bankruptcy of individual entrepreneurs and legal entities, except for state-owned enterprises and institutions, accumulative pension funds, banks, insurance (reinsurance) organizations. If a court decides to declare a bank, insurance (reinsurance) organization, or accumulative pension fund bankrupt, their liquidation is carried out in accordance with the banking legislation of the Republic of Kazakhstan, the legislation of the Republic of Kazakhstan on insurance and insurance activities, as well as pension provision. The specifics of the bankruptcy procedure in relation to cotton processing organizations, grain receiving enterprises, as well as natural monopoly entities or market entities occupying a dominant or monopolistic position in the relevant commodity market may be established by the legislation of the Republic of Kazakhstan. This law applies to the bankruptcy of individual entrepreneurs in the part not regulated by the legislation of the Republic of Kazakhstan on private entrepreneurship.

 

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