Comment to Article 157. Invalid transactions and consequences of invalidity of the Civil Code of the Republic of Kazakhstan
The commented article names the general basis for the invalidity of transactions and defines the consequences of invalidity.
The grounds for the invalidity of transactions are determined in a more complete and specific way by Articles 158 - 159 of the Civil Code and other legislative acts, for example, Article 28 of the Decree on Oil, Article 8 of the Decree on a state Enterprise, etc.
This article, unlike the norms of the Model Civil Code and the Civil Code of the Russian Federation, does not divide invalid transactions into void and disputed ones, since this division is of practical importance only for determining who has the right to demand recognition of the transaction as invalid - the participant in the transaction, another interested individual or an authorized state body. And this is specifically stated in the articles defining the specific grounds for invalidity.
Sometimes, on the contrary, from the text of the article it is possible to identify those who do not have the right to demand recognition of the transaction as invalid.
The general consequence of invalidating a transaction is the so-called bilateral restitution, that is, the return of the parties who concluded the invalid transaction to their original position, to the "before the transaction" position.
If a transaction is declared invalid before it is executed, it simply should not be executed. If execution has begun or the transaction has been executed in full, each party returns to the other party what it received under the transaction. The inability to return can be compensated with money.
It is not uncommon for only one party to be guilty of invalidating a transaction. For example, a deal is concluded under the influence of deception. The deceived participant was innocent of the nullity. Under these conditions, the guilty party can be charged not only what he received in the transaction, but also the losses incurred by the innocent party as a result of the transaction and its invalidation.
The invalidity of the transaction is retroactive, that is, it is valid from the moment of its conclusion. Thus, the invalidity of a transaction differs from its termination or termination, in which, until the moment of termination (termination), everything that is done under the transaction is recognized as legitimate.
Only by way of exception, the court has the right, as stated in paragraph 9 of the commented article, to limit itself to prohibiting the execution of a transaction that has been declared invalid for the future.
Unlike the Civil Code, the Model Civil Code and the Civil Code of the Russian Federation, in addition to bilateral restitution, establish as consequences of invalidity not only bilateral, but also unilateral restitution (property is returned only to one party, the other receives nothing, and the property transferred under its transactions is transferred to state revenue) or the prevention of restitution (everything that was transferred or should have been transferred through transactions by both parties, converted into state revenue).
The Civil Code does not provide for such a general division of consequences, but allows it as an exception, however, with one prerequisite: the orientation of the transaction to a criminal purpose - the purchase and sale of drugs, a contract for stealing someone else's car, etc.
Criminality of intent can only be established by a criminal court, satisfying a civil claim in a criminal case, or by applying the rules on confiscation of property. Under these conditions, the court has the right to move away from bilateral restitution as a consequence of an invalid transaction and recover the property that was the subject of the transaction to the state's income. At the same time, the participant in the transaction is not necessarily subject to criminal punishment (amnesty, suspended sentence, etc. may be applied).
As a rule, the decision to invalidate the transaction is retroactive and makes the actions of the parties illegitimate from the moment the transaction begins.
But there may, of course, be cases where the return of everything received under a transaction that was later invalidated is impossible or impractical. For example, decisions to invalidate a lease for which the tenant has already used the property cannot be retroactive. Therefore, the commented article allows for the invalidity of the transaction for the future.
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The commentary was prepared within the framework of the scientific and practical research program of the Scientific Research Center of Private Law of the Kazakh State Law University.
Head of the working group on the preparation of the draft Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor Suleimenov M.K.
Deputy head Professor Basin Yu.G.
