Commentary to article 353. Responsibility for the misuse of other people's money of the Civil Code of the Republic of Kazakhstan  

The commented article establishes responsibility for the fact that one debtor under a monetary obligation returns a certain amount of money to another creditor in violation of the due date. The misuse of other people's money is understood as an obvious opportunity (not necessarily realized) for the debtor to use the money in circulation, lend it to another person, or otherwise extract income from it.

Based on this understanding of responsibility, which is established by the commented article, it should be considered that it should not be applied in cases where the debtor was deprived of the opportunity to use other people's money (seizure of property, initiation of liquidation proceedings in bankruptcy (Article 55 of the Civil Code and in other similar cases).

The article provides for liability for the misuse of other people's money. Lawful use (with the permission of the creditor or with the lawful establishment of a deferred payment) does not give grounds for holding the debtor accountable.

In our opinion, the same should include cases when the debtor does not know and should not know that he is using other people's money. For example, the heir legally disposes of the money inherited, not knowing that there is another heir - according to the will, or not knowing about the debts of the testator. Liability can occur only from the day when the debtor becomes aware of the claims of other persons for the sums of money held by him or the debtor.

Other people's money should be understood not only as money transferred to the debtor by another person and not returned in a timely manner, but also as amounts that the debtor did not receive from the creditor, but should pay him as remuneration for the work performed, penalties, damages, etc., but did not pay.

If a penalty (penalty fee) has been established for late repayment of a debt or for another late payment, then it should be accrued only on the amount of the principal debt and on remuneration (interest).

The penalty for using other people's money must be accrued from the day the money is refunded to the day of the actual payment. The day before which the penalty is calculated and collected should not be confused with the day on which the discount rate of interest is determined.

Since the official refinancing rate itself can change, the commented article indicates on which day it is determined: the day of filing a claim, the day of the decision, or the day of the actual payment. The choice is made by the court, which, of course, can take into account the proposals of the parties. But then this rate chosen by the court is applied throughout the entire debt period until it is fully repaid.  

The penalty for the misuse of other people's money is subject to recovery in the amount provided for in the commented article, only on condition that the refund must be made in the currency of the Republic of Kazakhstan. Within the meaning of the law, the introduction of this penalty is aimed at protecting the interests of the creditor, which may suffer as a result of fluctuations in the tenge exchange rate between the day when the debt was due to be repaid and the day the money was actually returned to the creditor. In the case when monetary debt must be repaid in a foreign currency, subject to compliance with the legislation on currency regulation, the amount of the penalty can be determined according to generally accepted remuneration rates for using a bank loan in a foreign currency at the location of the creditor or in a certain region (for example, LIBOR).

 Constitution Law Code Standard Decree Order Decision Resolution Lawyer Almaty Lawyer Legal service Legal advice Civil Criminal Administrative cases Disputes Defense Arbitration Law Company Kazakhstan Law Firm Court Cases 

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.