Disputes with banks

What is happening

The bank suspended transactions and asked for explanations of certain payments. The company replied, but the bank still refused the transactions and closed the account, and the company was then placed in the high-risk group, which caused problems with other banks.

The loan was serviced without arrears, but the bank cited a covenant breach: turnover through the accounts had dropped or a shareholder had changed. A demand for early repayment of the whole debt followed.

A beneficiary made a demand under a bank guarantee and the bank refused, pointing to a discrepancy in the documents. Or the reverse: the company is the principal and considers the beneficiary's demand to be in bad faith.

What the law says

• Relations with a bank are governed by Chapters 42, 45 and 46 of the Civil Code on loans and credit, bank accounts and payments, and by the bank's contracts and tariffs.
• Refusals and account closures on anti-money-laundering grounds rest on the law on combating the legalisation (laundering) of criminal proceeds and the financing of terrorism; the bank's decision can be challenged by documenting the economic rationale of the transactions.
• Companies placed in the high-risk group can apply for rehabilitation to the interdepartmental commission at the Bank of Russia, and its decision can be appealed in court.
• A bank guarantee is independent of the underlying obligation: the guarantor checks whether the demand complies with the terms of the guarantee, not whether the beneficiary's complaints are justified on the merits (Civil Code).
• Early repayment may be demanded in the cases provided by the Civil Code and the contract; courts interpret covenant clauses by their literal wording and the parties' conduct.
• Transactions with foreign counterparties are also checked under Federal Law No. 173-FZ of 10 December 2003 "On Currency Regulation and Currency Control": as a currency control agent the bank may request supporting documents.

What we do

• We analyse the contracts, tariffs, requests and decisions of the bank and establish what it is actually relying on.
• We prepare replies to the bank's requests and a document pack showing the economic rationale of the transactions.
• We support the application to the interdepartmental commission at the Bank of Russia and any subsequent court challenge.
• We negotiate restructuring and contest unjustified demands for early repayment.
• We challenge unlawful debits, fees and penalties charged under the bank's tariffs.
• We act for beneficiaries or principals in bank guarantee disputes, including guarantees issued for public procurement.
• We protect the interests of pledgors and sureties when enforcement is levied.

What we will need from you

• Your contracts with the bank: account, loan, pledge, surety and guarantee agreements, and the tariffs in force at the time.
• The bank's requests, notices, refusals and termination decisions.
• Documents on the disputed transactions: contracts with counterparties, invoices, certificates, proof of performance.
• Evidence of the company's genuine activity: tax paid, staff, office, warehouses.
• The history of correspondence and communications with the bank.