Assignments.

a. Assignments of Contracts and Rights Thereunder.

The Russian law does not expressly address “assignment of a contract” as such, but instead regulates assignment of individual elements of the contract such as rights and obligations of the parties. Assignment of rights under a contract is called “assignment of claim”, while the assignment of obligations is called “assignment of debt” (Art. 382 - 392 of the RF Civil Code).

The creditor (the “assignor”) may assign his economic rights to another person (the “assignee”), unless such assignment contradicts the law or the contract (Art. 382 and 388 of the RF Civil Code). In particular, the rights which are closely related with the personality of the creditor (such as alimony rights or rights for compensation of personal injury) may not be assigned (Art. 383 of the RF Civil Code). Assignment of personal (moral) rights generally is not allowed.

The consent of the debtor for the assignment of claim is not required, unless otherwise provided by the law or contract. For example, an assignment of claim under an obligation, in which the personality of a creditor is of a real significance for a debtor, requires debtor’s consent (Art. 388 of the RF Civil Code).

A debtor must be notified in writing on the assignment. If such notification has not been made, the performance of the obligation to the initial creditor shall be deemed as the performance to a proper creditor (Art. 382 of the RF Civil Code). A debtor is also entitled to not perform the obligation to a new creditor until he receives a proof that the assignment took place (Art. 385 of the RF Civil Code of the RF).

An assignor (cedent) must provide an assignee (cessionary) with the documents, which certify the assigned right, as well as with the information, which is material for practical use of such right (Art. 385 of the RF Civil Code).

The right of a creditor is assigned in the scope and under the conditions, which existed at the moment of the assignment, unless otherwise provided by the law or contract. In particular, the rights securing fulfillment of the obligation and other rights linked to the claim (such as the right to claim unpaid interest) also pass upon new creditor (Art. 384 of the RF Civil Code).

Generally, an assignor is liable before an assignee in case of the invalidity of the assigned claim. However, if the right is assigned gratuitously (i.e. as a gift) the assignor does not carry such responsibility (Art. 576 (3) of the RF Civil Code).

Another exception is the contract for financing under assignment of monetary claim or factoring (Art. 824-833 of the RF Civil Code) which may provide that the client of the finance agent is not liable for validity of the assigned claim. However, an assignor is not liable for non-fulfillment of the assigned claim by a debtor, unless he has undertaken a surety for the latter (Art. 390 of the RF Civil Code). The debtor may raise the same defenses against the new creditor, which he could have raised against the initial creditor at the time when he received notification on the assignment (Art. 386 of the RF Civil Code).

An assignment of claim must be made in the form required for the transaction (contract) under which the assigned right has originated (Art. 389 of the RF Civil Code). Depending on the nature of the assignment (gratuitous or commercial), the assignment deal itself is governed by the relevant rules applicable to the contract of sale or gift.

The creditor’s rights can also pass to another person by operation of law. Such statutory assignment of claim can take place, in particular, in the following cases: (i) in case of the universal legal succession (such as the inheritance or the reorganization of a company); (ii) following the court’s decision; (iii) as the result of fulfillment of debtor’s obligation by his surety or by the pledgor, who is not the debtor thereunder; (iv) in case of subrogation to the insurer of creditor’s rights against the debtor who is liable for the insured event (Art. 387 of the RF Civil Code).

b. Assignment of Debts.

A debtor may assign his debt to another person only with the creditor’s consent (Art. 391 of the RF Civil Code).

The new debtor may invoke against the creditor’s claim defenses based on the relationships between the creditor and initial debtor (Art. 392 of the RF Civil Code). Assignment of debts must be made in the same form as that required for the underlying contract (Art. 392 of the RF Civil Code). See also item 7 (a) above.