1 option: it is impossible to terminate and modify a contract retroactively.
This is the opinion of some courts, which still apply the old version of the Civil Code, when it was possible to terminate/modify a conversation only for a future time.
Option 2: it is possible to terminate or change the contract retroactively, but only if the contract was concluded after the amendments to the Civil Code.
The courts following this principle refuse to apply the new rules in case the contract was concluded before 24.07.2023 (the date of entry into force of the amendments to the Civil Code). The courts argue their position by saying that the amending law to the Civil Code does not apply to relations that arose before its enactment, but this position of the courts is also erroneous, since the amending law, which enshrined in the Civil Code the possibility to terminate and amend contracts retroactively through the court, expressly states its retroactive effect.
Option 3: to terminate and amend a contract through the court retroactively is permissible regardless of the date of its conclusion«.
Even if the date of conclusion is earlier than 07/24/2023, this does not prevent the contract from being terminated or its terms changed retroactively. However, in order for a court to rescind or modify a contract, several conditions must be met.
Check that there are grounds for judicial termination or change of conditions. As an example — substantially changed circumstances (Article 451 of the Civil Code). Foreign companies no longer supply some technical components for the collection of equipment, therefore, the Russian manufacturer has removed this equipment from production, as a result of which the supplier of the same equipment can not fulfill its obligations to its customers. In connection with the non-delivery, the buyer sent a claim for early termination and return of prepayment. In view of this, the court satisfied one of the two claims: it recovered the debt and refused the termination. Such a requirement confirms that the party has lost interest in the performance, the courts believe.
- Resolution of the Central District Court of 21.03.2023 № A14-21436/2021
- Decree of the Central District Court of 05.04.2023 № A14-16558/2021
- Decision of the AO of the Central District Court of 22.01.2024 № A45-1942/2023
Determine the date of termination or modification of the contract.
The default date is when the grounds for termination arise. For example, the leased property became unusable. For example, on February 14, there was a fire in the premises occupied by the tenant. After the fire, the premises were sealed, light and water were cut off. The tenant could no longer use it and demanded that the contract be terminated. Three years after the beginning of the proceedings, the court ruled: the contract was terminated retroactively — from February 14, when the premises burned down. Accordingly, from that moment on, the obligation to pay was no longer required.
- Clause 4 Art. 620 Civil Code
- The Decree of the Central District Court of 21.12.2023 № A14-7978/2020.
Make reference in the claim to the law that amended the Civil Code and include its details in the requesting part.
Although this step is not mandatory, we advise you not to limit yourself to referring to Article 453(3) of the Civil Code. In this way it is possible to reduce the risk that the court will ignore the new rule. Although previously the Civil Code did not provide for the possibility to terminate a contract or change its terms retroactively and most courts refused to consider otherwise, there have been opposite decisions. Court practice: in May 2023 — before the amendments to the Civil Code — the court amended the contract and stated that they were applicable from April 2021. The appeal agreed. Cassation also supported this, and referred to the new norm. However, there is a nuance: the landlord formulated the claim in such a way that the clause to be amended provided for an increase in the payment from an earlier date rather than from the date when the judgment entered into force. On the defendant’s objections that the old norm was still in force when the dispute was considered in the first instance, the district court explained: «as of the date of consideration of the case by the court of appellate instance, the new wording of paragraph 3 of Article 453 of the Civil Code was in force».