Countervailing in the economic process: methods of application and cancellation

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Ланткевич Кирило

Lawyer

Ukraine / Dnepropetrovsk region

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Publication date: 25.07.2024

I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.

Mutual support in the economic process

Countervailing security is a tool to balance the parties in litigation, especially when the court applies security measures. The main idea is to protect the interests of the party that becomes the subject of such measures, providing compensation for possible losses that it may suffer as a result of these measures. Counter-security is aimed at reducing these risks for the party that suffered losses as a result of the use of security measures. This may include damages, legal fees or other costs related to the case.

Important aspects of the application of compression support:

Countervailing security is a procedure used by the court to protect the interests of the parties in the litigation, especially when security measures are applied. This usually involves depositing funds into the court's escrow account in a specified amount. Below is a detailed description of the counter collateral procedure by item:

• Ordering protective measures: The court may order protective measures at the request of one of the parties to the litigation. These measures may include a ban on the disposal of property, a ban on certain actions or other measures aimed at ensuring the execution of a court decision or ensuring the interests of the parties in the case.
• Determining the amount of counter-security: The court determines the amount of counter-security that the party suffering losses as a result of the application of the measures may demand from the other party. This amount is assigned taking into account potential losses and costs that may arise as a result of the application of security measures.
• Depositing funds into the court's deposit account: The party in whose favor security measures are ordered must deposit the specified amount into the court's deposit account. This is to ensure that funds are available to compensate the aggrieved party in the event that a court later determines that the injunctive relief was improperly or improperly applied.
• Payment of counter-security: If the court decides that security measures were unlawful or improperly applied, funds from the escrow account may be paid to the party who suffered losses as a result of such measures.
• Procedure for execution of the court decision: The execution of the decision on counter-security is carried out in accordance with the procedures established by law, which regulate the payment of funds and the return of the deposit.

Alternative forms of collateral:

Counter-security can be provided in other ways, if the plaintiff does not have the opportunity to deposit the corresponding amount into the court's deposit account. Here are two possible methods that can be used:

• Provision of a bank guarantee, surety or other financial security: The claimant can apply to a bank or other financial institution to obtain a guarantee for the amount determined by the court. This means that the bank or other institution undertakes to pay the specified amount to the court in case of need. The court may also require the consent of the person providing such a guarantee in order to verify his financial capacity and reliability.
• Taking other actions determined by the court to eliminate potential losses and risks of the defendant: The court can determine specific actions that the defendant must take to reduce possible losses or other risks associated with securing the claim. For example, this may include an obligation on the defendant to stop certain actions or take measures to preserve property or other assets.

These alternative methods of counter-security allow to ensure the execution of the court process and protect the interests of the parties, even in cases where the plaintiff cannot make a contribution to the court's escrow account due to objective reasons.

Procedural features of counter-security:

The procedure for applying counter-security is regulated by procedural legislation. Here is a breakdown of that process:

1. Motion for counter-security: If a motion for counter-security is filed after the court has already taken measures to secure the claim, the court must decide on the matter within ten days after receiving such motion.
2. Resolution on counter-security: The court adopts a resolution on counter-security of the claim, which establishes the amount and form of such security. This decision is a court decision on this issue.
3. Sending a copy of the decision: A copy of the decision on counter-security is sent to the participants of the case no later than the next day after its adoption. This ensures that the parties are informed about the resolution of the issue of counter-security and the established procedure for its implementation.

Therefore, the counter-security procedure is an important part of the judicial process, which allows to ensure a fair resolution of legal disputes and protection of the interests of the parties.

Cancellation of counter security:

According to Article 142 of the Code of Civil Procedure of Ukraine, counter-security may be canceled in certain circumstances. Here are the grounds for cancellation of counter-security:

• Abandonment of the claim without consideration: Countervailing security can be canceled if the claim was left without consideration on the grounds specified in Clause 7 of Part 1 of Article 226 of the Code of Civil Procedure of Ukraine. This ground provides for situations when the claim is considered groundless or inadmissible for consideration by the court.
• Closing of the case proceedings: Countervailing security may also be canceled if the case proceedings were closed on the grounds specified in clauses 2, 5–7 of part 1 of article 231 of the Civil Procedure Code of Ukraine. These grounds may include, for example, lack of grounds for continuing the case, agreement of the parties, etc.
• Settlement of the claim in full: The counter-security is also canceled after the court decision on the settlement of the claim in full becomes effective. This means that if the court has decided all the issues raised in the lawsuit and ruled in favor of the plaintiff, then counter-security is no longer required to enforce the court's decision.

In all these cases, the court resolves the issue of cancellation of counter-security in accordance with the requirements of the procedural legislation, noting it in the relevant court rulings or decisions.

Lawyer services in the economic process:

In the economic process, the lawyer plays a key role, ensuring the protection of the client's interests and performing a number of important functions. This is how a lawyer can provide assistance in the economic process:

• Legal analysis of the situation and legal services: The lawyer services online provides a legal analysis of the case, explains the legal aspects of the case to the client, evaluates the strengths and weaknesses of the case, as well as possible risks and ways to resolve the dispute.
• Assistance of a lawyer in the preparation of documents: The lawyers online prepares all the necessary documents for submission to the court or other competent authorities. This may include pleadings, pleadings, appeals, contracts and other legal documents.
• Court proceedings: A lawyer represents the client's interests in court hearings and other procedural actions. He acts as a legal representative, protecting the rights and interests of the client during the discussion of the case before the court.
• Documentary monitoring: The lawyer conducts documentary monitoring of the progress of the case, including monitoring the deadlines for submitting documents, receiving answers from the court and other parties, as well as keeping appropriate legal records.
• Services of a lawyer in negotiations and mediation: A online assistance of a lawyer can negotiate with other parties in order to reach an amicable settlement of the dispute or participate in the mediation process to find a compromise and avoid a lengthy court process.
• Expert evaluations and testimony: If necessary, the types of legal services may engage experts to provide testimony or expert opinions that assist the court in considering technical or specialized issues.
• Support of the executive process: After the court decision is issued, the lawyer can assist in the executive process, ensuring the execution of court decisions and protection of the client's interests in interaction with the executive authorities.

Thus, the lawyer in the business process is an important partner for the client, providing not only legal expertise, but also strategic guidance in all stages of the legal process. The cost of legal services will depend on the complexity and duration of the process and on many other factors.