Ensuring Breached Obligations: Admissibility of a Theoretical Design

The paper analyzes the admissibility of securing an obligation after its violation. Drawing on the judicial practice of the higher courts, it demonstrates that Russian law‑enforcement practice permits the conclusion of interim transactions after non‑performance or improper performance of the principal obligation, treating such transactions as means of ensuring performance. The author criticizes this approach, advancing an understanding of security as a mechanism for creating additional guarantees of the creditor’s proprietary interest against a prospective failure of the debtor to perform. It is argued that the security relationship is of a staged nature: its establishment must precede any breach of the principal obligation, although its operation may be triggered only upon such a breach. Under this conception, the breach functions as a condition of law (conditio iuris) within the dynamics of the security relationship. The absence of the initial stage transforms the arrangement that the parties characterize as collateral into other legal forms — primarily intercessional constructs (such as accession to the debt or cumulative acceptance of the obligation) or into a liability (guarantee) agreement. The paper distinguishes collateral from assumption of another’s debt by reference to the consequences for subrogation, accessory obligations and bankruptcy proceedings. It concludes that the existing legal positions of the highest court require adjustment and that the criteria for qualification should be clarified.

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