Does Changing the Type and Name of a Bank Affect the Validity of an Assignment Agreement: Court Decision

The Khmelnytskyi City District Court of Khmelnytskyi region considered a case filed against a bank, companies, and notaries regarding the invalidation of assignment agreements, a purchase and sale agreement of claim rights, and an apartment sale agreement. Based on the review, the court concluded there were no grounds to satisfy the claim and dismissed it. This was reported by the court.

Claim on Invalidity of Agreements and the Court's Position

The plaintiff filed a lawsuit against the Bank, companies, and notaries seeking to invalidate the purchase and sale agreements of claim rights and the purchase and sale agreement of a three-room apartment, arguing that the assignment (purchase and sale) agreement of claim rights was concluded by an improper party. Additionally, the apartment sold under the purchase and sale agreement was subject to a mortgage securing obligations under the Loan.

As a result of the case review, the court concluded that the plaintiff's claims were erroneous and not based on the current legislation of Ukraine, considering that since 2011 amendments to the Law of Ukraine "On Joint Stock Companies" came into force, requiring closed joint stock companies (CJSC) and open joint stock companies (OJSC) to align their company types with legal norms and global standards. Now, a joint stock company may exist as either a private joint stock company (PrJSC) or a public joint stock company (PJSC).

According to the Law of Ukraine "On Joint Stock Companies," effective from April 30, 2009, No. 514-VI, paragraph 5 of section XVII "Final and Transitional Provisions" requires joint stock companies to bring their charters and internal regulations in line with this law, i.e., to change their company type to either a public or private joint stock company.

Thus, the Bank changed its name from JSC to PJSC.

Accordingly, the Open Joint Stock Company "Commercial Bank" is the legal successor of the Public Joint Stock Company "Commercial Bank."

The plaintiff failed to prove in court or provide evidence of any violation of the plaintiff's rights by concluding the assignment (purchase and sale) agreement of claim rights between the Open Joint Stock Company "Commercial Bank" and the LLC under the mortgage agreement.

The court concluded that the plaintiff's claims regarding the invalidity of the assignment (purchase and sale) agreement of claim rights are based solely on the plaintiff's subjective position and are not reflected in the current legislation.

Why the Court Rejected Arguments Regarding Property Valuation

Another basis cited by the plaintiff for invalidating the real estate purchase and sale agreement was disagreement with the property valuation results conducted by a valuation entity. The court considers these claims to be purely subjective disagreement with the objective circumstances of the case.

Considering the above, the court finds that the plaintiff's reference to disagreement with the property valuation was not confirmed during the case review and cannot be taken into account by the court as it is merely an assumption, in the court's opinion.

The court believes that the property valuation was conducted in accordance with the requirements of the current legislation regulating property valuation, and therefore there are no grounds to consider that the valuation was conducted in violation of the laws of Ukraine.

Under these circumstances, given the above and the absence of grounds to declare the assignment (purchase and sale) agreement of claim rights invalid, as well as the lack of evidence indicating violation of the latter's rights, the court concluded that the claim is unfounded and denied its satisfaction.

An appeal may be filed against the court's decision (case No. 686/26106/21).

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