The Supreme Court of Ukraine: the creditor has no right to recover both a penalty and fine in loan agreements

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January 2011
On October 21, 2015 the Supreme Court of Ukraine issued Ruling on case №6-2003tss15. The court at the above-mentioned Ruling formulated a new legal position in regard to recovery both penalty and fine in case of violation of loan agreement. The Court noticed that civil responsibility consists in negative consequences for offender. Negative consequences for the debtor might be changing unperformed current obligations by new one or setting of the additional obligations to unperformed current obligations. Additional obligations are type of civil responsibility as a penalty (fine). The Supreme Court of Ukraine also noted that according to Article 61 of Constitution of Ukraine the person shall not be held to legal responsibility twice for the same offense. Taking into consideration mentioned above the Supreme Court of Ukraine had concluded as follows. According to Article 549 of Civil Code of Ukraine fine and penalty are types of civil responsibility. That is why no one shall be brought twice to legal responsibility for the same offence because it will be violation of Article 61 of Constitution of Ukraine. Thus, in case of a delay of monetary obligation under the loan agreement, the creditor cannot impose to debtor both penalty and fine.