Denis Frolov, Partner and Head of Litigation and Arbitration Practice, BMS Law Firm, believes that this is a vital decision for the practice of law, since here they look at how terminating an assignment agreeement affects the chain of further transactions.

“The Supreme Court specifies that terminating the first agreement in the chain of assignement transactions affects parties to such agreement and shall not impact the rights of third parties, including further assignees. An exception to this rule is where further assignees act in bad faith, for instance, conspire with the first assignee. Courts must establish that such third parties act in bad faith, otherwise there will be no grounds for a judgment which may affect their rights”, the expert explained. Denis Frolov added that this is a common mistake, because courts frequently resolve such disputes incorrectly, say, by issuing judgments which affect the rights of further assignees without having any proof of their acting in bad faith.