After being granted a loan against real estate – an apartment building – a borrower failed to repay the bank in time and had the mortgage agreement invalidated at trial and appellate courts in order to avoid paying back altogether.

The bank continued its efforts to renew the agreement and successfully appealed the earlier verdict at the highest level. However, by the time the mortgage was restored, the property already had other owners who bought it without extra baggage.

Charged with devising a litigation strategy for the client, ILF lawyers Olena Petrova, Anna Zhebeleva, Boris Zamikula and Andrey Poddymai under guidance of associate partner Alexey Kharitonov initiated debt collection for 123 apartments, which were owned by natural persons at that time. Despite unclear legal practice on alienating mortgaged property, the lawyers managed to prove at three levels of jurisdiction as well as the Supreme Court of Ukraine that the mortgage was valid when apartments were being purchased.

As a result, ILF changed the position of courts on similar cases, thus creating a new legal precedent. On the client’s behalf, ILF initiated debt collection from 123 apartments through auction, making sure that the bank will get its money back.