Mikheeva I.E., Ostapenko I.А. The Interest Rate under the Credit Agreement in the Light of Judicial Practice

DOI: https://doi.org/10.15688/lc.jvolsu.2017.3.15

Irina E. Mikheeva, Candidate of Juridical Sciences, Associate Professor, Deputy Head of the Department of Banking Law, O.E. Kutafin Moscow State Law University (MSLA), Sadovaya-Kudrinskaya St., 9, 125993 Moscow, Russian Federation, This email address is being protected from spambots. You need JavaScript enabled to view it.

Igor A. Ostapenko, Postgraduate Student, Department of Civil and International Private Law, Volgograd State University, the Base Department of the Southern Scientific Center of the Russian Academy of Sciences, Prosp. Universitetsky, 100, 400062 Volgograd, Russian Federation, This email address is being protected from spambots. You need JavaScript enabled to view it.

Introduction: the condition of the interest rate on the credit is material to the credit agreement. The civil legislation does not stipulate the requirements to the maximum interest rate under the credit agreement, which leads to the disputes in practice. The aim of the study is the legal precedents of applying the Russian legislation on interest under the credit agreement and changing the interest rate both by agreement of the Parties and unilaterally.
Methods: the methodological framework for this study is a set of scientific methods, among which the main place is occupied by the method of analysis and the comparative law method. Results: grounded in the work the author’s point of view is based on the legislation and judicial practice. The author concludes that the condition on the interest rate may be invalidated by the court if the interest rate is significantly different from the market conditions because of the disadvantageousness of such a condition.
The legal nature of the raised interest depends on what ground the interest rate was raised, which can serve as a liability or a new fee for the credit under certain conditions.
Conclusions: the law provides for the right of a credit institution to unilaterally raise the interest rate in cases stipulated in the contract, however, the newly established interest rate should be consistent with the principles of good faith and reasonableness; in addition, the bank has to prove the grounds for which it considers the possibility of the unilateral change of the interest rate.

Key words: interest rate, change of interest rate, credit institutions, borrowers, disadvantageousness, market conditions.

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