Sunday, March 7, 2010

Unilateral Interest Rate Increase Found Illegal

Russia's Supreme Arbitrazh (Economic) Court found illegal the provisions of a loan agreement allowing a bank to unilaterally increase the interest rate on the loan. The decision applies to agreements concluded under previous legislation; recently the interest increase prohibition was enacted in legislation. More controversially, the Court also struck down loan agreements providing for dispute resolution in a court at the bank's location and setting penalties for payment delays.

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