Russia

II. Invalidity of Transactions

Article 168. Invalidity of Transaction Not Conforming to Law or Other Legal Acts

A transaction not conforming to a law or other legal acts shall be null unless the law establishes that such a transaction is contestable or provides for other consequences for the violation.

Article 169. Invalidity of Transaction Concluded for Purpose Contrary to Fundamentals of Law Order and Morality

A transaction concluded for a purpose known to be contrary to the fundamentals of law order or morality shall be null and void.

If both parties have been involved in such a transaction and the transaction has been performed by both parties, everything received by them under the transaction shall be recovered to the revenue of the Russian Federation, and if the transaction has been performed by one party, everything received by the other party and everything due from it to the first party in compensation for that received shall be recovered to the revenue of the Russian Federation.

If only one party to such a transaction has intent, everything received by it under the transaction shall be returned to the other party, and everything received by the latter or due to it in compensation for that performed shall be recovered to the revenue of the Russian Federation.

Article 170. Invalidity of Fictitious and Sham Transactions

1. A fictitious transaction, i.e. a transaction concluded only proforma, without the intention to create relevant legal consequences, shall be null.

2. A sham transaction, i.e. a transaction concluded for the purpose of covering up another transaction, shall be null. To the transaction which the parties actually had in view, taking into account the character of the transaction, shall apply the rules relevant thereto.

Article 173. Invalidity of Transaction of Legal Person Exceeding Limits of Its Legal Capacity

A transaction concluded by a legal person contrary to the purposes of activity expressly limited in its constituent documents, or by a legal person not having a license to engage in the respective activity, may be deemed by a court to be invalid upon the suit of this legal person, its founder (partner), the State agency effectuating control or supervision over the activity of the legal person if it is proved that the other party to the transaction knew or knowingly should have been aware of the illegality thereof.

Article 449. The Consequences of Violation of the Rules for Holding the Sale

1. The sale, held with the violation of the rules, laid down by the law, may be recognized by the court as invalid upon the claim of the interested persons.

2. The recognizing of the bidding to be invalid shall entail the invalidity of the contract, concluded with the person, who has won it.