The Judicial and Legal Reform Strategy 2019-2023 envisages a number of changes in the field of bankruptcy, including amendments to the Law on Bankruptcy. It is also planned to review the requirements for the Bankruptcy Administrators and their appointment procedure.
Iravaban.net talked about the topic to Bankruptcy Administrator Sona Avagyan.
– Ms Avagyan, the strategy states that it is necessary to develop and implement professional training programs for Administrators and to organize the training of candidates before passing the qualification. To what extent is this necessary, will it increase the professional skills of Administrators?
– Of course, organizing professional training programs for Administrators again and again cannot be a wrong decision, but the question is how effective these programs will be and how close they will be to the Administrator to solve real, practical problems related to his activity, because theoretical knowledge can be studied and mastered very well, but not effective in practice. If we are talking about increasing the effectiveness of professional skills, we must take into account the skills acquired during professional experience, which are formed only over time.
– Today, the remuneration of administrators is very different due to the number of cases. To solve this problem, it is also proposed to review the system of appointment of bankruptcy administrators and introduce a new software for the selection of administrators, which should take into account a number of factors in selecting an administrator, such as for example, the complexity of the work, the professional skills and the professional area. Do you think the introduction of such software will contribute to a right, perhaps fairer distribution of bankruptcy cases among administrators?
– As for the creation of a new software program for the selection of Administrators, I think it will be a great solution to many problems, in particular, the correct distribution of the cases you mentioned, according to the skills and complexity of the Administrator, because in any case, there are bankruptcy cases that require a lot of experience and practical knowledge, and it would be better to entrust it to more experienced Administrators, but I do not think it will completely solve the problem of differences in Administrators’ salaries, because the difference in Administrators’ salaries is not only due to the number of cases.
In this case, it is appropriate to say “quantity is not quality yet”. The amount of the Administrator’s salary depends on the content of each case, which can range from the minimum salary defined by law to eight digit numbers.
When it comes to remuneration, one should not forget that bankruptcy Administrators are, in any case, sole proprietors, and the amount of remuneration of sole proprietors varies depending on a number of circumstances. I do not think that the difference in the remuneration of Administrators is a problem, as it has its objective reasons, including the experience of the Administrator, the degree of workload, the personal involvement of the Administrator in bankruptcy cases, and so on. But in any case, the introduction of such a program will be a big boost in the field of bankruptcy in connection with the above issues.
– The Strategy proposes to make changes in the Constitutional Law “Judicial Code of the Republic of Armenia”, increasing the number of judges of the bankruptcy court. In your opinion, will this contribute to the reduction of the examination time of the cases? How often are court hearings with your participation scheduled?
– Bankruptcy cases at my disposal are heard by bankruptcy judges in accordance with the deadlines set by law, and hearings are scheduled as soon as possible, without significant delays or postponements. Personally, I do not see the need to increase the number of bankruptcy judges, especially since the number of bankruptcy judges has recently increased, and, frankly, I do not think that this will significantly reduce the time for considering cases, as well as every action on bankruptcy case, the proceedings have their clear execution, appeal, the period of approval determined by law, and a shorter period than that for each action, cannot be determined.
– The Strategy states that the introduction of an electronic bankruptcy system and the implementation of electronic document circulation will also have a positive impact on increasing the efficiency of the bankruptcy court. What possible problems or difficulties can you mentioned in the practice of this settlement?
– Of course, the introduction of an electronic system will greatly improve bankruptcy proceedings. It will be easier to carry out a number of actions with the bankruptcy court, including paperwork, bankruptcy cases will become more organized and systematic, besides, a lot of time will be saved, which is rather long in the absence of an electronic system, why not also post, travel and other expenses will be reduced. It would be a great investment in the field of bankruptcy .
And one of the possible problems is whether the system will serve as an additional tool to facilitate bankruptcy proceedings or as a mandatory condition set by law. I think one of the difficulties may be the fact who can access the system and use that electronic system, only the administrators, the court staff, as well as the third parties involved in the bankruptcy case or the auction bidders, and in the case of the latter, how possible it will be to organize correctly and safely. It may also be difficult for older people to use the system. In that case, it will be necessary to organize appropriate courses.
– Ms Avagyan, within this framework, it is also envisaged to develop a draft Bankruptcy Code, which stipulates that, for example, it is necessary to reduce the terms of bankruptcy proceedings. How do you imagine this? In practice, how much is it possible to reduce that period and what are the ways to reduce the period and the expected result to achieve?
– As I have already mentioned, any action to be taken by an Administrator or a judge in bankruptcy proceedings has a clear time limit for its execution, approval, appeal by the law, such as the deadline for submitting a financial recovery plan, the deadline for convening the first meeting, the deadline for entering into force. And it is not possible to set a time limit or shorter time for each action. To set a shorter term means to violate the rights of the persons involved in the case, who have the opportunity to take any action within that period, but are deprived of that right, for some reason. I am convinced that the deadlines set in bankruptcy proceedings are optimal and do not need to be reduced. In addition, during the time, circumstances that are relevant to the case may arise in the proceedings that significantly affect the entire further course of the bankruptcy proceedings or change the main vector of the bankruptcy case, which would not have occurred if the case had been completed during a possibly short timeframe. So, I think “good result” first of all means the absolute completion of the case and not violating the interests of persons participating in the case and not completing the case as soon as possible.
– How would you assess the level of public awareness about the bankruptcy system? If the level of awareness is low, then what steps should be taken in that direction?
– Honestly, I would rate it quite low. And I am convinced that this is not only a matter of bankruptcy, but also of the level of public awareness from a general legal point of view, which should be linked to both the low standard of living of the people and the low quality of the state education system. In other words, this is a general problem of non-recognition by society of its own rights and obligations, this is a problem of ignorance of the laws and those arising from this. To look at this only as a matter of poor awareness of the population about the bankruptcy system, it seems to me, is self-deception. Can you demand to play music to a person who does not even know the notes, of course not? Raising public awareness of laws and their rights is a state-level issue related to many issues unrelated to the bankruptcy system.
– What problem do you see in the sphere that may are not included in the judicial reform strategy, but you consider it a priority?
– In the area of bankruptcy, as in other areas, there are, of course, gaps, one of the most important of which is the introduction and application of the Bankruptcy Code in parallel with the Law on Bankruptcy. This will make bankruptcy proceedings more transparent and credible and improve the bankruptcy sector. I cannot mention other issues related to bankruptcy, I just wish that the field will improve, the public will be better aware of their rights and responsibilities and the level of state education will increase.
