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Shared construction participant didn’t receive her apartment in time and demanded a penalty to be collected from the tenant builder. First two instances agreed with her demand but reduced amount of lawsuit claims by six times. The Supreme Court had to decide if it was possible to reduce penalty and to penalize the tenant builder. The SC explained mistakes of previous two lower courts and ordered a retrial. 

General jurisdiction courts, unlike courts of arbitration, have much more cases of unreasonable penalty reductions, says Konstantin Savin, lawyer of Pavlova&Partners law firm. The SC often has to settle arising disputes itself. Such situation happened in case of Elena Chupilkina, who signed the Agreement of participation in shared construction with “Centr-Aktiv” Ltd. in December 2012. Building of one-bedroom apartment on 4^th storey was supposed to be finished on 9^th August 2013 - that commissioning time was specified in the agreement. Tenant builder was obligated to transfer apartment to the participant before 9^th October 2013. But he violated the deadline: act of acceptance was signed two months later than it was supposed to be. The shared construction participant decided to file a lawsuit and to collect from tenant builder a penalty in the amount of 292 000 rub., with compensation for moral harm in the amount of 30 000 rub., and with additional penalty for non-satisfaction of consumer’s demands voluntarily - 50% of amount awarded in favor of consumer. “Consumer rights protection” of Krasnodar regional public organization stood for Elena Chupilkina.

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