Article 157. Invalid Transactions and the Consequences of Their

Invalidity

1. When the requirements are violated which are applicable to the form, or contents of a transaction and to the participants of a transaction, and also to the freedom of their will expression, the transaction may be recognised as invalid in accordance with an action of the interested parties, a duly authorised state body or the procurator.

2. The bases of invalidity of a transaction and also the list of persons who have the right to demand the recognition thereof as invalid, shall be established by this Code or any other legislative acts.

3. When a transaction is recognised as invalid, each party shall be obliged to return to the to the other party everything that was received in the transaction, and where it is not possible to return it in kind, to return its value in money.

4. When a transaction is aimed at the achievement of a criminal purpose, then, where the intention exists on the part of both parties, everything received by them in the transaction or intended to be received, upon the decision or sentence of the court shall be subject to confiscation. In the case of the execution of such a transaction by one party, everything which is received by it and everything which is due from it in the transaction to the first party shall be subject to confiscation. Where none of the parties proceeded to the implementation, everything which is envisaged by the transaction for its implementation shall be subject to confiscation.

5. Where the intention to achieve a criminal purpose exists only with one of the parties, everything that is received by it in the transaction shall be subject to return to the other party, and what is received by the latter or due to it in accordance with the transaction, shall be subject to confiscation.

6. Subject to specific circumstances, the court shall have the right not to apply partially or in full the consequences which are stipulated in paragraph 4 and 5 of this Article, as concerning the confiscation of the assets received or subject to receipt through invalid transactions. In that regard the consequences shall arise which are stipulated in paragraph 3 of this Article.

7. Aside from the consequences stipulated in paragraphs 3 - 6 of this Article, the court may exact for the benefit of the other party the losses incurred by the latter, which are associated with the recognition of a transaction as invalid from the party which is guilty of commission of the acts which cause the invalidity of the transaction.

8. An invalid transaction shall not entail any legal consequences, except for those which are associated with its invalidity, and it shall be invalid from the moment of its commitment.

9. In recognising a transaction as invalid, the court shall have the right to take into account the specific circumstances, and restrict itself at the prohibition of its further execution.

Article 158. Invalidity of a Transaction the Contents Whereof Do Not Comply with the Requirements of Legislation

1. A transaction, the contents of which do not comply with the requirements of legislation, and which is entered into for a purpose which is deliberately opposite to the fundamentals of the law and order or morals, shall be invalid.

2. A person who deliberately concluded a transaction which violates the requirements of legislation, the charter of a legal entity or the authority of its bodies, shall not have the right to claim the recognition of the transaction as invalid, provided such a claim is caused by financial interest or the intention to evade responsibility.

3. In the event that one of the participants of a transaction entered into it with an intent to evade from the execution of the obligation or from the duty to a third person or the state, and the other participant of the transaction new or should have known of that intention, an interested party (the state) shall have the right to claim to recognise the transaction as invalid.