On July 2, 2013, the dispute over the interpretation of norms of the Law on Mandatory State Insurance of Military Men regarding the determination of the insured persons and obligation to pay to persons discharged from military service was finalized in the Supreme Arbitration Court of the Russian Federation. The Ministry of Defense of the Russian Federation claimed damages in the amount of 138.9 million rubles due to failure to comply with the contract with Voenno-strakhovaya kompaniya (VSK). The third person supporting the defense department was ROSGOSSTRAKH, whose interests were represented in court by Pervaya Yuridicheskaya Set.

According to the law, military men and related persons must be insured for the period of service, and are considered insured within a year after dismissal. Since the introduction of this type of compulsory insurance and until 2008, Voenno-strakhovaya kompaniya has been the insurer of military men. In 2009, the Ministry of Defense chose ROSGOSSTRAKH.

VSK denied the insurance payments to persons who were dismissed from military service in 2008, but got disability in 2009, within a year after they were dismissed. The reason for refusal was that, in the opinion of VSK, the insured events with these persons occurred beyond the term of their contract.

ROSGOSSTRAH in its turn had no reason to pay these individuals, since they were not insured by it. In order to make payments due to citizens, in June 2009, the Ministry of Defense signed an additional agreement to the state contract with ROSGOSSTRAKH. Based on this agreement, ROSGOSSTRAH instead of VSK paid out 138.9 million rubles to 554 people. The military department decided to claim this money from the previous insurer in a judicial procedure.

The case A40-102871/2009 was repeatedly heard by arbitration courts. Upon reconsideration, courts of three instances rejected the claim, and therefore ROSGOSSTRAKH and the Ministry of Defense applied to the Supreme Arbitration Court of the Russian Federation with applications for review of judicial acts in the order of supervision.

The court with supervisory authority decided that the courts lacked legal certainty in interpreting the provisions of the law on compulsory insurance of life and health of military men, and the case was referred to the Presidium for consideration.

The closed session of Presidium of the Supreme Arbitration Court, was attended by representatives of all three parties. The judge-rapporteur Nadezhda Ksenofontova reported a number of issues that triggered the judicial acts issued in this case. After the speeches of the representatives and the session of the Presidium, the resolutive part of judgment was announced, according to which the judicial acts of all three instances were abolished, and 138.9 million rubles were recovered from VSK in favor of the Russian Ministry of Defense.

Alexey Petrin, Director of Litigation Department of Rosgosstrakh: “We fully agree with the decision of the Supreme Arbitration Court of the Russian Federation and consider it lawful and justified. While supporting the position of the defense department, we insisted that VSK was liable to make payments to the dismissed in 2008. Jointly with Pervaya Yuridicheskaya Set legal company, which successfully represented our interests in court, we managed to choose the right strategy and protect the interests of military men. It is very important that this dispute, which is of great importance for the entire insurance market, was completed by the adoption of such a decision.”

Vitaly Ponomarenko, partner of Pervaya Yuridicheskaya Set, CJSC: “From the very beginning of the dispute, a principled position of ROSGOSSTRAKH was that the insurer who insured the end of the service of the dismissed, and not the disability, was liable to make payments to them. System interpretation of the law is unequivocal, but it was necessary to reach the highest arbitration instance to obtain recognition of seemingly obvious things. Even now we can say that in the text of the resolution of the Supreme Arbitration Court of the Russian Federation on this case, there will be principled approaches to this type of compulsory state insurance.”