The change in legal relations with a public or municipal authorities regulated by budget legislation and grant agreements

Fedulkin Denis Pavlovich Postgraduate Student, Department of Municipal Law, Peoples' Friendship University of Russia named after Patrice Lumumba 117198, Russia, Moscow, Miklukho-Maklaya str., 6 1142220431@pfur.ru Romanova Ekaterina Petrovna Deputy Head of Department, Directorate of State Scientific and Technical Programs 125009, Russia, Moscow, Tverskaya str., 11 offline.tersest0u@icloud.com

Tezin Il'ya Vladimirovich Deputy Director General, Scientific Consulting Corporation MetaSynthesis 107076, Russia, Moscow, Matrosskaya Tishina str., 23/7c1 tezin@msynt.ru

Introduction

The data of the consolidated budget list (hereinafter referred to as the SBR) of mid–2022 show that significant amounts of budget expenditures fall not only on public procurement, but also on financing legal relations based on budget legislation. For example, in 2022, according to preliminary estimates, 1,925 trillion rubles are accounted for only by the 400th code of the type of expenditure (enlarged, public procurement), and by the 600th code (subsidies to budgetary, autonomous institutions and other non-profit organizations) - 1,986 trillion rubles. At the same time, at the turn of 2022-2024, the indicators under consideration have a counter dynamic: public procurement costs are decreasing, and the volume of these subsidies is slightly increasing. It should also be noted that the total amount of subsidies provided for in the budget is not exhausted by code 600, but it is not possible to allocate other subsidies (for example, under code 460 - for capital investments, etc.) in the money supply of the RBU. Thus, the estimates of budget expenditures that cause the emergence of legal relations based on budget legislation are minimal.

A significant amount of budget financing through the conclusion of agreements on the provision of subsidies (grants) indicates the high importance of regulating these legal relations, as well as the need to study such regulation and its enforcement. Moreover, the emphasis on agreements on the provision of subsidies (grants) is also made in the landmark new instruments of scientific and technological development of Russia ^[7].

However, unlike public procurement, for which there is special sectoral legislation that defines in detail the set of rights and obligations of participants in transactions, as well as a wide range of documents of various kinds covering certain aspects of the exercise of such rights and obligations, for legal relations arising from agreements on the provision of subsidies from the federal budget and grants in the form of subsidies from the federal budget the budget (hereinafter referred to as legal relations and agreements, respectively) does not provide any serious regulatory framework defining the relationship of their subjects beyond the processes of the budget system (beyond the functional role of the relevant allocations). Beyond the scope of the subject of the study, it should be noted that there are various positions regarding the qualification of such legal relations as budgetary legal relations. For example, in resolution No. F10-5973/17 dated 02/06/2018, the Arbitration Court of the Central District notes: "... the legal relationship between the body providing the subsidy and the person applying for the subsidy (manufacturer of goods, works, services), despite the fact that they are more regulated by the norms of the Budget Code, are not budgetary legal relations".

Moreover, there is still a persistent dichotomy in discussions about the qualification of legal relations. Disputes concerning their qualifications have persisted for at least 15 years in both law enforcement and science. In support of this, it is noteworthy the statement associated with Professor S.V. Zapolsky ^[6] and widely replicated in various works to this day ^{[1, 2]}, which boils down to the fact that "the features of financial law, its matter are such that they do not accept alien ways of legal relations. The fact that two or more entities, following an imperative prescription, fix their relationship with a bilateral act does not yet turn this act into a contract, even if it is named as such by the parties. Most likely, the concept of a financial and legal contract needs a clear and precise justification and differentiation from the concept of civil law."

The doctrine does not solve the problem of regulation or at least methodological support. So, in particular, some authors ^[5] propose to include in the agreements even the criteria of selection, according to the results of which they are concluded. It is difficult to imagine a situation in which this can be justified, since the criteria are applied in the selection process that precedes the conclusion of the agreement and ends with the agreement, and for the purposes of legal relations arising from the agreements, such criteria do not have any significance.

The authors, who are faced with the implementation of agreements firsthand, mainly focus on mono-sectoral aspects, in relation to which uncertainty persists to this day. Among others, works concerning the realization of intellectual rights arising in such civil or quasi-civil relations deserve special attention ^[3].

This article does not pretend to fill in all the gaps that arise in legal relations. In addition, a subsidy or grant in the form of a subsidy in the article refers to funds, the source of which is the corresponding budget of the budgetary system of the Russian Federation. Consequently, the rules and approaches related to legal relations arising from grant agreements to which scientific foundations, development institutes or foreign persons are parties may differ from those discussed in the article. Within the framework of the article, one of their key aspects, according to the authors of the article, is analyzed from a practical point of view – changing agreements. First of all, those agreements that are concluded in pursuance of federal, regional or municipal regulatory legal acts regulating the provision of subsidies (including grants in the form of subsidies), mainly based on the results of selections conducted by state authorities (local governments). The Budget Code of the Russian Federation, which defines the very basis for the emergence of legal relations, but not their essence, sets a wide framework for their implementation, but does not regulate them directly. The applied nature of this article is achieved through a systematic and comprehensive description of the problem of changing agreements and specific judicial practice, acts of inspection bodies, as well as information and conclusions based on the practical experience of the authors. In this regard, the team of authors invites other specialists and experts specializing in legal relations to discuss this aspect in order to expand the industry methodological base.

The emergence of legal relations. "Rules of the Rules"

The key regulatory legal act (hereinafter referred to as the NPA), well–known to specialists involved in the design of rules for the provision of subsidies or grants, are the General requirements for regulatory legal acts, municipal legal acts regulating the provision of subsidies, including grants in the form of subsidies, to legal entities, individual entrepreneurs, as well as individuals - producers of goods, works, services (hereinafter referred to as general requirements) approved by Decree of the Government of the Russian Federation dated 09/18/2020 No. 1492 "On General Requirements for Regulatory Legal Acts, Municipal Legal Acts Regulating the Provision of Subsidies, including Grants in the form of Subsidies, to legal entities, individual entrepreneurs, as well as individuals - producers of Goods, works, services, and on the invalidation of certain acts of the Government of the Russian Federation and certain provisions of certain acts of the Government of the Russian Federation" (hereinafter referred to as the RF PP).

The task of the general requirements follows most obviously from their name. Among other things, the general requirements define the conditions to be included in the NPA as conditions to be included already in the agreements. It is impossible not to note the resourcefulness of the authors-developers of the general requirements and their initiator – the Ministry of Finance of the Russian Federation. Being a body interested in ensuring financial discipline, the Ministry of Finance of the Russian Federation thus indirectly determines not only the methodological framework, but also affects the legal relations that arise without its participation between the administrator of budgetary funds and the recipient of a subsidy or grant. After all, managers of federal budget funds should not allow situations in which:

• there are no conditions in the NPA to be included in the NPA as conditions to be included in the agreements;
• The concluded agreements do not contain the conditions included in the NPA as conditions to be included in the agreements.

When studying the general requirements, attentive lawyers and financiers who have not previously encountered the legal relations under consideration will make other interesting discoveries for themselves. For example, there are fundamental differences in the terms "recipients of subsidies" and "recipients of budgetary funds".

In terms of the conditions to be included in the agreement, in subparagraphs "i", "k" and "l" of paragraph 5 of the general requirements, it is prescribed to provide, in particular:

• the terms and procedure for concluding an additional agreement (including an additional agreement on termination of the agreement);
• the requirement to include in the agreement, in case of reduction, to the chief administrator as the recipient of budgetary funds, the conditions for agreeing on new conditions or for terminating the agreement if agreement on new conditions is not reached;
• the requirement to conclude agreements in accordance with standard forms established by the Ministry of Finance of the Russian Federation.

The absence in subparagraph "i" of paragraph 5 of the general requirements of the grounds for concluding an additional agreement to the agreement, as well as the definition in subparagraph "k" of the case when the conclusion of such an additional agreement is mandatory (reaching agreement on the new terms of the agreement) leads an ordinary specialist (especially a civil lawyer, "spoiled" by freedom of contract and its limits) to the logical thought that making changes to the agreements is not prohibited, and therefore permissible. There are no other restrictions or requirements for changing the agreement, in the context of this article, in the general requirements.

"Assembly instructions". Order of the Ministry of Finance of the Russian Federation No. 199n dated 11/30/2021

The next-level document, both in legal force and applicability, is the order of the Ministry of Finance of the Russian Federation dated 11/30/2021 No. 199n "On approval of the Standard Form of an agreement (agreement) on the provision of subsidies from the federal budget, including grants in the form of subsidies, to legal entities, individual entrepreneurs, as well as individuals", which approved the standard form agreements (agreements) on the provision of subsidies from the federal budget, including grants in the form of subsidies, to legal entities, individual entrepreneurs, as well as individuals (hereinafter referred to as the standard form). Since the absolute majority of agreements are formed directly in the state integrated information system "Electronic Budget" (by analogy with the service "Contract Designer" of the ConsultantPlus legal reference system), the non-use of a standard form for registration of legal relations for the provision of a subsidy (grant) is practically excluded.

As for the conditions affecting the issues of changing agreements, paragraph 4.2 of the standard form provides for the right of the budget administrator to make a decision on changing the terms of the agreement in accordance with paragraph 7.3 of the agreement, including on the basis of information and proposals sent by the recipient in accordance with paragraph 4.4.1 of the agreement, including changing the amount of the subsidy.

Further, paragraph 4.4 of the standard form provides for the right of the recipient to send proposals to the administrator of budgetary funds on amendments to the agreement in accordance with paragraph 7.3 of the agreement, including if it is necessary to change the amount of the subsidy with the attachment of information containing the financial and economic justification for this change.

In turn, paragraph 7.3 of the standard form indicates that the amendment of the agreement is carried out by agreement of the parties and is formalized in the form of an additional agreement.

It should be noted that the permissible cases or grounds for changing the agreement in the current version of the standard form are not limited in any way. Earlier, before the entry into force of Order No. 199n (until 01.01.2023), the order of the Ministry of Finance of the Russian Federation dated 12/21/2018 No. 280n "On Approval of standard forms of agreements (contracts) on the provision of grants from the Federal Budget in the form of subsidies in accordance with paragraph 7 of Article 78 and paragraph 4 of Article 78.1 of the Budget Code of the Russian Federation" (and others orders aimed at different forms of organizations). The standard form of the agreement provided for by Order No. 280n contained seemingly insignificant but fundamental differences from the current one and often made even the very possibility of discussing amendments to the agreement meaningless.

The way these conditions were formulated earlier, in practice, led to the fact that:

- during the development of the draft agreement based on the previous standard form, disputes arose about the admissibility of expanding the list of cases of amendment of the agreement, if the relevant cases were not predetermined in the relevant NPA;

- the failure to introduce any reason for the amendment to the previous paragraph 7.3.1 made it impossible to amend the agreement if such a reason arose, even if the change was permissible in civil law transactions due to the relevant circumstances.

Possible cases of unilaterally changing the agreement are defined in paragraph 7.4 of the standard form: they exhaustively relate to making changes to the consolidated budget list, which led to a change in the budget classification codes, according to which the subsidy is provided, as well as changes in the details of the budget administrator.

The totality of the individual provisions of these normative legal acts considered allows us to formulate the following first conclusions:

- the initiator of the amendment of the agreement can be both the recipient of the subsidy and the manager of budget funds (and not only in conditions of reduction of the budget funds);

- both the general rules and the standard form provide (starting from 2023) unlimited powers to amend the agreement (by agreement of the parties).

Non-judicial practice

The information provided in this section of the article is based on the long-term practical experience of the authors of the article in supporting and evaluating the implementation of projects under agreements, primarily projects of scientific, technical and technological orientation.

During the implementation of projects under agreements, there is a regular need to change their parameters established in the agreements, due to the impossibility or inexpediency of implementing projects in compliance with the previous parameters. The probability of a subsidy recipient needing such changes over a one-year period can be estimated at least 50%. The reason, as a rule, is a change in the circumstances of the project implementation - external or internal.

An actual example of the former is the currently developing campaign to introduce restrictive measures by foreign states and organizations, which has had a negative impact on almost all scientific, technical and technological projects, at least in the form of difficulties with the procurement of imported equipment and materials (or the impossibility of such purchases). Internal circumstances include the receipt of unplanned and (or) negative results within the framework of the project, which necessitate changing the work plan or the possibility of optimizing it (in particular, excluding irrelevant work). Another common reason for changes in project parameters, which has a subjective genesis, is the need to eliminate errors and contradictions that are not caused by changed circumstances, but generated by incorrect initial definition (planning) of project parameters: the cost of individual works, their deadlines, the need for consumables and the amount of expenses for the corresponding article, etc.

Most often, recipients of subsidies are offered to change the terms of an agreement of two types:

• changing the financial parameters of the project, primarily the allocation of subsidy costs by expenditure items;
• changes in the composition, content and cost of individual works (activities) to be performed (implemented) within the framework of the project.

Despite the high prevalence of these changes, the vast majority of relevant agreements (concluded by various managers of funds) do not explicitly contain relevant grounds for making changes.

At the same time, the standard form provides that the subsidy is provided for financial support of costs, the source of financial support for which is a subsidy, in accordance with the list of costs, which is an annex to the agreement and determines the distribution of costs of subsidy funds by indicators (articles): salary payments to staff, purchase of works and services, etc. During the execution of the agreement, it becomes obvious that in practice it is impossible to ensure the absolute accuracy of the costs planned at the stage of applying for participation in the selection (or at the stage of concluding an agreement), at least due to inflation or planning errors.

The condition that the recipient of the subsidy performs work in accordance with the plan (schedule) established by the agreement, as a rule, is included in the agreement and has the status of the purpose of providing the subsidy, which is quite reasonable, since the target nature of the expenditure of the grant (subsidy) is determined primarily by their compliance with the work plan.

Thus, both types of changes cause a change in the conditions that qualify as the goals and (or) the procedure and (or) the conditions for granting a subsidy. In accordance with paragraph 4.1.10 of the standard form, if the administrator of funds establishes that the recipient of the subsidy has violated the procedure and conditions for granting the subsidy, he is obliged to send the recipient a request to ensure the return of the subsidy (part of the subsidy) to the federal budget. Consequently, the disagreement of the manager of funds with such changes (conclusion of an additional agreement) in the future will necessitate the return of the subsidy (part of the subsidy) by its recipient; agreement with them will exclude a significant violation and the occurrence of such liability for the recipient, but only if the changes are not only formally possible, but also justified.

These circumstances increase the level of responsibility of the manager of funds when making a decision on agreeing to the changes. Additionally, decision-making is complicated by the already mentioned fact of the frequent absence of appropriate grounds for changes in agreements, as well as the fact that, as a rule, the procedure for concluding additional agreements in general and the types under consideration in particular (including the composition of documents and the necessary amount of information provided to justify changes; as well as criteria for their evaluation), It is not defined either in agreements or in regulatory documents of the fund manager. In practice, this leads to the fact that, avoiding potential risks, the managers of funds refuse to conclude additional agreements to the recipients and (or) require the latter to provide excessive justifications for such changes.

The above allows us to conclude that there is a significant problem in the process under consideration, which consists in striking differences between the established practice of concluding additional agreements, characterized by low regulatory elaboration of processes and, as a result, their duration and inefficiency, and the objectively existing need for rhythmic conclusion of additional agreements to ensure the implementation of projects without disruptions and risks unacceptable to the recipient of the subsidy consequences, including obligations to repay the subsidy.

The approach to solving the problem is to reduce the risks of budget managers associated with the conclusion of additional agreements. The primary measure in this direction is the formation of the terms of agreements in terms of determining possible cases and grounds for their change, determined by the nature of the proposed changes and taking into account the practical needs of recipients, as well as the procedure (business processes) for making changes in each specific case, including requirements for the composition of documents and the necessary amount of information provided to justify the changes.

Court decisions, regulations of regulatory and inspection bodies on specific situations

In addition to analyzing the formal possibility of making changes to the agreements, the validity of such changes is also subject to assessment. There are no unified indicators of such validity in the legislation. For this reason, the team of authors carried out work on the analysis of the Civil Code of the Russian Federation (hereinafter – the Civil Code of the Russian Federation), judicial acts, as well as acts of regulatory and supervisory authorities to identify signs indicating both the admissibility of amendments to the agreement and the opposite, and systematized the results of such analysis.

As general circumstances to be assessed when making a decision to amend the agreement, the following can be highlighted:

1) the grounds for concluding an agreement. The validity of the amendment of the agreement and the risks arising from such changes depend on the basis of the conclusion of such an agreement. So, for example, if an agreement is concluded based on the results of a selection (tender, request for proposals), changing such an agreement has an increased degree of risks;

2) the very possibility of making changes and the basis for changes. As noted earlier, not all Agreements provide for the possibility of making changes. In addition, in accordance with paragraph 1 of Article 450 of the Civil Code of the Russian Federation, a contract change is possible by agreement of the parties, unless otherwise provided by the Civil Code of the Russian Federation, other laws or the contract. If the agreement provides an exhaustive list of grounds for its amendment, the conclusion of an additional agreement on other grounds that are not provided for in the agreement means a formal violation by the parties of the terms of the agreement. However, even the possibility of changing the agreement and suitable grounds does not yet indicate the validity of the changes, and in this case the following paragraph acquires special importance;

3) the impact of changes on the selection results. During the evaluation, the following main question should be answered: "Do (and would) the changes considered for inclusion in the agreement affect: (a) the application submitted by the recipient of the subsidy for participation in the selection, (b) the results of the evaluation of applications and the determination of the winner of the selection; (c) the determination of the amount of the grant provided?".

Considering this issue in more detail, it should be noted that in accordance with Article 432 of the Civil Code of the Russian Federation, an agreement is considered concluded if an agreement has been reached between the parties, in the form required in appropriate cases, on all essential terms of the agreement. Essential means the conditions on the subject of the contract, the conditions that are named in the law or other legal acts as essential or necessary for contracts of this type, as well as all those conditions regarding which, at the request of one of the parties, an agreement must be reached.

The NPA establishes a list of conditions that must be contained in the agreement, i.e. they are necessary for contracts of this type. Such conditions are defined, for example, in paragraph 37 of the Rules for Granting Grants approved by Decree of the Government of the Russian Federation dated 12/28/2019 No. 1930 "On Approval of the Rules for Granting Grants in the Form of Subsidies from the Federal Budget to Scientific organizations and educational organizations of higher Education for the implementation of certain activities of the Federal Scientific and Technical Program for the Development of Genetic Technologies for 2019 - 2027", in paragraph 34 of the Rules for Granting Grants, approved by Decree of the Government of the Russian Federation No. 291 dated 03/01/2021 "On Amendments to the Rules for Granting Grants in the Form of Subsidies from the Federal Budget in order to create and introduce modern technologies into the agro-industrial complex based on their own developments of scientific and educational organizations as part of the implementation of Decree of the President of the Russian Federation dated July 21, 2016 No. 350 "On measures to implement the State scientific and technical policy in the interests of agricultural development", including with the participation of world-class genomic research centers", in paragraph 28 of the Rules for Granting Grants, approved by Decree of the Government of the Russian Federation dated 12/28/2020 No. 2296 "On approval of the Rules for Granting Grants from the Federal budget in the field of science in the form of subsidies to ensure the development of material and technical infrastructure" and in other acts. Therefore, such conditions are essential in the understanding of Article 432 of the Civil Code of the Russian Federation.

If the proposed changes to the agreement affect its terms in comparison with the terms of the announcement of the selection, which were essential for the formation and submission of applications, determining the winner or determining the amount of the subsidy, we are convinced that no change in such terms of the agreement is allowed. The courts extend this approach to contracts concluded as a result of mandatory public tenders of various types, which include tenders for the provision of subsidies and grants.

Specific situations indicating the inadmissibility of making changes.

Changes in the terms of agreements that are essential during the selection process may include:

a) changing the objectives, conditions, procedure for granting subsidies and the result of granting subsidies.

A change in the objectives of the grant established by the agreement may be considered as an inappropriate use of budgetary funds by the recipient of the subsidy. The consequence of such changes is the unilateral termination of the agreement and the obligation of the recipient of the subsidy to return the provided subsidy to the federal budget in the amount determined in accordance with the procedure established in the agreement and in the relevant NPA.

An example from judicial practice:

"The head of K(F)X Kasyanova A.M., according to the agreement (paragraph 2.1.3), has committed herself to create at least three permanent jobs. During the consideration of the case, the defendant indicated that he had created jobs under civil law contracts.

However, these civil law contracts cannot confirm the fulfillment by the defendant of the obligation to create permanent jobs...

…

The defendant's argument that the redistribution of grant funds within the framework of different items of the business plan and the expenditure plan cannot be the basis for imposing an obligation to repay the grant funds is untenable, since, according to the concluded agreement, the recipient is obliged to use the grant for the purposes provided for in accordance with the Procedure in accordance with the goals specified in the business plan and the cost plan submitted to the commission for consideration before the conclusion of the agreement."

[For more information: Resolution of the Twentieth Arbitration Court of Appeal dated 10/23/2019 No. 20AP-5382/19. Here and further: it should be remembered that the facts (circumstances) established within the framework of one case do not have a prejudicial significance when considering other cases. Therefore, the specific circumstances of each case under consideration are subject to study.]

Subsequently, if the amendment of the agreement entailed a violation of public interests (legally protected interests of society or the state), criminal prosecution under article 286 of the Criminal Code of the Russian Federation for abuse of official authority may be initiated against an official of the budget administrator who concluded an additional agreement to amend the agreement.

b) a change in the set of characteristics (indicators) necessary to achieve the results of the grant (hereinafter referred to as performance indicators) provided for by the NPA and the agreement.

An example from judicial practice:

"Since, accepting the contested judicial acts, the courts did not give a proper assessment to the arguments of the cooperative that the targets included in the terms of the agreement differ in content from the indicators of the effectiveness of the use of subsidies in relation to paragraph 6.3. of the Procedure (the agreement establishes an additional indicator of the yield of flax seeds and gross production of flax seeds), as well as the main objectives of providing However, they did not determine the nature of the budget offense, taking into account the fact that the cooperative is not a "recipient of budget funds" in the sense laid down in article 6 of the Budget Code, the court of cassation finds the conclusions of the courts based on incompletely researched evidence, without taking into account all the specific circumstances of the present dispute. Under the circumstances set out, the court of cassation considers that the conclusions of the courts are insufficiently substantiated."

[For more information: Resolution of the Arbitration Court of the Central District dated 02/06/2018 No. F10-5973/17]

c) a change (decrease) in the values of performance indicators that were indicated in the application for participation in the selection and the agreement (especially if these performance indicators were the subject of evaluation of applications and (or) contribute to the values of indicators of state programs of the Russian Federation, federal projects and national projects within the framework of which the selection was carried out);

d) modification (reduction) of the responsibility of the recipient of the subsidy established by the NPA and the agreement.

Position of the regulatory body:

"... in case of establishing the fact of violation by the recipient of the subsidy of the goals, conditions and procedure for granting the subsidy, as well as in case the authorized bank fails to achieve the result of granting the subsidy, the indicator necessary to achieve the result of granting the subsidy specified in paragraph 49 of Rules N 1764, the relevant funds are subject to refund by the recipient of the subsidy, who committed the specified violation, the authorized bank, not those who have achieved such a result and indicator, to the income of the federal budget.

At the same time, we note that the procedure established by Rules No. 1764 for returning a subsidy to the federal budget in case of failure to achieve the result of providing a subsidy, an indicator necessary to achieve the result of providing a subsidy, does not provide for the return of the subsidy in an amount proportional to the degree of failure to achieve the specified result, indicator, or other procedure providing for the return of part of the subsidy."

[For more information: Letter of the Ministry of Finance of the Russian Federation dated 04/21/2020 No. 09-01-09/32112 "On measures of responsibility for failure to achieve the result of providing a subsidy, an indicator necessary to achieve the result of providing a subsidy"]

e) an increase in the deadlines for the implementation of projects established by the NPA and the agreement.

An example from judicial practice:

"Based on the applicant's appeals to the competition commission, the parties changed the project implementation period by concluding additional agreements dated 08/11/2014 No. 1, 08/28/2014 No. 2, and 01/16/2015 No. 3, the final deadline for the project implementation was February 2015.

Subsequently, the plaintiff sent a proposal to the defendant ... with a request to postpone the project implementation period to December 2016, due to the fact that at the moment the project for the development of a family livestock farm has been partially implemented due to the prevailing circumstances: the emergency situation of 2013-2014 caused by dry weather, atmospheric and soil drought, which led to the death of crops; refusal the credit institution in the issuance of credit funds, the economic crisis - independent of the head of the farm.

By letter No. 01-05-06/1306 dated 05/16/2016, the Ministry refused to postpone the deadline for the grant, indicating that the relevant opportunity was not provided for by Decree of the Government of the Orenburg Region dated 10/3/2012 No. 857-P.

Referring to the defendant's refusal to amend agreement No. 696-13-c on a voluntary basis, as well as the illegality of the defendant's refusal, the plaintiff appealed to the arbitration court with this claim.

Refusing to satisfy the claims, the court of first instance concluded that the possibility of extending the period for a longer period is not provided for either by regulations or by the terms of the agreement. The Court of Appeal agrees with the conclusions of the court of first instance.

...

At the same time, the deadlines established by law cannot be changed by agreement of the parties due to the imperative nature of the norms that establish the procedure for providing budgetary funds (paragraph 2 of Article 78 of the BC of the Russian Federation)."

[For more information: Resolution of the Eighteenth Arbitration Court of Appeal dated 03/15/2017 No. 18AP-16275/16]

At the same time, there are known acts of the Russian Government adopted specifically to obtain the possibility of changing the terms of the agreements. For example, Decree of the Government of the Russian Federation No. 308 dated 03/09/2022 "On support for Russian organizations and individual entrepreneurs affected by the introduction of restrictive measures by foreign States", which was adopted to overcome the adverse consequences created by the introduction of restrictive measures by foreign States, assigns to the Ministry of Industry and Trade of Russia a special authority to extend certain deadlines provided for by the agreement.

f) changing the deadlines and the list of reports submitted by the recipients of the subsidy provided for by the NPA;

g) changing the list of expenditure areas, the source of financial support for which is a subsidy.

An example from judicial practice:

"In view of these provisions, the requirement for the return to the regional budget of the subsidy provided under the agreement dated 04/02/2018 No. 3-2018 in the amount of 2,263,772.76 rubles. it is reasonable.

The items of expenditure are strictly mandatory and are not subject to arbitrary change. This rule follows from the requirements of budget discipline, determined by budget legislation.

Consequently, an organization financed from a budget of any level is obliged to use the budget funds received by it in exact accordance with the size and purpose of the funds determined by the relevant cost estimates and registers for the transfer of funds.

Any actions leading to a violation of the use of funds provided for by the budget are a violation of the budget legislation of the Russian Federation."

[More details: Resolution of the Fifth Arbitration Court of Appeal dated 11.11.2020 No. 05AP-6597/20]

h) changes in the requirements for performance indicators and reporting documents on them, which were specified in the announcement of the selection and in the agreement (especially after the end of the reporting period).

An example from judicial practice:

"As it was established, at the conclusion of the agreement, the requirements for indicators for 2015, 2016, 2017 were provided. Supplementary Agreement No. 1 dated July 26, 2017 contains requirements for indicators for the same periods.

And only in the supplementary agreement No. 4 dated September 24, 2019, the parties established requirements for indicators for 2018 - the number of publications based on research and development results in scientific journals indexed in the Scopus database or in the Web of Science database - at least 5.

Link of the Ministry of Education and Science from the contested court decision: "Since the requirements for the indicators for 2018 were introduced only in 2019 after the expiration of this period, the court cannot recognize the application of penalties to the defendant as justified," does not indicate the invalidity of the disputed transaction, but rather its insignificance due to the impracticability of the established requirements, due to the irreversibility of time, which is not related to the will of the parties (Supplementary Agreement No. 4 was concluded on 09/24/2019 with the establishment of obligations for 2018)."

[More details: Resolution of the Ninth Arbitration Court of Appeal dated 05/31/2021 No. 09AP-27381/21 (upheld in cassation)]

i) changing the terms of the agreement in order to give legitimacy to actions actually performed by the recipient of the subsidy that are not provided for in the agreement;

Position of the regulatory body:

"violation of the conditions of subparagraph 1.2.3. agreements on subsidies for the creation of a formal document flow with organizations affiliated with the industrial partner and CJSC DEPERSONALIZED (INN DEPERSONALIZED) (hereinafter referred to as industrial partner 2) (LLC DEPERSONAL1 and LLC DEPERSONAL2) to create accounts payable without actual counter-provision in order to fulfill the DEPERSONALIZED indicator "Volume of attracted extra-budgetary funds" in the amount of 194,500,000 rubles; by involving the organization "IMPERSONAL 4" LLC, which performed work on a topic that does not appear in the Schedule of fulfillment of obligations; by involving the organization to perform work at the expense of extra-budgetary funds, which does not appear among the Performers of the Schedule of Fulfillment of obligations; by offsetting mutual claims on set-off notifications mutual claims in accordance with Article 410 of the Civil Code of the Russian Federation dated 03/05/2019 No. DEPERSONALIZED, dated 03/06/2019 no. DEPERSONALIZED for a total amount of 55,650,000 rubles; failure to comply with established requirements to achieve the values of performance indicators for the provision of subsidies: "The number of completed PNIER projects ready to enter the stage of experimental design work (pilot technological work)", "The number of patent applications filed based on the results of PNIER";

violation of the terms of subparagraph 1.2.1. of the subsidy agreement by accepting obligations and paying at the expense of the submitted subsidy for works not included in the Schedule of fulfillment of obligations when performing PNIER and missing in the Terms of Reference to organizations that do not agree with the participants of the consortium of performers and the Ministry of Education and Science of the Russian Federation, as well as making payments for work actually performed at the time of making payments (the unfulfilled facts of economic life);

violation of the provisions of paragraph 2.1.7. of the subsidy agreement by failure to provide preliminary approval (through the conclusion of additional agreements) with the Ministry of Education and Science of the Russian Federation of planned changes in expenses under the items "Cost estimates for the implementation of PNIER"

[For more information: Submission of the Federal Treasury dated 05.12.2019 No. 23-01-02/26232]

j) modification of other essential terms of the agreement.

And, finally, a change in certain essential terms of the agreement concluded following the results of the selection process may be considered by the antimonopoly authority and the courts as a violation of antimonopoly legislation. The position of the Plenum of the Supreme Court of the Russian Federation in Resolution No. 2 dated 03/04/2021 "On some issues arising in connection with the Application of Antimonopoly Legislation by Courts": "The antimonopoly ban on creating discriminatory conditions also applies to the conditions (procedure) for granting subsidies to business entities in accordance with budget legislation.

The antimonopoly authority has the right, within the limits of antimonopoly control, to assess the legality of granting preferences, including budget subsidies, on other grounds established by articles 15 and 16 of the Law, as well as to control the granting of preferences for the purposes specified in part 1 of Article 19 of the Law on Protection of Competition."

Specific situations indicating the permissibility of making changes

At the same time, it is impossible to assert that the right to amend the agreement is nominal or paralyzed. There are certainly cases in which amendments to the agreement are possible (if there are grounds for changing the agreement in the agreement and there are no explicit prohibitions on such a change in the NPA). Among them:

a) when adopting a regulatory legal act (in legal force not lower than the act of the Government of the Russian Federation, which approved the NPA), changing the essential terms of the agreement (provided that this act contains a condition on its application to agreements concluded before the adoption of such a new regulatory legal act).

Examples from judicial practice demonstrating the consequences of the absence of a retrospective clause in the NPA:

"Decree of the Government of the Russian Federation No. 98 dated 02/08/2019, which entered into force on 02/11/2019, amended Resolution No. 717 dated 07/14/2012 that it is necessary to purchase agricultural machinery and equipment, truck transport, equipment for the production and processing of agricultural products, the service life of which does not exceed 3 years.

These resolutions do not contain an indication of their extension to the relations that arose before their entry into force, and they cannot be applied to the legal relations in question that actually arose on 02.11.2017 at the conclusion of agreement No. 20. No changes were made to the agreement regarding the establishment of the maximum service life of the acquired property."

[For more information: Resolution of the Sixth Arbitration Court of Appeal dated 10.10.2019 No. 06AP-6110/19]

"The new version of the Procedure dated 03.11.2017 provides for a competitive selection of social service providers and the conclusion of an agreement with the Ministry after passing such a competitive selection.

Thus, due to a significant change in the Procedure for granting subsidies after 03.11.2017, it is not possible for the Fund to fulfill the terms of the amended Procedure for contracts concluded and executed in accordance with the previous version of the Procedure....

The Resolution of the Government of the Kaliningrad Region dated 03.11.2017 No. 588 does not contain instructions on the application of its provisions to legal relations that arose before its adoption.

Thus, in relation to the circumstances of the present case, the court correctly applied the provisions of the Procedure in the wording in force until 03.11.2017."

[For more information: Resolution of the Thirteenth Arbitration Court of Appeal dated 08/20/20 No. 13AP-137/20]

b) if the amendment of the agreement is not aimed at changing the conditions that were the subject of the evaluation of applications and influenced (could have influenced) the choice of the winner.

An example from judicial practice:

"Changing the expenditure plan after recognizing the head of K(F)X as the winner of the competition and receiving the grant, including at the stage of spending the grant funds, would lead to infringement of the rights of other participants in the competition.

In accordance with paragraph 3.15 of the Procedure, the competition commission evaluates the applications and documents admitted to the selection by calculating the aggregate indicator, including the values of each of the criteria for evaluating the participants of the competition in accordance with Appendix No. 2 to the Procedure. And one of the criteria is the assessment of the business plan by a member of the competition commission, which contains, among other things, an expense plan."

[For more information: Resolution of the Twentieth Arbitration Court of Appeal dated 10/23/2019 No. 20AP-5382/19]

c) if the amendment of the agreement is due to force majeure circumstances (documented), which caused the impossibility of fulfilling the agreement by the recipient of the subsidy.

Detailed examples are not provided due to the evidence of such a case. Abbreviated examples from judicial practice: "adverse weather conditions caused by soil drought," - decision of the Sixteenth Arbitration Court of Appeal dated 12/16/2020 No. 16AP-4345/20; "cases of outbreaks of dangerous diseases common to humans and animals (brucellosis among dairy cattle) have been recorded," - ruling of the Supreme Court of the Russian Federation dated 02/05/2021 No. 305-ES21-134;

d) if, within the reporting period, the sequence changes and (or) the wording of the work provided for in the schedule is clarified (not replaced), without changing the result of the grant;

e) when redistributing expenses by items (subject to compliance with restrictions on the maximum amount of expenses for the relevant types of expenses established by the NPA and the agreement), without changing the result of the grant and the possibility of achieving the values of performance indicators established by the agreement;

f) in other cases not related to a significant change in the terms of the agreement, if there is a justification for the objective need to make such changes.

Conclusions

This article highlights and describes specific situations that occur in legal relations arising from agreements, and gives an assessment based on judicial acts, acts of regulatory and supervisory authorities, regarding the permissibility or inadmissibility of changing agreements. The most frequent types and causes of changes in agreements that took place in the practice of the authors are considered. The problem in the coordination of funds by managers of such changes is formulated, which limits the effectiveness of the implementation of agreements, and ways to solve it are outlined.

In accordance with Article 168 of the Civil Code of the Russian Federation, the conclusion of an additional agreement that changes the essential terms of the agreement may be qualified as a transaction that violates the requirements of a law or other legal act, due to the lack of the parties' right to change the contract concluded based on the results of the selection at their discretion. In this case, the transaction (supplementary agreement) will be invalid (void or disputed). As the analysis of judicial acts has shown, the practice of concluding such additional agreements takes place.

It should be noted that the conclusion of void or disputed additional agreements amending the agreements is ultimately not beneficial not only to the official or the administrator of budgetary funds, but also to the recipient of the subsidy. In particular, the latter risks subsequent legal disputes and the recovery of both the subsidy itself and interest on the use of other people's funds. So, for example, when the control body checks the activities of the administrator of budget funds, the fact of concluding even a controversial additional agreement may enter into the inspection act and the order. And such a manager, in order to comply with the order, will have to go to court demanding that the recipient of the subsidy refund the amount of the subsidy in court (in whole or in part, depending on the terms of the NPA and the agreement). Court decisions that are positive for the recipient of the subsidy are extremely rare. The vast majority of claims for recovery of subsidy amounts from recipients for non-compliance with the terms of agreements end in favor of the persons who provided the subsidy.