Excess of Authority or Good Faith Conduct: Liability Issues in the Energy Sector Under Foreign Unilateral Restrictive Measures
( Pp. 193-199)

Abstract: Objective: The reason for writing this article is the difficulties encountered by the executive bodies of Russian energy companies that are under the control of foreign shareholders from unfriendly countries during the period of foreign sanctions regimes. The inoperability of the boards of directors of Russian energy companies consisting of foreign nationals due to the impact of foreign unilateral restrictive measures (sanctions of unfriendly countries) has led to the need to ensure the economic activities of such companies by their executive body and management. Performing the duty to act in the interests of the company reasonably and in good faith in a situation of inaction of the Board of Directors, the executive body (general director) is forced to conclude transactions with formal excess of authority. The purpose of the article is to build a line of defense of the executive body’s actions as good faith behavior and to propose amendments to the current legislation.
Model: the methodological basis of the article is the analysis of the behavior of the executive body of a legal entity in terms of compliance with the requirements of the principles of good faith, the balance of public and private interests, as well as for the protection of public interest, performance of the statutory duty to act in the public interest, the presence of extreme need in the actions, as well as the establishment of authority apparent from the situation. The area of research is the good faith behavior of the executive body of the Russian legal entity, and ways of proving it in order to avoid liability of the executive body for entering into a transaction with formal excess of authority.
Conclusions: There is no excess of authority at the conclusion of a transaction without its approval by the Board of Directors, if the executive body proves that: (1) a balance of public and private interests was found; (2) there was no other way to resolve the conflict of norms of the two legal orders or (3) public interest [ensuring reliable and uninterrupted energy supply] has legal priority for the purposes of legal protection. It is required to clarify the norm of paragraph 2 of Article 53.1 of the RF Civil Code, to supplement the norm of paragraph 1 of Article 183 of the RF Civil Code and to fill with new legal content the concept of «situation» in the meaning of paragraph 1 of Article 182 of the RF Civil Code.
Scope of research / possibility of further use of the results of scientific work: The results of the study are part of a new comprehensive approach to the study of «bad faith behavior» as an independent legal concept, as well as the justification of a new method of legal regulation - the negation of bad faith behavior.
Practical significance: The author proposed a system of proving the good faith behavior of the executive body (general director) on the basis of the current legislation. For the purposes of avoiding liability for the conclusion of a transaction in the absence of its approval by the Board of Directors the CEO of a Russian company must be able to prove the following: the company’s activities are related to the satisfaction of public interest; profitability or profitability of the transaction for the company; the authority to sign the transaction was apparent from the situation; the presence of extreme necessity in the actions of the executive body; the fact of notifying the Board of Directors of the conclusion of the transaction exceeding authority as a manifestation of good faith; compliance with the principle of balancing public and private interests.
Originality/value: The article is addressed to the legal scientific community, legal practitioners, may be useful to law students at universities.

Zhanna I.S., (2023), EXCESS OF AUTHORITY OR GOOD FAITH CONDUCT: LIABILITY ISSUES IN THE ENERGY SECTOR UNDER FOREIGN UNILATERAL RESTRICTIVE MEASURES. Gaps in Russian Legislation, 3 => 193-199.

Information “Constitutional and legal aspects of improving rule-making activities (based on the decisions of the Constitutional Court of the Russian Federation in 2013-2015)”, prepared by the Secretariat of the Constitutional Court of the Russian Federation and approved by the decision of the Constitutional Court of the Russian Federation of 06/23/2016.
Subsection «On economic sanctions and the possibility of their amendment/cancellation» of the section «Foreign economic activity» of the Review of issues contained in the appeals of citizens, representatives of organizations (legal entities), public associations received by the Ministry of Economic Development of Russia, and the measures taken, approved by the Ministry of Economic Development of Russia (Text of the document SPS «Consultant Plus» is given in accordance with the publication on the website http://economy.gov.ru as of December 24, 2018).
Council Decision (EU) 2022/428 of 03/15/2022 amending Regulation (EU) No 833/2014 regarding restrictive measures in connection with Russia’s actions destabilizing the situation in Ukraine // URL: https://eur-lex.europa. eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2022:087I:FULL&from=EN.
Sedova Zh.I. State Unilateral Restrictive Measures and Legal Mechanisms for Protecting Business from the Negative Impact of Foreign Restrictive Measures // Russian Yearbook of International Law. - St. Petersburg: Russian Association of International Law. Publishing house LLC «Contrast», 2019. P. 164 - 184.

unilateral restrictive measures, sanctions of unfriendly states, board of directors, excess of authority, extreme necessity, principle of good faith, principle of balance of public and private interests, power apparent from the situation, energy sector..