Point of law: whether the contract of surety is still in force if the amount of the underlying principal obligation which it intends to secure has been increased without the consent of the guarantor?

Alternative solutions: 1) the contract of surety shall terminate in such circumstances; or 2) the contract of surety is still valid, although the amount of guarantor’s liability is still confined to the original one which existed prior to the increase in the liability of the debtor.

Ratio decidendi: the second solution is legally correct.

Practical consequences and implications of the decision: the opinion of the Presidium in this case purports to curb a tendency (quite common among the guarantors) to easily destroy the contract of surety by way of an unduly formal interpretation Art 367 of the Civil Code of Russia. Besides, the Judgment provides that prior court decisions in analogous cases if inconsistent with this interpretation may be reversed in the procedure and within the limits envisaged by Art 311 of the Commercial Procedure Code.