Indemnity Action

in civil law and procedure, a claim for compensation for money spent addressed to a court or arbitration tribunal by an organization or a citizen who has performed an obligation for an obligor or some other person. For example, in Soviet law an organization or citizen responsible for damage must, upon an indemnity action by a social insurance or social welfare agency, reimburse the agency for the amount of benefits or pensions paid to a victim for illness or injury caused through the fault of the organization or citizen and, in the case of the victim’s death, those benefits or pensions paid to the persons indicated by law. In accordance with Article 81 of the Basic Principles of Civil Legislation of 1961, an insurance organization that has paid insurance compensation on property insurance has the right to bring a claim for a sum equal to or less than this amount against the person responsible for the damage. Article 93 of the Basic Principles of Labor Legislation gives the court the right to obligate an official guilty of illegally dismissing or transferring a worker to another job to indemnify the loss caused to the organization that paid for the time of forced absence or performance of a lower-paid job.

In arbitration practice the indemnity action is used in relations between enterprises and other organizations; an obligor-organization that has paid a certain sum for failure to perform or improper performance of a contract must be reimbursed by the organization directly at fault for violation of the contractual obligation, for example, one that supplied poor-quality or incomplete products.