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DOI: https://doi.org/10.34069/AI/2022.60.12.24
How to Cite:
Maxatov, N., Mudryi, S., Mudra, O., Akimbekova, M., & Stepanova, T. (2022). Conflict of interests in commercial and civil
law. Amazonia Investiga, 11(60), 224-234. https://doi.org/10.34069/AI/2022.60.12.24
Conflict of interests in commercial and civil law
Конфлікт інтересів у господарському і цивільному праві
Received: November 30, 2022 Accepted: December 28, 2022
Written by:
Nurzhan Maxatov109
https://orcid.org/0000-0001-7459-2502
Serhii Mudryi110
https://orcid.org/0000-0001-5839-8742
Oksana Mudra111
https://orcid.org/0000-0002-3427-3635
Meruyert Akimbekova112
https://orcid.org/0000-0001-5295-2642
Tetiana Stepanova113
https://orcid.org/0000-0002-7419-0770
Abstract
The modern specifics of the development of
social relations are due to new phenomena that
require research and regulation. One of these is
the issue of conflict of interest settlement in the
business sphere. Given this, it is critical to
analyze the causes of conflicts of interest in the
system of management and production of public
goods, which will contribute to the acceleration
of the improvement of the management system
and the transformation of the economy of
Ukraine. The work aims to identify the conflict
of interests in the business sphere and to
determine the methods of their settlement. The
research methodology consists of: the dialectic
method, the abstraction method, the analysis and
synthesis method, the logical-semantic method,
the classification and grouping method, the
system-structural method, the functional method,
the sociological method, the statistical method,
the formal-legal method, the synergistic method,
the historical-legal method, comparative-legal
method, method of interpretation and
hermeneutics, analytical method and logical-
legal method. As a result of the research, it is
noted that the conflict of interests is a generally
accepted term denoting a contradiction between
the interests that are protected by law and must
be satisfied by the actions of another authorized
109
Senior lecturer of Adilet Law School of the Caspian University, Almaty, Republic of Kazakhstan.
110
Economic Court of Kyiv, judge, MAUP graduate student, Ukraine.
111
Department of Consitutional Law and Human Rights, National Academy of Internal Affairs, Ukraine.
112
Senior lecturer of Adilet Law School of the Caspian University, Almaty, Republic of Kazakhstan.
113
Doctor of Juridical Sciences, Professor, Head of the Department of Constitutional Law and Justice, Odesa I.I. Mechnikov National
University (Odesa, Ukraine).
Maxatov, N., Mudryi, S., Mudra, O., Akimbekova, M., Stepanova, T. / Volume 11 - Issue 60: 224-234 / December, 2022
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person and the personal interests of this
authorized person. In particular, the essence,
peculiarities of passage, and consequences of the
conflict of interests in the field of management
were investigated. Attention is drawn to the fact
that the conflict of interests in the field of
management is considered as a potential threat to
the implementation of entrepreneurial activity.
Keywords: Conflict of interests, economic
interest, protection of rights, economic subjects,
market legal relations.
Introduction
For modern Ukrainian society, the issue of
conflict of interest is extremely relevant. For the
effective development of the economy of
Ukraine, business, and the production sphere of
services, it is important to take measures to
eliminate problematic issues and threats. One of
these threats is a clash of interest, and therefore
the state aims to find optimal mechanisms for
preventing and resolving such conflicts.
Given that business entities naturally seek to
monopolize the market, the state and society aim
to limit such monopolization and prevent the
harm that businesses can do for the sake of
enrichment. In this context, measures are created
to regulate, identify and avoid conflicts of
interest both among the state and business and
among subjects of entrepreneurial activity.
In general, a conflict of interests can also be
characterized as a difference in the values of each
of the parties to the partnership. However, clash
may arise when market participants will present
business as a kind of game in which some win at
the expense of others, or the state's victory in
disputes will mean the firm's loss and vice versa.
On the one hand, entrepreneurs are interested in
deregulation as non-interference of the state in
the economy, on the other hand, the business
itself seeks to obtain the protection of its interests
from the state, which can perform the function of
an arbiter that will punish the violator of certain
rules.
Conflicts of interest are often based on
imperfection and gaps in legal regulation, lack of
legal mechanisms for resolving disputes, and
historical traditions. However, the analysis and
understanding of the clash of interests both at the
legislative level and in the doctrinal sense allow
us to better cope with this threat and take
preventive measures on time.
In addition, in connection with the conflict of
interests, a derivative problem arises -
prosecution. At the same time, questions arise
regarding the introduction of liability for conflict
of interests and the consequences caused by the
clash of interests. Therefore, the legislator's task
is to completely exclude the occurrence of a
conflict of interest and limit the impact of a clash
of interest and minimize negative consequences.
This task is achieved by various legal and
organizational measures, and therefore, to take
such measures in the future, it is necessary to first
analyze the concept of conflict of interests and
pay attention to its peculiarities in the field of
management.
Thus, the goal of the authors of this article was a
detailed analysis of the causes and consequences
of various conflicts in the economic sphere, as a
result of which a search was made for effective
ways of their settlement.
Theoretical Framework or Literature Review
In the work of Bilyak (2017), the specifics of the
conflict of interests are considered. The author
notes that conflicts of interests are expected in
any social structure and are a necessary condition
for social development, and the problem of
responsibility arises in connection with a conflict
of interests. That is, a conflict of interests leads
to the violation of rights and the occurrence of
negative consequences.
In the article by Bogush (2013) it is noted that
today there is no single, universally accepted
definition of the category "interest" since each
science considers the latter through the prism of
its subject, subject, object, methodology, goals,
and task. Attention is drawn to the fact that in the
corporation there is a single interconnected
system of interests of its
shareholders/participants, namely: common
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interest, the essence of which is to improve the
economic indicators of the corporation's activity;
the interests of certain groups and the individual
interests of shareholders/participants of the
corporation, the main of which is to obtain the
maximum, fairly distributed profit of the
corporation (dividends).
Vinnyk (2012) considered the issue of corporate
conflicts. The researcher determined that a
corporate conflict of interest arises between the
subjects of corporate relations regarding
corporate goods, causing negative consequences
for them (some of the participants in the
relations) or creating a real threat of their
occurrence.
Problematic issues of legal regulation of
agreements with interests in the practice of joint-
stock companies are considered in the work of
Gabov (2005). Interest as a sociological category
is considered in the work of Glezerman (1966).
The issue of interest in civil law was investigated
by Grybanov (2000). Hudkov (2014) analyzed
the general principles of the conflict of interests
and the ways of its settlement in national
legislation. Dmitriev, Kudryavtsev &
Kudryavtsev (1993) devoted to the study an
introduction to the general theory of conflicts.
The sociology of conflicts was studied by
Zdravomyslov (1996). Peculiarities of legal
regulation of conflicts are defined in the general
theoretical textbook of Ioffe (2000). Ekimov
(1984) studied interests and rights in a socialist
society.
Kosenyuk (2016) analyzed the peculiarities of
the settlement of conflicts of interest in the
partnership between businesses and the state. The
author notes that conflicts can stimulate both
sides to improve, and in the case of deepening or
neglect, lead to the collapse of the coalition. The
prevention of conflicts, as well as their successful
settlement, will be facilitated by setting up a
dialogue between all interested parties,
increasing efficiency in the fight against
corruption in the center and cities. The
phenomenon of lobbying interests of
corporations and associations of entrepreneurs
remains an understudied phenomenon in
economic science. The interests of the public
must be taken into account in the partnership
between the state and business both at the stage
of preparation (substantiation) of the partnership
and at the stage of implementation. This will
allow not only reduce the costs of investment
projects but also improve the investment climate.
Problematic issues of regulation of interests in a
socialist society were considered by Kuliev
(1967). Matuzov (1972) examined personality
from the point of view of conflict theory.
Mykhaylov (2002) devoted more detailed
attention to highlighting the category of interest.
The issue of non-property interest in civil law
was analyzed by Pasek (2003). Pakhomov (1974)
considered interests through the prism of
economic relations of socialism. Also, Sinaisky
(2002) and Tarikanov (2006) investigated the
general principles of the category of interest in
civil law.
The article by Sobol (2016) examines the
essence, peculiarities of the passage, and
consequences of the conflict of interests in the
sphere of control. Conflict of interests in the field
of control is considered by the author as a
potential threat to the quality of control
procedures, completeness, and relevance of
results. The author formed a conflict of interest
matrix based on the professional nature of the
conflict on the part of the subject of control and
revealed the content of the conflict of interests in
the case of the prevailing personal interest of the
subject of control in the results of the inspection,
which contradicts his professional duties.
Ethical aspects regarding the conflict of interests
in public service were assessed by Vasylevska
(2014). Mykolenko (2019) investigated general
ideas about the conflict of interests in the national
consciousness. The author's work reveals the
peculiarities of the legal support mechanism for
the prevention and settlement of conflicts of
interest in the sphere of activity of public
administration bodies. Attention is drawn to the
fact that the conflict of interests significantly
increases the risk of committing corrupt acts, and
therefore is only a prerequisite for corruption in
public administration bodies.
Karpova (2020) notes that the definition of the
concept of conflict of interest in Ukrainian
legislation can be found in several normative
legal acts, such as the Law of Ukraine "On
Prevention of Corruption" (Law 1700-VII, 2014)
and the Law of Ukraine "On Advocacy" (Law
5076-VI, 2012) and even though the effect of the
specified acts applies to certain spheres of
activity, however, the provided definitions can be
used by enterprises of any form of ownership and
direction during their activities to identify
potential or real conflicts.
The institution of conflict of interests in judicial
activity was analyzed by Chorna (2015). The
judge drew attention to the fact that the
institution of conflict of interests in judicial
activity requires urgent decisions from both the
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legislator and the Council of Judges. Delaying
these issues may threaten the independence of
judges and lead to an expanded interpretation by
interested parties of the grounds for applying the
provisions of the law "On Prevention of
Corruption" to "unwilling" judges.
The problematic issues of the occurrence and
resolution of conflicts of interest are considered
in the work of Moroz (2017). A detailed analysis
of the conflict of interests in the context of a
national audit was carried out by Nazarova
(2016). Shalimova (2012) also chose the causes
and fundamental principles of auditing from the
perspective of the human model and the problem
of conflict of interests as the object of her
research.
Polishchuk (2018) examined the conflict of
interest in detail and analyzed what you need to
know in order not to commit an offense. In
particular, it was determined that a conflict of
interests is a destructive phenomenon for any
corporate environment and society as a whole.
Conflicts of interest create a favorable
environment for the growth of corruption and
cause property damage to the state, and third
parties, including as a result of the creation of
unilateral advantages, violation of equal
conditions of competition, or access to
administrative services. In the workforce, the
conflict of interests is the biggest demotivating
mechanism for employees, and, therefore, it is
very critical that such situations do not arise, as
they significantly affect the effectiveness of the
staff. Therefore, according to the author,
prevention, timely detection, and settlement of
conflicts of interest are one of the ways to
overcome and prevent corruption.
Despite the interest among scientists in the
category of conflict, the issue of conflict of
interests in the field of management is
insufficiently researched. This makes it
necessary to pay more attention to this topic.
Methodology
The use of the dialectical method made it
possible to compare the concepts and content of
such categories as "conflict", "conflict of
subjects", "conflict of economic goals", etc.
Dialectic, studying not specific forms and types
of development, but general points, connections,
and regularities, has become a universal method
for learning the object of research in its
development.
The application of the abstraction method made
it possible to determine the place of measures for
the prevention and settlement of conflicts of
interest in the field of market relations, including
the identification of signs and features of
conflicts of interests.
Methods of analysis and synthesis were used in
the study of the procedure for identifying and
resolving conflicts of interest. Thus, the analysis
and research method contributed to the
imaginary dismemberment of the whole
phenomenon into its parts – simpler properties
and connections regarding the conflict of
interests of business entities. At the same time,
the synthesis made it possible to imaginatively
connect the separate sides of the issue of conflict
of interest settlement and understand the general
problematic issues in their unity.
Using the logical-semantic method, definitions
of the concepts of interest, economic interest, and
conflict of interest are provided, which
collectively help to reveal the essence of the
researched topic, identify controversial issues,
and propose ways to resolve them.
Methods of classification and grouping were
used to study known and distinguish types of
conflicts of interest. Thus, thanks to the use of
these methods, it became possible to distinguish
classifications and realize the difference between
various manifestations of the conflict.
Systemic-structural and functional methods
made it possible to establish the place and role of
state authorities, business entities, and other
persons in the system of entities entrusted with
the responsibilities of preventing and resolving
conflicts of interest.
Sociological and statistical methods were used to
substantiate the research results. The specified
methods in their entirety made it possible to
expand the empirical base of research on
conflicts of interest in the field of entrepreneurial
activity and the scope of their application.
During the study of regulatory legal acts in the
field of business, which determine the powers of
economic entities to settle disputed aspects of
activity and generally determine what constitutes
a conflict of interests, a formal legal method was
used.
The synergistic method is used in characterizing
the system of conflict of interest regulation as
one that enhances the effect of the interaction of
measures of forecasting, prevention, settlement,
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conflicts, control over their implementation, and
the use of coercive measures.
Thanks to the research using the historical-legal
method, the genesis of the research and legal
regulation of the prevention and settlement of
conflicts of interest in the field of business were
traced.
Comparing the foreign experience of legal
regulation of the conflict of interests and the
national experience on this issue, the
comparative legal method was used. The use of
this method made it possible to compare, apply
and show similarities and differences in the
definition, regulation, and resolution of the
conflict of interests by different states.
The method of interpretation and hermeneutics
was used to determine the conceptual apparatus
related to the conflict of interests. The analytical
method made it possible to justify the need to
eliminate gaps and conflicts in the legislation in
the field of economy, and the logical-legal
method – to develop proposals and
recommendations for its improvement.
Results and Discussion
The results of the research, which the authors of
the article achieved during their work, can be
displayed as follows:
Well-known trends underlying various interests
of all subjects of legal relations in society, for the
most part, arise, exist, and cease at those
moments when economic and legal changes are
the most relevant and determined by social
needs. At this time, the most pronounced
contradictions in the interests of legal entities can
arise, which in turn creates conflicts of interests
in the effective provision of economic law and
order.
Considering that a feature of economic and legal
relations is usually the desire to obtain profit by
all parties that are participants in such legal
relations, the conflicts of interests that arise as a
result of contradictions in relations acquire
special importance, which affects the stability
and development of legal relations between sub-
objects of management.
The relationship to the understanding of market
legal relations and the market as a generalizing
concept can be mediated by several interrelated,
but in some cases, such that contradict each other
interpretations: on the one hand, market legal
relations can be understood as a logical, from the
standpoint of entrepreneurial risk, a mutual
desire of the parties to receive property profit,
and on the other hand, it can be imagined as a
conflict of interests, as a result of essentially
opposite directions, which involve optimization
(the lowest possible costs) to achieve the greatest
property profit.
In part, this position is expressed by
A.G. Zdravomyslov (1996).
In the context of the above, it is interesting that
the provision of both the first and the second
understanding is the basis of identical legal
mechanisms that are currently relevant in the
current legislation of Ukraine. First of all, we
mean such mechanisms of economic and legal
influence on the regulation of the relations of
subjects, which can be attributed to the category
of private-law measures of influence (purchase
and sale contracts, mines, and the like), as well
as measures of public-law influence, which are
reflected in Article 12 of the Economic Code of
Ukraine (Law 436-IV, 2003) "Means of state
regulation of economic activity" (state order,
licensing, patenting, quotas, etc.). However, what
we mentioned does not exclude the search for
and legal justification of other effective
mechanisms for regulating the above-mentioned
interests of business entities, because no matter
which of the above-mentioned positions we
would not adhere to, the interest of the business
entity is natural, and does not contradict the
current norms.
The above-mentioned hypothesis regarding the
interrelated two views on the mechanisms of
legal regulation of the conflict of opposing
economic interests of business entities is
confirmed by O.S. Ioffe, who considered one of
the main tasks of the civil-legal doctrine to invent
the most perfect legal forms to mediate normal
economic processes (Ioffe, 2000). Such a
position does not contradict, and, moreover,
confirms another thesis expressed to us above
regarding the "naturalness" of the desire of any
economic entity to find the maximum economic
profit from any economic-legal relationship.
The logical solution to the question is the need
for a terminological study of the concepts that
justify the existence and underlie the clash of
opposing economic aspirations and can be
defined as "economic interest" and "conflict of
economic goal". It should be agreed in advance
that the study of these terms in the context of their
content load and, perhaps, their generic
characteristics, may be on the border of many
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social sciences, which should be reflected in their
definitions.
Thus, consideration of the concepts of
"economic interest" and "conflict of economic
purpose" is expedient to be studied from the
existing economic and legal definitions that take
place in the doctrine.
It should be noted that both of the concepts
studied by us in the field of economic-legal
relations have not only a close economic and
legal connection with each other but also in most
cases should be perceived in a logical sequence
as a complex legal structure. Economic interest
usually generates a certain opposite in the
positions of the subjects of relative (and in some
cases absolute) legal relations, which underlie the
achievement of an economic goal and is a
consequence of the emergence of a conflict of
interests as a conflict of economic goals.
Agreeing with the fact of the primacy of
economic interest in the event of a conflict, we
cannot avoid stating that the phenomenon of
interest is not only in the field of economics and
law, but also psychology and sociology.
From the point of view of economic science,
interest is a direct relationship between a person,
a collective or society, which arises in connection
with the reproduction of a product in order to
satisfy economic needs (Pakhomov, 1974).
From the point of view of sociology, interest is
that which is objectively necessary, important,
significant and useful both for one individual and
for society as a whole (Matuzov, 1972).
From the point of view of psychology, interest is
a category that characterizes the subject's mental
disposition to commit certain actions, as well as
his internal emotional relationship as his
assessment of the actions he has taken (Matuzov,
1972).
The last caveat is extremely important in the
context of a generalized understanding of interest
as a category from the standpoint of legal
science. After all, as is known, economic and
legal responsibility can arise without the
presence of such a basis as guilt, which can be an
internal emotional relationship to one's own
assessment of the committed actions.
All this gives us a basis for focusing attention on
certain ways of researching economic interest as
a legal category.
First of all, we consider it expedient to focus on
the achievements initiated by Rudolf von
Jhering, who drew attention to the special role of
interest in the context of satisfying the interest of
the subject of law by obtaining the appropriate
equivalent. Thus, the outstanding German jurist
concluded that the provision of the equivalent of
property and (or) non-property nature is at the
basis of the valid and (or) hidden needs of the
subject of law, through which subjective private
rights can be ensured. The above can be laid as
the basis of modern stereotypes of understanding
the essence of relations between business
entities. This can be justified by the fact that
Jhering's views on the law as a protected interest
refer to doctrinal provisions (Jhering, 1865),
which were reflected in such categories as "free
law movement", "conflict of interests",
"weighing of interests" and "assessment of
interests".
Yering's views, mentioned by us, allow us to
consider the law in the general sense and
individual interconnected norms as a system for
balancing public needs and interests by ensuring
the normalized behavior of subjects who want to
achieve an expected economic goal. Thus,
economic interest can be mediated by objective
reasons, but be satisfied by subjective ways of
achieving it.
All of the above is the basis of modern legal
interpretations explaining the legal nature of
economic interest.
Primarily, it should be remarked that the
differences in modern views regarding economic
interest consist exclusively in positioning it with
a phenomenon that has a subjective or objective
nature in the subject that produces it. In this way,
economic interest can be considered as a
subjective phenomenon (it exists only in the
mind of the subject) and is realized according to
the will of this subject (Sinaisky, 2002).
Another modern view of economic interest
reveals it as an objective category that does not
require the necessity of existence in the pursuit of
the subject, but is determined by the social need
to implement social relations as a priority
(Mykhaylov, 2002) through the objective
manifestation of a conscious attitude, and must
be implemented through appropriate own actions
(Glezerman, 1966). In addition, material interest
is objective both in form and in content (Kuliev,
1967), which can hardly be criticized, because
any person, as a material being, always strives for
a material result, which is absolutely natural. The
latter is reflected in the results of the joint will of
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the participants in the actions of the business
entity.
The next, from the widespread modern positions
regarding the legal nature of economic interest, is
an assumption that allows a combination of
objective and subjective principles. This is
justified by the presence of a close connection
between objective social conditions and the
behavior of subjects of economic interest, which
include individuals, social groups, classes, and
society (Grybanov, 2000).
The question is quite interesting: "Can conflict
exist without interest?" And can interest exist
without conflict?”
In our opinion, the answers to these questions are
obvious. After all, any economic interest, if it is
agreed upon between the parties, should not lead
to a conflict of interests. In the opposite case - in
the absence of compromises regarding economic
interest, a conflict will arise. Therefore, in our
opinion, it is absolutely logical and consistent to
move to the next category, which is "conflict".
Even though conflict as a category has a
sufficiently large number of definitions proposed
by Ukrainian and foreign scientists of different
times, which are justified by the types of phases
of the existence of the conflict, we do not
consider it necessary, for now, to dwell on these
phases. After all, the possibility of conflict in the
future (potential conflict), which can be
considered a latent phase, as well as any active
phase (actual, existing conflict) for the purpose
of our task is identical because they are included
in the existing typology of legal conflicts (law-
making, law-implementation, general law, inter-
industry, industry, etc.) (Tikhomirov, 2017).
For the purpose of our research, it is noteworthy
to understand that a conflict in any of its phases
is a clash of positions of subjects regarding the
goal of interests or motives (Dmitriev et al.,
1993). At the same time, it should be commented
that the aforementioned typology of legal
conflicts can include both conflicts based on the
clash of incompatible ideas, which is a
manifestation of human cognitive psychology,
and a conflict of interests, which is the basis of
the subject's desire to take possession of material
resources, which are in the opponent's area of
responsibility (Dmitriev et al., 1993). This type
of conflict has a fully materialized manifestation
and, for the most part, is the subject of our
research.
Quite interesting from the point of view of
practical application is the determination of the
existence of the emergence and (or) change of
legal relations between subjects, which is
determined by the presence of the conflict itself
because we can assume that a legal conflict has
differences from a conflict of interests.
Such a difference may consist in the existence of
at least three characteristic features of the latter.
First, the conflict of interests initiates the very
basis for the emergence or change of the legal
relations of the participants, through the
acquisition of one of them (or several) legal
statuses, which allows qualifying its presence
(Gabov, 2005).
Secondly, the conflict of interests in the form of
a legal status that allows qualifying its presence"
is absolutely not identified with the definition of
one or another interest in particular, but only
indicates the fact of the existence of
contradictions of several conflicting interests.
Thirdly, the conflict of interests, as a
phenomenon, does not depend on which of the
subjects of legal relations will make a choice in
favor of another of them, or refuse it.
So, from the above, the logical conclusion is that
the conflict of interests can be characterized as a
certain psychological state of the subject, which
"belongs" to such an interest for its further
implementation in the emergence, change, or
termination of certain legal relations, as a
confirmation of the existence of a legal fact.
Further, we consider it expedient to distinguish
between the conflict of interests and the conflict
of subjects, as well as the situation of conflict of
interests.
An important feature of such a category as a
conflict of interests should be considered the
complexity of its legal regulation due to the
multiplicity of facts that can mediate a certain
psychological state of the subject who “belongs”
to such an interest for its further implementation
in the emergence, change or termination of legal
relations, not to mention the fact that, usually,
norms dedicated to conflict of interests in the
business sphere are initiated "late", leaving such
disputes unsettled. Thus, the study of the conflict
should be considered in at least three areas,
which can be connected with each other in
sequence, and also act as a separate set of legal
facts, which, as a result of the subsequent
agreement between the subjects, did not lead to
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the emergence, change or termination of legal
relations. We consider these areas to be: conflict
of interests; conflict of subjects; conflict of
interest situations.
Let's consider their connection.
The conflict of interests should be considered an
objective manifestation of conflicting visions in
the assessment priority and ways of
implementing decisions in the broadest possible
sense. Thus, a conflict of interests can be
manifested both in relations that arise in direct
dependence on the will of the subjects who are
participants in such relations and in situations
where the subject's will does not affect the
justification of the position taken due to the
imperative existing in the legislation.
An example of the latter can be situations when
the imperative norm is aimed at ensuring restraint
of the functional powers of various management
bodies (requirements for the composition of
management bodies or requirements for ensuring
the fulfillment of fiduciary duties). Thus, the
members of the audit commission cannot
simultaneously perform the functions entrusted
to the members of the supervisory board or the
functions entrusted to the persons of the
executive body. Similarly, a person who is
entrusted with the performance of the functions
of an executive body alone cannot at the same
time ensure the performance of the functions of
the chairman of the board of directors or the
chairman of the supervisory board. The above
confirms the fact that a conflict of interests can
appear both in relations that arise in direct
dependence on the will of subjects who are
participants in such relations, and in situations
where the subject's will does not affect the
justification of the position taken due to the
imperative that exists in the legislation, which
proves that a conflict of interest is not always a
legal conflict. After all, as we mentioned above,
it can be determined as a direct state of the will
of the subject of initiation of such interest, and
not depend on the will of the subject of initiation
of interest.
The above gives reasons to qualify the situation
as a conflict of interests because it is possible to
talk about the contradiction of possible interest
and need, which is determined by the imperative
component. Thus, the stated contradiction is at
the basis of the need to share legal consequences
that may be caused by economic interest and
need (in the broad sense of the factors generating
such need). The above fully confirms the
indisputable existence of the fact of a close
relationship between economic interest and the
need to apply the selected levers of influence, as
concepts that have a close legal nature, but
cannot be identified.
These concepts can exist and, accordingly, be
considered as:
a) those that are in a close relationship and exist
at the same time;
b) those that are in a close relationship, but do
not encourage the use of levers to achieve
economic consequences;
c) those that are in a close relationship, where
the need itself generates interest, the need
itself produces the emergence of economic
interest and the appropriate application of
those levers of influence that should ensure
economic interest.
The next relevant question is whether we can say
that the conscious understanding of the need
gives rise to the emergence of economic interest?
We do not see an unequivocal answer to this
question. After all, the realization of the need
(need) may not cause economic interest as a
result of the special (specific) state of the
subject's status and his social-psychological,
moral-ethical, and individual qualities. The
above may be determined both by the presence of
certain personal non-property rights of a natural
person - an entrepreneur and by personal non-
property rights of a legal entity - a business
entity, which is reflected in Article 94 of the Civil
Code of Ukraine (hereinafter - the Civil Code of
Ukraine) (Law 435-IV, 2003).
The opinion expressed by us brings us closer to
the understanding of the separation of economic
interest from a broader, but not emphasized, a
concept such as "economic interest". In this way,
economic interest can be underlying as a form of
expression. This confirms the opinion of A.I.
Ekimov, who says about interest as "a form of
expression, subjective perception of interest...
interest can exist without being expressed in
interest, but in this case, it does not play the role
of a conscious motivating factor" (Ekimov,
1984).
So, as we proved above, the socioeconomic
position of the business entity, and the stability
of its economic condition affects the realization
of economic interest and forms a complex of
legally significant actions that precede the
embodiment of economic interest in the objective
consequences of its realization. This not only
determines a certain legal composition of
objective facts characterizing the achievement of
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economic interest but also objectively affects the
very essence of the conflict of interests when
determining motivational decisions of a wide
range of their origin. Such decisions may be
based on the legal nature of the specifics of
certain types of contracts and be the basis of
concluded agreements. Also, such decisions can
be based on the peculiarities of the organizational
and legal form of the business entity and be taken
by the relevant management apparatus within the
existing powers.
As we can see, the position expressed by us
cannot always determine the economic and legal
nature of the proximity of economic interest and
conflict of interests as a possible derived legal
state.
As D.V. Tarikanov rightly claims, the conflict of
interests should be considered as a special case of
a more general phenomenon - the problem of
inconsistency of legal form and material content,
which manifests itself in the fact that legal
personality is split between several carriers due
to the inability of one of them to form a will from
an objective or subjective reason (Tarikanov,
2006). In judicial practice, there are also
conceptually correct attempts to define a conflict
of interest, although through the definition of an
agreement with an interest.
At the same time, assessing the legal nature of the
conflict of interests in the context of ensuring the
existing norms of different branches, it should be
noted that the subject and method of legal
regulation are different depending on branch
affiliation. Such features are determined by
codified laws related to the sphere of both private
and public law. If one analyzes the norms
contained in the civil, economic, labor,
administrative, and criminal codifications, as
well as the Code of Ukraine on bankruptcy
procedures, one should note the relationship and
mutual influence of the norms of inter-sectoral
direction and the objective influence of
convergent processes on the legislative initiative.
Conclusions
1. The conflict of interests was analyzed from
the point of view of economic science,
sociology, and psychology, and it was
deduced that today there is no single,
universally accepted definition of the
category "interest", since each science
considers the latter through the prism of its
own subject, object, methodology, goals,
and tasks.
2. It is summarized that the socio-economic
situation of the business entity and the
stability of its economic condition affects the
realization of economic interest and forms a
complex of legally significant actions that
precede the embodiment of economic
interest in the objective consequences of its
realization, which determines a certain legal
composition of the object objective facts that
characterize the achievement of economic
interest and objectively affect the very
essence of the conflict of interests when
determining motivational decisions of a
wide range of their origin.
3. It is summarized that the conflict of interests
can be characterized as a certain
psychological state of the subject who
"belongs" to such an interest for its further
implementation in the emergence, change,
or termination of certain legal relations, as a
confirmation of the existence of a legal fact.
As for further directions of research, it is
important to analyze the foreign experience of
legal regulation of conflict of interests in the field
of business.
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