diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/NewOverloadingConflictResolver.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/NewOverloadingConflictResolver.kt
index e335398f03f..6c34dc17a2f 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/NewOverloadingConflictResolver.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/NewOverloadingConflictResolver.kt
@@ -38,8 +38,9 @@ class NewOverloadingConflictResolver(
         builtIns,
         specificityComparator,
         {
-            (it as? VariableAsFunctionKotlinResolutionCandidate)?.invokeCandidate?.descriptorWithFreshTypes ?:
-            (it as SimpleKotlinResolutionCandidate).descriptorWithFreshTypes
+            // todo investigate
+            (it as? VariableAsFunctionKotlinResolutionCandidate)?.invokeCandidate?.candidateDescriptor ?:
+            (it as SimpleKotlinResolutionCandidate).candidateDescriptor
         },
         { SimpleConstraintSystemImpl(constraintInjector, typeResolver) },
         Companion::createFlatSignature,
@@ -72,7 +73,6 @@ class NewOverloadingConflictResolver(
             return FlatSignature.create(candidate,
                                         originalDescriptor,
                                         numDefaults,
-                                        listOfNotNull(originalDescriptor.extensionReceiverParameter?.type) +
                                         simpleCandidate.kotlinCall.argumentsInParenthesis.map { valueArgumentToParameterType[it] } +
                                         listOfNotNull(simpleCandidate.kotlinCall.externalArgument?.let { valueArgumentToParameterType[it] })
             )
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/SimpleConstraintSystemImpl.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/SimpleConstraintSystemImpl.kt
index 08f5afdd7a1..b487b3edcb6 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/SimpleConstraintSystemImpl.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/SimpleConstraintSystemImpl.kt
@@ -18,15 +18,12 @@ package org.jetbrains.kotlin.resolve.calls.inference.components
 
 import org.jetbrains.kotlin.descriptors.TypeParameterDescriptor
 import org.jetbrains.kotlin.name.Name
-import org.jetbrains.kotlin.resolve.calls.model.KotlinCallKind
 import org.jetbrains.kotlin.resolve.calls.inference.ConstraintSystemBuilder
 import org.jetbrains.kotlin.resolve.calls.inference.model.NewConstraintSystemImpl
 import org.jetbrains.kotlin.resolve.calls.inference.model.SimpleConstraintSystemConstraintPosition
 import org.jetbrains.kotlin.resolve.calls.inference.model.TypeVariableFromCallableDescriptor
-import org.jetbrains.kotlin.resolve.calls.model.KotlinCall
-import org.jetbrains.kotlin.resolve.calls.model.KotlinCallArgument
-import org.jetbrains.kotlin.resolve.calls.model.ReceiverKotlinCallArgument
-import org.jetbrains.kotlin.resolve.calls.model.TypeArgument
+import org.jetbrains.kotlin.resolve.calls.inference.substitute
+import org.jetbrains.kotlin.resolve.calls.model.*
 import org.jetbrains.kotlin.resolve.calls.results.SimpleConstraintSystem
 import org.jetbrains.kotlin.types.TypeConstructorSubstitution
 import org.jetbrains.kotlin.types.TypeSubstitutor
@@ -45,7 +42,13 @@ class SimpleConstraintSystemImpl(constraintInjector: ConstraintInjector, resultT
 
             it.defaultType.constructor to variable.defaultType.asTypeProjection()
         }
-        return TypeConstructorSubstitution.createByConstructorsMap(substitutionMap).buildSubstitutor()
+        val substitutor = TypeConstructorSubstitution.createByConstructorsMap(substitutionMap).buildSubstitutor()
+        for (typeParameter in typeParameters) {
+            for (upperBound in typeParameter.upperBounds) {
+                addSubtypeConstraint(substitutor.substitute(typeParameter.defaultType), substitutor.substitute(upperBound.unwrap()))
+            }
+        }
+        return substitutor
     }
 
     override fun addSubtypeConstraint(subType: UnwrappedType, superType: UnwrappedType) {
@@ -53,6 +56,7 @@ class SimpleConstraintSystemImpl(constraintInjector: ConstraintInjector, resultT
     }
 
     override fun hasContradiction() = csBuilder.hasContradiction
+    override val captureFromArgument get() = true
 
     private object ThrowableKotlinCall : KotlinCall {
         override val callKind: KotlinCallKind get() = throw UnsupportedOperationException()
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignature.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignature.kt
index 0e3957b42a0..9e06407887e 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignature.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignature.kt
@@ -24,6 +24,7 @@ import org.jetbrains.kotlin.descriptors.synthetic.SyntheticMemberDescriptor
 import org.jetbrains.kotlin.resolve.descriptorUtil.hasDefaultValue
 import org.jetbrains.kotlin.types.*
 import org.jetbrains.kotlin.types.checker.KotlinTypeChecker
+import org.jetbrains.kotlin.types.checker.captureFromExpression
 
 interface SpecificityComparisonCallbacks {
     fun isNonSubtypeNotLessSpecific(specific: KotlinType, general: KotlinType): Boolean
@@ -95,6 +96,9 @@ interface SimpleConstraintSystem {
     fun registerTypeVariables(typeParameters: Collection<TypeParameterDescriptor>): TypeSubstitutor
     fun addSubtypeConstraint(subType: UnwrappedType, superType: UnwrappedType)
     fun hasContradiction(): Boolean
+
+    // todo hack for migration
+    val captureFromArgument get() = false
 }
 
 fun <T> SimpleConstraintSystem.isSignatureNotLessSpecific(
@@ -125,7 +129,16 @@ fun <T> SimpleConstraintSystem.isSignatureNotLessSpecific(
         }
         else {
             val substitutedGeneralType = typeSubstitutor.safeSubstitute(generalType, Variance.INVARIANT)
-            addSubtypeConstraint(specificType.unwrap(), substitutedGeneralType.unwrap())
+
+            /**
+             * Example:
+             * fun <X> Array<out X>.sort(): Unit {}
+             * fun <Y: Comparable<Y>> Array<out Y>.sort(): Unit {}
+             * Here, when we try solve this CS(Y is variables) then Array<out X> <: Array<out Y> and this system impossible to solve,
+             * so we capture types from receiver and value parameters.
+             */
+            val specificCapturedType = specificType.unwrap().let { if (captureFromArgument) captureFromExpression(it) ?: it else it }
+            addSubtypeConstraint(specificCapturedType, substitutedGeneralType.unwrap())
         }
     }