The US and Swiss oil trading companies, represented by KIAP, faced hardship and force majeure circumstances performing their contractual obligations before the largest Russian petrochemical companies and foreign terminals. KIAP lawyers secured settlement of all the disputes.
In 2022, the Clients failed to perform the obligations to purchase the goods from the Russian suppliers, as well as the ‘take-or-pay’ obligations before foreign terminals due to sectoral sanctions and their consequences. Several contracts at stake set forth serious liability for non-performance, including a penalty that reached up to 50% of the value of the goods not purchased from the supplier, as well as a compensation that could reach up to 100% of the value of the terminals’ reserved capacity. The contracts provided for arbitration under the rules of three major European and Russian institutions – the ICC, SCC, ICAC at the RF CCI.
Since March 2022, KIAP lawyers were involved in negotiations and the exchange of claims, which were based on the prepared by KIAP legal opinion covering all relevant cases since 2014. As a result, the suppliers agreed to settle over all the contracts at stake. The settlement agreements signed by the suppliers relieved the Clients from the liability under the not performed contracts. As for the disputes that arose with the foreign terminals, settlement was also secured on the Clients’ terms.
The Clients were represented by Stepan Sultanov, Head of Projects of the International Commercial Arbitration Practice, Sergey Ilin, Senior Associate, Alexander Kartashov, Associate, Anastasiya Ryabova, Junior Associate, and Ilya Dedkovskiy, Head of Bankruptcy Practice.