The former counterparty of the client — one of the largest Russian manufacturers and suppliers of plumbing fixtures—filed a lawsuit seeking recovery of lost profits after the repudiation of their contract.
The contract included provisions allowing for unilateral repudiation upon 90 days’ prior notice from one of the parties. KIAP’s client decided to repudiate the agreement before its expiration of the contractual term, which the former counterparty claimed had caused him losses.
During the court proceedings the former counterparty insisted that the repudiated contract was an agency agreement and, therefore, could only be repudiated in compliance with the stipulated notice term.
KIAP lawyers conducted a detailed analysis of the contract’s subject matter and terms, subsequently developing a defense strategy. It was based on the argument that the disputed agreement had a mixed nature – combining elements of service contract and work contract. This approach demonstrated that the client's unilateral repudiation was not a subject to the restrictions applicable to agency contracts.
KIAP’s team asserted that the claimant had not suffered any lost profits as the repudiation was lawful, but the claimant had acted in bad faith.
The project was managed by Julia Paushkina, Attorney at law, Partner and Head of Commercial and Employment practices at KIAP, Dmitry Kazankov, Senior Associate, Elizaveta Fedulova, Associate, Rustam Bolshakov, Junior Associate, and Artem Gritsuk, Junior Associate.