KIAP Has Successfully Completed the Dispute Heard by the RF Presidium of the High Arbitration Court, While Acting on behalf of EuroChem

On March 13, 2012, a session of the Presidium of the High Arbitration Court of the Russian Federation was held for the hearing of the arbitration case  related to the issue of application of Articles 450 and 452 of the Civil Code of the Russian Federation. The Judges of the High Arbitration Court who have referred the matter to the Presidium of the High Arbitration Court shared position of the EuroChem’s attorneys that transactions may imply conditions of unilateral termination thereof should one of the parties fail to comply with the undertaken obligations. The same view was upheld by the members of the Presidium of the High Arbitration Court who revoked all previous court rulings on this matter.

In addition to this case importance to the legal community in terms of the civil law, the matter is also very important for businesses in terms of development and popularization of application of the Russian corporate law on the stage of acquisition or sale of the Russian assets.  In its essence, the dispute was not just about application by the parties of the norms of the Civil Code but also the laws on limited liability companies with respect to undertaken transactions. Therefore, in the event if the Presidium of the High Arbitration Court had left existing court rulings unchanged, this would have once again caused further damage to the image of the Russian corporate law application standards as perceived by both the Russian and foreign investors, where compared to the norms of the Common Law such corporate law application process is viewed as imposing serious restrictions on the parties’ freedom and compliance with warranties for transactions that involve the assets of both publicly traded or non-publicly traded companies.

The Head of the Legal Department of EuroChem Valery Sidnev said while commenting on the results achieved:  “The lawyers of the Law Firm have shown excellent theoretical knowledge of the civil and corporate laws and were able to professionally apply such knowledge in their actual work, having therefore created for our company and for the entire market new additional opportunities to protect interests in the disputes of such nature.”

The declaration part of the Ruling of the Presidium of the High Arbitration Court will be issued shortly and may become the next precedent-creating legal act for all subordinate courts in the Russian arbitration system working on the matters in similar domains of law.

With respect to this matter the client was represented by the lawyers Julia Sergeeva and Andrey Korelskiy.

The video of the court session may be watched here.