When two years ago Korelskiy, Ischuk, Astafiev and Partners, Attorneys at Law was approached by an international commercial firm, Quelle, seeking assistance, not a lot of people thought the project could be successful since frequent court precedents that had been created prior to that were not exactly favourable to the client.
The claim of the customs agency can be summarized in a form that the customs value of the imported goods used to calculate the volume of the customs duties did not include a license fee paid by the client to the rightholders for the right to use their trademarks. For Quelle such claim by the customs authorities came completely unexpected as, they thought, such fee had nothing to do with the goods being supplied and was not a pre-condition for sale. It is these two conditions that trigger the possibility of further charges with respect to the use of the intellectual property items, in addition to the customs value of such goods.
On initial stages of case review the lawyers from the Law Firm managed to convince the judges of the first instance and the instance of appeal in the validity of their approach. However the court of cassational appeal revoked the judgements of these courts and sent the case for further review, with a comment that it is these two conditions specifically that are not intended to directly follow from the term of the license agreement and supply agreement while the mere fact of the licence payment and supply of goods shall be sufficient with respect thereto.
Nevertheless, the lawyers of the Law Firm were able to once again convince the judges of the first instance and the instance of appeal to support their view, and the actions of the customs authority were deemed unlawful, in corpore, for the second time.
During the second-phase hearing on the case the Federal Arbitration Court for the Central District also supported the view submitted by KIAP's experts and reversed its initial opinion on this case with an exception for certain minor requirements of the customs agency where the rulings of the subordinate courts have partially been reversed.
Therefore, the risk of unwarranted assessment with multimillion customs duties has been eliminated, and an important precedent was added in terms of judicial enforcement approach supporting the view that payments for the use of intellectual property items are to be included in the customs value of imported goods only in those events that have been directly outlined under the law.
We also remember that earlier, in 2011, KIAP legal experts achieved a similar result on the level of the Federal Arbitration Court for the North-West District, case А44-3558/2010.
Managing Partner Andrey Korelskiy said commenting on the results of the project: “Ilya Ischuk and his team of customs experts have done truly immense work on this case having achieved a small-scale rebellion as it applies to judicial practice in two cassational judicial districts. I am sure that this will have positive impact on uniformity of judicial practice for similar cases in the future. I hope that sooner or later the High Arbitration Court of the Russian Federation will provide its competent opinion on this matter and this will allow creating established legal positions, both for the lawyers and business entities involved in import activities, with respect to this matter with full certainty.”