Case Description
For about 20 years, a Swiss company has been supplying refractory materials and products to two Russian companies from a large Russian group in the metallurgical industry. The 2022 has made its own adjustments to the relationship between the parties. The buyers refused to pay under the contracts, referring, among other, to sanctions.
Legal Challenge
KIAP's client, a Swiss insurance company, paid an indemnity to the Swiss supplier under commercial risk insurance and thereby acquired the rights of claim against the Russian companies. With the help of KIAP lawyers, the client initiated two parallel arbitration proceedings under the rules of the ICAC for the recovery of the debt. The proceedings were conducted as "coordinated" arbitrations, where the tribunals were partially constituted of the same arbitrators.
Approach and Outcome
On the merits, the buyers initially denied the existence of the debt, and later referred to force majeure caused by the sanctions. At the same time, even though that Swiss law applied to the relations between the insurance company and the Swiss supplier, KIAP lawyers substantiated to the arbitrators that Russian law applies to the relations between the buyers and the insurance company in terms of subrogation and recognition of debt, while the Vienna Convention on Contracts for the International Sale of Goods of 1980 applies to issues arising from supply contracts.
After oral hearings in both cases, KIAP lawyers managed to convince the debtors to sign settlement agreements on the terms developed by KIAP lawyers for rendering arbitral awards on the agreed terms and to pay the full amount of the debt.
Currently, KIAP’s client is obtaining a license from the foreign regulator to receive the awarded and already received by KIAP funds.
Team
The client in these cases was represented by Partner Stepan Sultanov, Partner Konstantin Astafiev, Associate Anastasiya Ryabova, Associate Nikita Zabegaev, Junior Associate Artem Gritsuk.