The private investor (claimant) had structured the ownership of Russian securities through a foreign fund and a foreign nominee holder. Subsequently, lengthy liquidation proceedings were initiated concerning the foreign fund which have yet to be completed. Prematurely assuming the foreign fund's liquidation, the claimant, as the fund's beneficiary, filed a claim with the Russian court demanding the transfer of rights to the Russian issuers' securities owned by the fund as if it had already been liquidated and the rights to the securities had already been vested in the claimant.
Despite attempts by the opposing party to frame the dispute as being related to foreign sanctions (an argument that inherently tends to favor claimants in the current legal climate), we managed to persuade the court that the resolution of the dispute fell under the purview of civil/corporate law and was actually subject to the counter-sanctions protective measures adopted by the Russian authorities. In forming the grounds for the dismissal of the claim, we posited that the fund's liquidation had not been completed, the fund's liquidator had requested for the assets not to be transferred pending its specific instructions, and that the claimant, being an EU citizen, could not directly own “strategic” Russian securities (only via Type C accounts).
The courts of three instances upheld our client's position. Furthermore, the Supreme Court of the Russian Federation recently published a ruling refusing to grant leave to the claimant's cassation appeal, which provided a highly detailed account of all the arguments justifying the legality of the lower courts' decisions – a level of detail that is relatively uncommon in rulings of the Supreme Court when denying review.
The project team, led by Evgeny Oreshin, Partner, Dispute Resolution Practice, included Senior Associates Yury Knyazev and Daria Atamanova.