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Almaty, Kiev, Moscow

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AstapovLawyers protects the interests of Dymov Sausage Production

February 2011

08.02.2011 - AstapovLawyers have protected the interests of Dymov Sausage Production (Dymov) in a dispute initiated before the Moscow Arbitration Court for the collection of interest of over RUR 18,000,000 in favour of our client. The defendant in this case was Campomos, a meat processing plant.

The dispute was about a preliminary agreement between our client and the defendant for the sale of a real property including an unauthorised addition. Dymov made a guarantee payment under the agreement. In turn, Campomos undertook to register the property title subject to the unauthorised addition and thereafter our client and the defendant were to make a master sale and purchase agreement. But Campomos failed to register the title to the whole building, whereupon Dymov acting entirely lawfully refused to perform the preliminary agreement.

AstapovLawyers designed an effective strategy that enabled our client to recover the interest accrued on the money. The legal reason for the recovery was the fact that the subject matter of the preliminary SPA with Campomos had been the unauthorised addition. The Russian Civil Code places unauthorised additions outside the scope of civil transactions. Accordingly, the preliminary SPA for the real property including the unauthorised addition was null and void.

The Court relying on those principles as well as the general provisions of Russia’s civil law and public policy saying that unauthorised constructions may not be subject to any rights and obligations held the preliminary agreement between our client and Campomos null and void and applied the aforesaid effects of voidness, i.e. it collected the interest and repaid the guarantee payment made by our client to Campomos under the preliminary SPA.

“We believe that the award is legal and meets the general principles of Russia's law and public policy. It would be very wrong if the Russian court practice allowed certain parties make properties, which are excluded from civil transactions, subject to their rights and obligations. Sure, the legal handling of unauthorised construction is always complicated. It always triggers a lot of disputes and controversies. Yet, the law expressly says that any unauthorised addition goes outside the scope of civil transactions. So, it should be understood that unauthorised additions pose certain risks for those who make them. For example, they are in no position to sell, let on lease or gift them. We think that the award is absolutely fair and adequate in this case”, commented AstapovLawyers’ Counsel Oleh Beketov.

The case has been handled by AstapovLawyers’ Dispute Resolution Practice team, in particular by Managing Partner Andrey Astapov, Counsel Oleh Beketov and Senior Associate Oleh Gromovoi.

It should be noted, however, that the aforesaid award of the Moscow Arbitration Court is a first-tier award. The award was granted after the Federal Arbitration Court of the Moscow District cancelled the first-tier and appellate judgments which had allowed the claim of our client to the extent of the recovery of its guarantee payment, but rejected the collection of interest.  Given the nature and significance of the dispute, it is not unlikely that it will also be heard by appellate and cassation courts.
For more information, please contact Elena Karchova, PR Director, AstapovLawyers: +38 (044) 490 70 01,

AstapovLawyers International Law Group is one of the leading full service Law Firms in Ukraine, Russia and Kazakhstan. The company is ranked among TOP-10 law firms and is recognized by such respected international industrial publications as Corporate INTL Magazine, Who’s Who Legal, Legal 500 and others. Particularly in 2010 AstapovLawyers was chosen as the winner of the Corporate INTL Magazine Global Award “Dispute Resolution Advisory Firm of the Year in Ukraine” and “Competition Law Advisory Firm of the Year in Russia”. The firm employs over 80 high qualified professionals in its offices in Ukraine, Russia and Kazakhstan. Firm's key clients include agro companies Glencore, Soufflet Negoce SA, Bunge, Valars Group, EFKO, Mriya, United grain company, alcohol holdings  Nemiroff, Soyuz-Victan, banks Raiffeisen Zentralbank, Cesci Komerzi Bank, Rodovid Bank, pharmaceutical companies Bayer, Metagenics, Optima pharm, telecom companies CDMA, Jump Ukraine/Beeper, Huawei, metallurgical companies ThyssenKrupp SA, Ferrexpo/Vorskla Steel, DEMZ, EMSS – Energomashspetsstal, and companies Danone/Nutricia, Avery Dennison, Detskiy Mir, Perdue Farms, China National Oil Corporation, Energoatom and others. More information about the firm is available at .


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