Distribution Agreements In Russia

Distribution agreement is not a concept that is well-developed in Russia. There is not an established court guidance on most of the terms and conditions a reasonable non-Russian supplier seeks to include into the distribution agreement. It is common practice that a non-Russian investor is seeking to (i) fix the sale price and (ii) include territorial and customer restrictions in a distribution agreement with its Russian partner (which is not within its group). The Russian laws and court practice are not favorable to such terms and conditions.

1. Fixing the sale price

Fixing the sale price at which the distributor is required to distribute products is prohibited by Russian antitrust law. However, Russian antitrust law explicitly allows the supplier to specify the maximum sale price for products, which could be a feasible solution.