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Experts of the CCI of the Russian Federation on amendments to the Federal law «On concession agreements»

20 February 2014 in Moscow in commercial and industrial chamber of the Russian Federation held a joint meeting of the RF CCI Committee on state and private partnership and the RF CCI Committee on investment policy on a theme «Practice of application of concession agreements on the territory of the Russian Federation. Prospects for the modification of legislation on concessions».

The meeting was attended by members of the presidential Administration, specialized ministries (Ministry of transport of the Russian Federation and the Ministry of economic development of the Russian Federation), as well as representatives of private investors, consulting structures and leading law firms, specializing in the implementation of projects in the field of state-private partnership.

Law firm «YUST» was represented by its partner, advoсate, Dr. Jur Anna Kotova-Smolenskaya and associate Dmitry Zhubrin.

During the meeting, the experts discussed the results of the research «Practice of application of concession agreements on the territory of the Russian Federation», conducted by the Centre for development of PPP together with the RF CCI Committee on public-private partnerships, and the project of amendments in the Federal law of 21.07.2005 № 115-FZ «On concession agreements», prepared by the Russian Government.

The meeting participants stressed the importance of the work done on studying and summarizing the material on the practice of concession agreements in Russia.

The bill on amendments to the Federal law «On concession agreements» received a positive evaluation from both government and private sector representatives and specialists. The proposed changes are long overdue, and the purpose of adoption is to extend the scope of application of concession agreements and creation of favorable conditions for attracting private investments.

The amendments provide additional guarantees of concessionaire, the possibility of concluding a concession agreement on the initiative of the private investor, the replacement of the concessionaire without competition, as well as a number of other important changes.

Despite the generally positive comments were made, and some critical comments on individual provisions of the bill.

So, in particular, the experts expressed doubt about the feasibility of the draft law on prohibition of the concessionaire in the implementation of activities stipulated by the concession agreement, to sell the goods produced, works, services on a reimbursable basis, if the concession agreement contains a provision on the Board of the grantor. According to specialists, this restriction creates unjustified barriers to the concessionaire in obtaining additional income from the use of the object of the concession agreement.

Anna Kotova-Smolenskaya, in his speech is also proposed to give the parties to the concession agreement more choice of the method of consideration of disputes by the concession agreement. This proposal due to the fact that the Federal law «On concession agreements» allow consideration of disputes only in the state courts or arbitration courts of the Russian Federation, but does not contain the possibility of transmitting of the dispute to the international court of arbitration courts (arbitration), outside Russia, which prevents foreign investors from participating in these projects.

In addition, it was suggested in more details to specify the procedure of consideration by the grantor of the requirements of the concessionaire to change the material terms of the concession agreement. Experts also drew attention to the need to improve the procedure for conclusion of concession agreement at the initiative of the private investor.

Following the meeting of the Trade and industrial chamber of the Russian Federation will be prepared comments on the draft law taking into account all remarks and proposals of the experts.

With the text of the discussed draft law № 449127-6 can be found at the link.

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