Aspirants docked at the Government. The sale of the Arkhangelsk trawl fleet was contested in the HCA

"Kommersant" newspaper, №186 (5217), 11.10.2013
The sale of the Arkhangelsk trawl fleet (ATF), the holder of the largest quotas for fishing cod and haddock, may be contested. One of the claimants to the company filed a suit against the Government of the Russian Federation with the Higher Court of Arbitration (HCA), demanding that the criteria of selection of the potential purchaser be ruled invalid. Lawyers believe that, as a result, the sale of the ATF may be delayed indefinitely or cancelled completely.
The site of the HCA announces the acceptance of the claim moved by the Murmansk Fish-processing Plant OJSC for consideration. The plant is one of the aspirants to the purchase of 100% of the ATF, the shares of which are to be alienated form the state property by the end of the year. The Murmansk Fish-processing Plant contests the Regulations on holding the open procedure of alienation of the shares of the fleet, believing that the Regulations contradict the Competition Protection Law. In particular, the limitation on the proceeds of the potential buyer (at least 500 million roubles per year) is against the law, as well as the alienation of the shares outside the public auction procedure (tenders, auctions).
Gazprombank is indicated as the third party to the claim – it has been authorized by the Government of the Russian Federation as the agent for privatization of the ATF.
Mikhail Zub, General Director of the Murmansk Fish-processing Plant, was unavailable for comments yesterday. However, a source informed of the claim’s content revealed that the company’s main objections concerned the clause of the Regulations, according to which “the seller decides on the alienation of the shares to the benefit of a certain procedure participant on its exclusive discretion, on the base of a battery of any criteria, including the price of the initial or the final offer”.

As Kommersant has already informed (see the issue dated September 9), the Government of the Russian Federation has recently approved the conditions of alienation of 100% shares of the fleet from the state property that Gazprombank suggested. The ATF has practically been taken out of the sphere regulated by the Privatization Law; the form of alienation from the state property without tender or auction was chosen for the selection of the purchaser.

21 fishing ships and infrastructure, including a fish-processing plant, compose the ATF. The company is the holder of the largest cod and haddock fishing quotas. “Russian Sea Extraction” (RMD; same shareholders as “Russian Sea” public company – Maxim Vorobiev and Gleb Frank – but not a member of the group), VIRMA LLC (founder – SZRK LLC), Robinson OJSC (Murmansk), Meridian OJSC, “ATF Northern Investments” (a company of the ATF management and the UCP Fund of Ilya Scherbovich) obtained the FAS approval for the purchase of the ATF. The ATF generated 3,44 billion roubles of proceeds in 2012, net profits – 32,9 million.

Potential competitors refused comments on the case yesterday. Some of them unofficially acknowledge that the lawsuit may cause the delay of the sale and even its complete cancellation.

Yury Dobronravov, head of the firm “Dobronravov and Partners” says: “The procedure may only be suspended, if the judge passes the respective judgment before the final offer of alienation of the ATF shares (scheduled for November – “Kommersant”), since revocation and re-holding of the tender is much more difficult”.

Evgeny Zhilin, Partner of the Law Firm "YUST", points out: “This is a rare situation. Such matters are usually contested via the Federal Antitrust service. Here, a normative act of holding a tender, adopted by the Government, is contested, which does not happen often”. He believes that the Murmansk Fish-processing Plant has a chance to prove that the alienation of the ATF shares is not transparent, even though it is formally beyond the scope of the Privatization Law. Oleg Ponamarev, managing partner of the DS Advocates’ Bureau, thinks that the case is hard to prognosticate, not mainly because the HCA “will hardly interpret the governmental decisions against the State”, but rather due to the latest changes concerning the practical liquidation of the HCA (for more details see “Kommersant” dated October 9 and 10). O.Ponamarev is convinced: “It is hard to even discuss whether the court will be formed and new judges appointed within some reasonable period”.