The Law Firm "YUST" successfully defended the investor’s interests in the Supreme Court of Russia in a dispute against the Government of Moscow

The session of the Judicial Board on economic disputes of the Supreme Court of Russia has taken place today. The Board repealed the resolution of the Court of Arbitration of the Moscow District dated November 7 of 2014 and left in force the judgments of the first and second instance arbitration courts. Those judgments upheld the investor’s claim towards the Government of Moscow to recover direct expenses and interest for the amount exceeding 90 million roubles caused by the cancellation of a construction project in the territory of the city of Moscow (case № А40-52211/12-16-485).

The complexity of this dispute was due to the fact that the courts differed in their qualification of the parties’ relations under the agreement between the investor and the Government of Moscow. In particular, the courts of the first and second instance in the course of the initial consideration of the case concluded that the agreement contained no elements of an investment agreement, and dismissed the investor’s claims on those grounds. The cassation instance did not agree with such position of the courts and repealed their judgments, remitting the case for re-consideration. It also pointed out that the agreement actually contained the investment element.

In the course of the re-consideration, the first and second instance courts agreed with the position of the cassation instance court regarding the investment nature of the agreement and upheld the investor’s claim. However, the cassation instance court reversed its position, repealed the judgments of the lower-level courts and fully dismissed the investor’s claim.

In such circumstances, the investor was forced to seek protection of their rights with the supreme judicial instance – which ruled the investor’s position founded.

Partner of the Law Firm "YUST" Anna Kotova-Smolenskaya and senior Associates of the firm Ekaterina Motyvan and Andrey Kornitsky represented the interests of the investor in the dispute.