A roundtable discussion dedicated to the 10th anniversary of the major transactions reform was held at the Presidential Research Center for Private Law. Representatives of government agencies, the courts, and practicing lawyers discussed the reform's results. The Counsel at Sirota & Partners Ekaterina Ivanova presented a report on the recent changes in the Supreme Court's positions and trends in judicial practice. Despite the fact that the law and Supreme Court Plenum No. 27 of 2018 require the simultaneous application of two criteria for a major transaction - a quantitative threshold of more than 25% of the book value of the company's assets and the qualitative impact of a transaction on the company's business - the Supreme Court's recent practice has accumulated a number of exceptions to these rules. Neither of these criteria is truly decisive. This position creates the risk that the court will recognize a transaction as major even if it does not meet the criteria specified in the law. This influences practices of real estate transactions - even the low price of property does not guarantee that the transaction will not be subsequently challenged as a major one. A presentation of the report with an overview of the recent court practice is available at the following link. The Center also posted a video recording of the roundtable.

Ekaterina Ivanova, counsel at Sirota & Partners and a lecturer at MGIMO, participated in a strategic session of the Federal Chamber of Advocates dedicated to the problem of parallel business. In practice, a company’s director or shareholders often misuse the company’s corporate opportunities and resources for personal gain, including creating and transferring businesses to parallel companies with affiliates. In such cases, the Supreme Court allows the shareholders of the affected company to recover damages from the director and parallel companies, including their earned profits. In her report, Ekaterina analyzed current issues in judicial practice on this category of disputes. Most often, courts reject plaintiffs’ claims if the amount of lost profits or revenue of the competing company is not proven, as well as due to problems with the evidentiary base or the expiration of the statute of limitations. Ekaterina highlighted possible ways to overcome these challenges and provided examples of successful practical cases. The presentation’s keynotes are available at the link. Details of the event are available at the link.

Artem Sirota, managing partner at Sirota & Partners, spoke as an expert at the professional forum “Time to Build”, organized by the Dispute Resolution Club. At the forum, experts shared their experience in structuring construction contracts and resolving construction disputes in international arbitration and state courts. Artem discussed the problem of “over-the-head lawsuits” in general contracting contracts in the context of multi-party arbitration proceedings. In his presentation, Artem addressed the issue of whether a contractor can file a claim directly against the construction owner, bypassing the general contractor, whether it is possible to jointly recover payment for work from the owner and general contractor, what evidence is required to do so, and what approaches are emerging in practice. Information about the forum is available at this link.