Advocates Bureau Yug Successfully Defended Major Metal Product Manufacturer of Russia

Advocates Bureau Yug Successfully Defended Major Metal Product Manufacturer of Russia

50% shareholder of the plant – one of the largest manufacturer of metal products in Russia — challenged the contracts of agency and supply of customer-owned raw materials concluded between the plant and one of its major suppliers. The shareholder considered these transactions invalid, as they were concluded with violation of requirements for large transactions and related-party transactions, as well as due to the abuse in rights by the supplier. The shareholder also requested to recover 1.4 billion RUB from the supplier as a restitution.

Advocates Bureau Yug represented the interests of the plant and the supplier in this case. We developed a legal position for our clients and represented their interests in the court of first instance. We highlighted that there are no grounds in this case for invalidation of transactions, since they are not large, and these transactions did not involve alienation of the plants property. Also, there were no mandatory sign of damage for invalidation of transactions as related-party ones. All the transactions gain economic profit for the plant as they as they save money for purchase of raw materials. Moreover, the plant receives agency fees under the transactions, as 1.4 billion RUB transferred by the plant to the supplier are the money received by the plant due to sale of metal products owned by the supplier. And as a result, this money belongs to the supplier, not the plant.

The Bashkortostan Republic Commercial Court agreed with our legal position and dismissed the claim fully on June 1, 2021.

Senior associate Sergey Radchenko and associate Ekaterina Fedenko represented both clients in the court.