Accounting and legal services

Food industry

Client’s annual revenues: RUB 2 bln

The services are provided within the package fee arrangements. Our lawyers handle all client’s litigation in Russia: about 60 cases per year on average. In addition, we are responsible for legal review of the company’s contracts and other documents and prepare overviews on legislative updates. We also manage KYC processes on a daily basis.

Compliance services for a public company

Wholesale trade

RUB 6 mln in overpaid tax

After having analyzed the client’s books, we found errors in calculating VAT on the advances received. We sent corrective tax returns, accompanied the client in negotiations with the tax office and obtained a refund of overpaid taxes.

Over several reporting periods, the client refunded RUB 6 mln in overpaid VAT.

VAT refund

Energy-efficient technologies

RUB 260 thou

We were approached by a client who had been sanctioned by the tax inspectorate for a tax offense.

The financial sanctions (fines) might have been imposed as a percentage of the unpaid tax amount or as a fixed amount.

The originally iposed fine was RUB 300 thou, but after TEAM experts proved their position to the authorities, they reduce the fine thus the client saved RUB 260 thou

Reduction of fines

Client’s annual revenues: RUB 500 mln

Technological production

Outsourcing and internal control

The client’s group of companies is involved in various businesses and has a complicated shareholders structure, which includes partners responsible for everyday management, financial investors and foreign participants — holders of IP.

We perform functions of the legal and accounting departments with a focus on mitigation of operational risks, proper fulfillment of obligations, compliance with internal regulations and balancinge of the shareholders' interests.

Industry

EUR 4.7 mln

Our client was a defendant in a dispute over the return of unjustified enrichment in the amount of EUR 4.7 mln. The plaintiff claimed that the defendant had not returned the money paid by the plaintiff under a terminated contract. Objecting to the plaintiff's statements, we pointed out that under the terms of the supplementary agreement on termination of the contract, the parties had no financial claims against each other, and the amount to be returned by the defendant under the supplementary agreement had been paid to the plaintiff. The plaintiff submitted a different version of the agreement, the original was missing on both sides.
During the case, the arbitration clause was challenged (Stockholm International Arbitration Institute) and the request for consideration of the case under the substantive law of Finland was granted.

We examined and used as evidence the email mailbox inspection protocols, expert opinions on the interpretation of Finnish law and expert opinions on documents fabrication. After 2.5 years in hearings, the court of first instance dismissed the claim and the decision was upheld in appeal.

Foreign businesses tend to leave Russia now. Due to the bad faith acts of the plaintiff, a situation could have arisen when our client, a large and well-doing foreign company, might have considered close down of its activities in Russia. We realized how important the case was and made every effort not only to defend the plaintiff's interests, but also to prove that it is possible to conduct fair business in Russia.

Defense of a foreign company in a dispute over unjustified enrichment

RUB 118 mln

Industry

A foreign company sold a Russian subsidiary that owned a plant in St. Petersburg. Before the closing of the deal the plant’s CEO, acting in line with the shareholder’s insrtuctions, had liquidated of and sold off part of the stock that had not been included in the deal. After the closing and the change of the company’s sole shareholder, to the buyer, the CEO was dismissed.

After the closing, the target company filed a lawsuit against our client to recover more than RUB 118 mln in damages. The plaintiff argued that the CEO should have acted in the interests of the company, rather than the shareholder, and referred to the position of the Supreme Court of the Russian Federation that the CEO is not exempt from liability even if he implemented the shareholder’s decision. The court practice on disputes of this kind had not been established, and our case became a precedent.

We proved that the stock was liquidated of precisely in the context of preparing for the sale of the company, and a failure to do so would have caused losses to the company; we also challenged the composition and calculation of losses.

The court agreed with our arguments and confirmed that the CEO had acted in good faith and in the interests of the company.

Timber industry

Disputed amount: RUB 53 mln

Our client delivered goods for a Finnish company to the port of St. Petersburg, but due to transport restrictions the buyer was unable to remove the goods from the port. Under the contract, our client's obligation to deliver the goods was considered fully discharged at the moment the goods were transferred to the port.

We studied the issue of rearrangement of supply routes, accompanied the process of changing the terms of the contract, changing the terms of delivery and method of transportation, and also negotiated the contract amendment.

Under the next specification, the cargo was delivered by road.

There was a dispute between the parties on the issue of deliveries to the port, in which we represented the client's interests and proved that the cargo had been delivered properly and all obligations had been discharged.

The court agreed with our arguments and ordered the counterparty to pay for the goods.

Development of supply routes

RUB 100 mln — annual client turnover

Technological production

Cooperation with European partners

Our client supplies components from EU countries and manufactures watches in Russia using the trademark of a Swiss company. The commercial concession agreement expired in the fall of 2022. We have registered a new license and sublicense agreement, thus extending the right of the client and its partner to use the international trademark.

After the treaties on avoidance of double taxation have been suspended, we advised the client on the ways of paying dividend and royalties.

We also advised the client on matters related to supply of components, worked out new logistic tracks, terms of cooperation with partners from outside the EU and supported interaction with banks and tax authorities for international payments.

As a result, the client is able to maintain its stock of components crucial for the production, as well as the right to use the trademark and therefore may continue its business in Russia.

Due dillgence of clothing store chain

Retail trade

A large chain of retail clothing stores approached us with a request for the corporate restructuring to optimize taxation, while remaining within the legal framework and avoiding unjustified business fragmentation.

We analyzed the current state of affairs and developed recommendations for the corporate restructuring, which affected both legal entities and private entrepreneurs within the group, with a focus on economic rationale. Further, we developed a structure when each group member would have its specifically assigned role. The project also included advice on proper registration of the use of trademarks, the rights to which belong to particular individuals, yet they are used by all members of the group.

In the outcome, the client received comprehensive restructuring guidelines and optimized its taxes without a risk of being made liable for unjustified business fragmentation.

Precedent case

RUB 260 thou

After the death of an individual entrepreneur, the tax advance payments made by him turned into overpaid tax, as the final tax return for the previous year had not been filed, while advance payments are not qualified for taxes as suchbut only after the filling of the final tax return.

The tax office refused to refund the overpaid tax to our client, as the law does not provide a mechanism for its refund to the taxpayer’s heir.

We represented the interests of the taxpayer’s spouse and filed a lawsuit to include the amount in the inheritance estate and have it paid to the client. We have proved that, by analogy with the income tax allowances, advance payments should be included in the inheritance estate as assets.

The case went throught two appeal and two cassation instances, and by the final court decision the amount of overpaid tax was included in the inheritance estate in full.

The case allowed to formulate a judicial practice on reimbursement of overpaid tax to taxpayer’s heirs, while the client received their money.

Tax refund to the heir

Construction and real estate

A major M&A deal 2023

We represented the seller, a foreign holding company, in the sale of its hotel business in Russia. The chain included 10 hotels in St. Petersburg, Moscow, Murmansk and Yekaterinburg. The total number of rooms is 4,078 units, the transaction amount is over EUR 200 mln.

The transaction involved the sale of all hotels, and it included both privatized companies and newly established ones, each with its own characteristics, which required additional preparation before the transaction.

We developed the structure of the transaction, drafted transaction documents, coordinated operations of the hotel services and the hotel operator, as well as followed-up settlement under the transaction.
The transaction is the largest M&A deal in the Russian hotel real estate market ever.

Withdrawal from the market

EUR 90 mln

Logistics

Business expansion

Our client acquired a transportation company — part of the Finish national railroad operator.

The deal took almost a half-year, during which we developed preliminary and main share purchase and sale agreements and conducted due diligence on the target company and its Russian subsidiaries.

Following the deal, our client has become one of the largest companies in the logistics market between Russia and Finland.

Business centers

Largest M&A deal in St. Petersburg office market 2023

Representing the Finnish construction company EKE in the sale of a share of the authorized capital in the Russian company that owns the Class A business center Pulkovo Sky in St. Petersburg to the Armenian fund Balchug Capital.

Investment

EUR 200 mln

Real Estate/HoReCa

Sale of business

Representing the Norwegian company Wenaas Group in the sale of its hotel business in Russia, which includes six hotels in St. Petersburg (among them Park Inn by Radisson Pribaltiyskaya, Park Inn by Radisson Pulkovskaya and Park Inn by Radisson Pulkovo Airport), two in Moscow (Park Inn by Radisson Sheremetyevo, Radisson Blu Sheremetyevo Airport), as well as hotels in Murmansk and Yekaterinburg.