A foreign company delivered goods to a Russian purchaser without drawing up the contract properly, and as a result, received only part of the payment due.
The Chinese company LINYI DONGCHENG FOODSTUFFS, one of our clients, suffered from the actions of a dishonest partner. The Russian purchaser did not pay in full for the goods delivered. The case was considered in the Moscow Arbitration Court. It was established that the contract was signed on behalf of the Russian company not by the managing director, but by the head manager, who did not have the authority to conclude contracts. And the Chinese partners did not have the original of the contract in their possession, since the contract itself was sent to them by email.
It is necessary to resort to the services of lawyers who practise in the country in which the business is conducted.
By that time, our client was ready to wash his hands of the matter, realizing that he had simply been deceived. However, in the court proceedings, we built the defence of his interests on the position that all the significant terms of the contract had been observed, and the will of the Russian company to purchase the goods had been expressed by its acceptance of the goods on the consignment note, and by the partial payment for them. As a result, the arbitration court issued an order for the recovery from the purchaser of all the unpaid sum, legal expenses, court costs and interest for use of cash assets. The Russian company did not appeal against the decision of the arbitration court. They hadn’t a leg to stand on, as they say.It follows from this that for the consideration of such cases and to protect one’s own interests, it is necessary to resort to the services of lawyers who practise in the country in which the business is conducted. As a rule, they will be well acquainted with the psychology of judges and arbitrators, and will know how best to present the specific information in question. But it is even better to bring in the lawyers at the stage of concluding agreements and contracts. This will enable court investigations to be avoided.
A businessman left several sheets of paper with his signatures on them with a friend, a business partner. The former friend, making use of these sheets, made over all the shares to his own name.
Unfortunately no-one is protected against dishonest partners, neither in Europe nor in Russia. We had an inquiry from a citizen of Yugoslavia who had opened a fish restaurant in the centre of Moscow with his former friend and who had become a co-owner of this company (50% of the shares). He made very large investments in this business. Once the restaurant was up and running, he went back to his homeland for a few months due to family circumstances. He left his partner several blank sheets of paper bearing his signatures (a practice which is regrettably widespread, particularly in a family business or one founded by friends). By the time he returned to Moscow, it turned out that his partner, using these sheets, had made over the shares to his own name.Our client appealed to the Moscow Arbitration Court himself, and requested that the share transfer be declared illegal. The Arbitration Court refused to satisfy the petition, since the signatures on the documents were genuine. After losing the case at the lower level, the Yugoslav citizen applied to our law firm.
After the court cases, the Russian shareholder sold his shares to his partner and left the business.
We studied not only the fact of the share transfer, but the whole history of the company. And we found an original way to resolve the situation. We submitted an appeal against the decision of the Arbitration Court, in which we requested that the share transfer be declared illegal, not because the signatures were forged, but in connection with the incomplete payment of the company’s authorized capital. Under Russian law, shares cannot be sold until they are fully paid for. The shares were paid for only by the Russian shareholder; the Yugoslav shareholder was due to pay his part within a year of the registration of the company, but had not yet done so.The appeal court overruled the decision of the lower court and satisfied the demands of the claim (restored the citizen of Yugoslavia as the shareholder). After the court cases, the Russian shareholder sold his shares to his partner and left the business. And the citizen of Yugoslavia no longer leaves blank sheets bearing his signature with anyone.
After a foreign company had acquired non-residential premises in Moscow, the transfer of property rights was declared illegal by a court.
A British company came to us. In June 2008, it had acquired non-residential premises in Moscow for over 1,000,000 US dollars. Two months later, after registration of rights, it was served with a summons from a company not party to the deal, which had previously owned the premises, demanding that the sale-and-purchase agreement be declared null and void and that the premises be returned to the owner, since the said premises were allegedly taken from it illegally as a result of a seizure by force. In the course of the court session, it was established that the vendor firm (from which the premises were acquired) was a fly-by-night company, and no-one from it appeared in the courts.The Moscow Arbitration Court satisfied the demands of the claim, since an expert examination of the title-establishing documents on the basis of which the vendor firm acquired the title showed that the signatures and stamps on these documents were forged. Consequently, the transfer of title to the property was illegal. The court ruled that the premises be required to be returned from the illegal possession of the other party.
An appeal was then sent to the law enforcement authorities to initiate criminal proceedings.
The British company also had problems with the recovery of the money, since the vendor (the fly-by-night company) had closed its account after withdrawing all the cash in it, and it was not located at the address it had given for legal purposes.We put the case to the appeal court and proved the honesty of the British company. Certificates of inspection of the premises on purchase were submitted to the court. That is, the purchaser did not simply sign the documents and obtain the premises at a discount, but went there in person, inspected the entire premises, demanded that the vendor supply fresh information from the Technical Inventories Office (copies were left for the purchaser), compiled an act of inspection of the premises, enquired about debt for communal service (copies of the requests were made available), and so on.At the same time, an appeal was sent to the law enforcement authorities to initiate criminal proceedings. In the appeal court, with the addition of the documents of the criminal proceedings, it was established that the whole scheme was a fraud from the start. And it had all been thought out so that after the money had been obtained, it would be possible for the premises to be reclaimed. The court reversed the decision, and refused to satisfy the claim demands. Thus we succeeded in returning to the British company the premises it had acquired. And the Russian justice system is now investigating the organizers of the swindle.
A formerly married couple, after their divorce, divided the property they had acquired between them. A few years later, the wife, now living in Stuttgart, filed a claim to the Moscow apartment of her former husband.
A citizen of Germany asked for our assistance in a legal dispute with his former wife, also a citizen of Germany. During their marriage, they had acquired an apartment in Moscow. A few years after this purchase, the family left for their permanent residence in the German city of Stuttgart. But their life together did not work out, and the family broke up. At his former wife’s request, the husband left her with the property in Germany, while he kept the apartment in Moscow for himself. This was a verbal agreement and was never recorded anywhere in writing.Our client sold the apartment because he needed money to organize a business in Russia. A few years later, he received a summons to court for a case brought by his wife about a share of the apartment. The woman’s lawyers convinced the court that there was no agreement, and that her former husband had no right to dispose of common property. They demanded that she be deemed to own a half-share in the apartment.
It is worth while for foreigners to think deeply about the meaning of the well-known Russian proverb: “When the thunder is not roaring, the peasant does not cross himself…”
In reply to our statement that the statute of limitations period for bringing a case (three years) had expired, her lawyers explained that the former wife did not know that her husband was disposing of this property.We succeeded in proving that the woman was giving false testimony to the court, and that she did know that her husband had sold the apartment. We were able to submit evidence of this. Furthermore, a dispute between the couple was also being considered in a district court in Stuttgart, and the former wife’s advocates had testified to the opposite in those proceedings.After comparing the testimony in the two courts, both the Moscow court and the Stuttgart court came to doubt the reliability of the testimony of our client’s former wife. As a result, we successfully defended the rights of our client, both in the Stuttgart district court and in Moscow. The former wife’s demands were refused.By the way, we advise everyone that any property settlement agreements made should be set out in writing.