From London with love
9 March 2012 | By Christian Metcalfe
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At the Lawyer2B Year 12 careers day event at BPP Business School on Wednesday Macfarlanes solicitor Tom Rose, during a presentation on City Law in Practice, made the point that the growth over the past five years of London as the jurisdiction of choice for wealthy Russian litigants showed the strength and influence of City law.
But what are the reasons behind the choice for UK courts?
Russian lawyers contend that the inadequacies in the Russian judicial system have been a key factor in bringing oligarchs’ cases to the UK.
“Russian domestic corporate law is considered inadequate and the Russian court system is too unpredictable to entrust multibillion disputes to it,” notes Yuri Monastyrsky, a founding partner at Monastyrsky Zyuba Stepanov & Partners.
He adds that the opportunity to conduct the case under English law was also bound to be attractive to the parties and lawyers involved as from a Russian lawyer’s perspective, English law is relatively simple and convenient when used to construct documents such as complex sale-and-purchase agreements.
Other peculiarities of Russia’s system will influence decisions to file claims in the UK, says Roman Khodykin, an associate professor at the Moscow State Institute of International Relations.
“The Russian Procedural Code states that a judgment should be handed down within a three-month period, except in very exceptional circumstances,” he says. “As a result, Russian courts are overloaded, with a Moscow court judge presiding over an average of 60-90 cases a month. There are a lot of cases pending, and with this kind of workload they’re not able to consider cases with all the care and diligence that’s probably in existence in English courts.”
Another key issue has been that Berezovsky v Abramovich has been based primarily on witness statements. In Russia, as Khodykin notes, it is very difficult to deliver a judgment purely on witness statements and on contractual agreements that are not in writing.
“Therefore in Russia it’s likely that the case would have been dismissed, as there’s no written contractual agreement,” he says.
He adds that other issues, such as the fact that judgments in Russian courts are not easily enforceable abroad and that there is currently no enforcement treaty between Russia and the UK, will have affected the decision over location.
Russians and the Russian legal market as a whole have been monitoring the developments of Berezovsky v Abramovich closely, notes Monastyrsky.
“For ordinary Russian citizens, it’s interesting to see how in reality the post-perestroika property privatisations and initial creation of oligarchs’ capitals were carried out, particularly the current Berezovsky v Abramovich case, related to the privatisation of SibNeft,” he says. “For lawyers, it’s obvious that decisions taken in London may have an impact on Russian businesses, which in turn may result in additional projects and opportunities.”
Dimitry Afanasiev, chairman of Egorov Puginsky Afanasiev & Partners believes that what the Russians think of these cases depends on whose side they are on.
“For some, the English courts are the last opportunity to obtain justice; yet for others it’s a venue to bring frivolous claims,” he says.