On 26 October, Vladimir Kilinkarov, Partner and Head of the PPP Practice at Maxima Legal gave a presentation at a session as part of the St Petersburg Annual Investment Forum.  The session was titled ‘Infrastructure building: models for investment and mechanisms for financing in the development of public-private partnership’.

Maxima Legal was the partner of the session.  The moderator of the session was Olga Arkhgelskaya, Partner at EY.  In addition to Vladimir, the speakers at the session included Ilya Tkachev, Counsel for the Russian Minstry of Transport, Andrey Kiselev, Managing Director of the Department for Financing Infrastructure at VTB Capital, Konstantin Limitovsky, Deputy Chairman of the Eurasian Bank for Development, Roman Golovanov, Deputy Chairman of the Committee for Investment in St Petersburg and Alexander Isakov, Head of the department for PPP projects at the BIS Group.

Topics of discussion at the session included government initiatives in the establishing favourable conditions to attract private investors to infrastructure projects, the process of forming a legislative base to support capital-intensive projects as well as initiatives from the side of big business to resolve infrastructure issues.

Vladimir Kilinkarov in his presentation covered the main problems and trends in the regulation of PPP in Russia and talked about the particulars for PPP projects, the key factors for their success, namely where the interests of all participants in the project (from authorities to end users) at given equal importance.

According to Vladimir, the success of PPP projects relies on adequate and consistent legislation and court practice, however, in this regard recently we have witnessed a number of serious problems emerge.
“The programme set out by the government for the “infrastructure mortgage” requires the resolution of such problems and the amending of legislation on concessions and PPP.  It is necessary to put an emphasis on finalising legislation, eliminating legal obstacles and filling gaps as well as on removing the barriers to attracting private investment in public infrastructure”, Vladimir concluded.   

To read the programme for the Forum, please click here.

Delovoy Peterburg has published a column written by Partner and Head of the PPP Practice at Maxima Legal, Vladimir Kilinkarov, which covers the topics of arbitration disputes regarding concession agreements.

In his article, Vladimir writes about the popularity of using the ‘infrastructure mortgage’, which according to the plan of the country’s leadership should lead the economy by 2020 to growth rates above the world average.  The challenging task according to Vladimir, cannot be realised without “respect for the provisions of the future programme from all three branches of power”.

As Vladimir has noted, “the commercial courts defend the interests of the budget and are less committed principles of objectivity. Which is why the first course of action for an investor is to choose an independent arbitrator or arbitration tribunal – if not an international one then a Russian one.

“It is assumed that a tribunal will not be prejudiced against a private investor in a dispute involving the Russian Federation or its regions, as every other dispute is likely to involve the recovery from the state budget of large sums of compensation pledged in an agreement as an indemnity on the return of private partner's investments. The right of the parties to choose non-state arbitration is an important condition for the project for the private partner.

“Court practice for disputes relating to concession agreement at the present moment do not provide much optimism.  Without even time to take in the decision of the commercial courts in respect of the Orel tunnel, the professional community was shaken by the decision of the Moscow Commercial Court in the case of OJSC Glavnaya Doroga against the Avtodor Group. The Court awarded 2.5 billion roubles to be paid by the state company for concessions for the construction of a new exit to the Moscow Ring Road from the M-1, but dismissed Avtodor’s request to enforce an arbitration clause under which the dispute was to be heard by the International Commercial Arbitration Court (ICAC) of the Russian Chamber of

Industry and Commerce. The ICAC is a Russian tribunal with an impeccable reputation, under law it has the authority to consider concession disputes. However, the Commercial Court in Moscow decided that the dispute under the concession agreement is public law in nature, since the construction is aimed at satisfying a public interest and the agreement was entered into with the Russian Federation via a state company and following the results of the state tender. As such, according to the Court, the transfer of the dispute to the arbitration tribunal would violate the fundamental principles of Russian law.

We have to hope that the unprecedented decision of the Court will be corrected by the higher courts and that the market will not suffer.  Otherwise talk about the infrastructure mortgage and the attracting of private investors to public infrastructure will be viewed by investors with either irony or dismay.”  

For the full version of the article, click here.

Maxim Ali, Senior Associate and specialist in the IP/IT Practice at Maxima Legal, has had an article published in the DP.ru blog which examines the situation around the claims that the FSB’s requests to be provided with the decryption codes for messages sent on Telegram, a popular messaging app in Russia, be recognised as unlawful.  The claims have been submitted to the Meshchansky Court in Moscow by journalists Oleg Kashin and Alexander Plushev.

Maxim Ali noted that at present there is not information published on the court’s website about the issuing of the claims, it may be that the court proceedings have simply been announced and that the claims have not yet been submitted.

Maxim added that the lawyers from Agora, who are representing Mr Kashin and Mr Plushev, had also been instructed previously by Pavel Durov to represent the interests of Telegram Messenger LLP in the matter of the company being held liable for failing to disclose the encryption keys following the request of the FSB and was fined 800,000 roubles.

In the present situation according to Maxim, the three cases may well be connected, and that the separate claims submitted by Mr Kashin and Mr Plushev are part of the lawyers’ strategy to defend Telegram.

If this is the case, then the actions of the FSB to be challenged by the claimants are, most likely, the agency’s requirement to be provided with the decryption keys, which was ignored by Telegram and which became one of the grounds for imposing a penalty in the form of a 800,000 roubles fine.

For the full version of the article, please click here.

On 19 and 20 October in Minsk took place the annual Minsk Legal Forum at which representatives from the legal profession from Belarus, Russia, Ukraine, Kazahkstan, the Baltic states and western Europe gathered together.  The main topic of the forum was partner relationships in law firms.  Over the course of the forum, the guests discussed the law and paradoxes in the ‘family relationships’ between partners as well as alliances and misalliances in the legal sector.

Senior Associate and Head of the Dispute Resolution department at Maxima Legal, Sergey Bakeshin noted that the Minsk Legal Forum has become a popular space for meetings between lawyers and advocates from post-Soviet countries.  

The forum’s hosts succeeded in creating a warm, friendly and entertaining atmosphere where it was possible to not only discuss professional matters but pleasantly spend time with informal meetings with fellow lawyers.  “Long live Belarus!”, added Sergey.

On 18 October in the restaurant Arka a business breakfast took place titled ‘Social infrastructure in development.  The Finnish experience’ organised by the business club Meeting! - Maxima Legal is the club’s legal partner.

At the business breakfast, participants discussed the modern trends in Finnish and Russian architecture of social facilities, costs and payback for such facilities and innovative formats for social infrastructure involving conversion of previous industrial buildings were discussed.

Margarita Dukhova talked about the use of public-private partnership in the creation of social infrastructure.

The event was attended by managers from developers, architecture, design and engineering companies and representatives from government as well as from banking, medical and education sectors.  Colleagues from Finland and Estonia also shared their experiences.