Novaya Advokatskaya in an article, titled ‘Reasonableness of compensation for legal costs’, has considered the recovery of legal fees and the procedure for reducing the amount claimed. The article focused on analysis of the decision of the Arbitration Court of the Central District of 25 July 2017, in which the court confirmed the lawfulness of the judgments of the lower courts, under which a party costs were reduced by 57,000 roubles.

After reviewing the decision, Senior Associate at Maxima Legal, Maxim Ali noted that the criteria listed by the Court for the reasonableness of costs (the extent of the claims, their value, complexity, the amount of work provided, time taken, the documentation prepared, duration of the case and other factors) had already been formed through established court practice and had been mentioned in guidance from the Supreme Arbitration Court of the Russian Federation in 2004 and 2007.

“The motives for reducing the amount of compensation for court expenses are formulated by the court in a rather abstract way, which, unfortunately, is found everywhere, as is the tendency of courts to undervalue such compensation. Despite the fact that the Supreme Arbitration Court and the Supreme Court have repeatedly spoken about the inadmissibility of arbitrarily reducing court costs, in practice a detailed assessment of the reasonableness of the amounts claimed is extremely rare and is often limited to listing the criteria for the reasonableness of expenses and references to rulings of higher courts." Maxim explained.

Maxim added that such decisions invariably lead to the fact that participants in litigations cannot rely on full compensation for legal costs, and unscrupulous debtors, in turn, can safely refuse to voluntarily fulfil obligations, borrow at another’s expense and draw out any conflict until it reaches a court. Maxim concluded that as a result the courts’ caseloads increase, and this adversely impacts upon the quality of decisions in practically all cases.

For the full version of this article (in Russian) click here.

Project SPARK has published an article which considered current issues of protecting trademarks. Maxim Ali, Senior Associate and IP/IT specialist at Maxima Legal, has provided his expert opinions and comments for the article.

Any unauthorised use of a trademark can lead to either the recovery of damages or a demand for compensation as defined by statute for the unlawful use of a trademark. Maxim Ali considers that the payment of damages a more 'exotic' way to recover losses: "In my practice, it is hard to recall one instance, when the recovery of damages was a more effective way to protect the interests of a rights holder".

Before initiating any course of action to protect a trademark, it is first important to consider whether applying to court will be economically worthwhile and carefully prepare a strategy for the dispute. Maxim explained that: "It is necessary to compare the legal expenses (such as court fees, lawyers' fees) with any compensation that the court may grant. It should also be borne in mind that legal expenses are awarded to the successful party but that the final amount awarded can be reduced by the court if it considers it to be disproportionately high (which courts often do)."

He notes that "the rights holder must always be aware of the possibility of being 'counter-attacked' by the breaching party and losing the rights protected by the trademark. It is necessary to collect and keep evidence of the use of the trademark in relation to each type of product or service."

In addition, a competitor or 'a patent troll' can purchase 'old' trademarks, that are not of interests to its 'owner' but are similar to a degree to cause confusion with another's trademark and which could be used to challenge other trademarks which have a later expiration date.

In respect of this, Maxim Ali recommends the following: "On one side, it means that the right holder must carefully monitor the fate of similar trademarks with an upcoming expiration date (including in order to renew or challenge them). On the other hand, the right holder must ensure the availability of a spare logo (for example, in the form of an image or slogan) that is more likely to withstand potential attacks from other companies and will 'reserve' for the right holder the maximum period of protection."

For Maxim's full comments on this topic and the article, please click here.

On 22 September, business newspaper Delovoy Peterburg published an article (in Russian) titled 'Relocation to St Petersburg. The crisis has lured Russian capital away from offshore'. The article includes the assessments of lawyers on the success of reforms to Russian tax legislation to combat offshore jurisdictions and the law on the amnesty for returning capital and tax-free transfer of liquidity. Delovoy Peterburg explained to what extent St Petersburg businesspeople have made use of the instruments provided by the government.

Elena Kilinkarova PhD, Counsel and Head of the Tax department at Maxima Legal, one of the experts quoted in the article, commented that "the amnesty for returning capital has become a much less successful project than the project for deoffshorisation as a whole". Elena also noted that whilst there is stable interest in the rules on the amnesty of capital, the service for preparing the declaration necessary for participation in the amnesty has been largely unused.

Against the background that in 2017 a number of governments began the automated exchange of information about bank accounts, in 2016 and 2017 businesses expressed a significant interest in Russia's potential participation in the automated exchange of information and the consequences of this. Despite Russia being a signatory to a treaty to the relevant organisations on the automated exchange of financial information since May 2016, the next steps on the implementation of the changes has not taken place as quickly as had been expected. The bill for introducing the necessary changes to the Tax Code was presented to the Russian Parliament, the Duma, only in July 2017 and is currently being debated.