Marat discusses how a strategy is important when dealing with disputes which fall across many jurisdictions, and the importance of a good team when handling challenging situations abroad.
Do you often have cases whereby Russian individuals or entities invest in companies based abroad?
Generally, yes. Of course, one cannot fail to notice that the measures introduced by the countries with the aim of combating the spread of COVID-19 have influenced investing activity of legal entities and individuals throughout the world.
However, during the normal course of business, the majority of our clients are Russian High-Net-Worth Individuals or companies acquiring some asset(s) abroad. We also have a number of foreign clients who would like to invest in business in Russia or deal with Russian companies.
Mostly, the jurisdictions that are typically involved for Russian-related projects on structuring complex transactions and corporate holdings, are: Cyprus, BVI and the UK
Moreover, some of them are involved in cross-border corporate or commercial disputes in Russia and abroad, which requires expertise in and understanding multiple legal and business orders.
What jurisdictions are usually involved here?
Mostly, the jurisdictions that are typically involved for Russian-related projects on structuring complex transactions and corporate holdings, are: Cyprus, BVI and the UK, although, we have noted a growing tendency of Russian and foreign entrepreneurs looking for new countries, regions and spheres of investment.
For example, one of the most complex and challenging cases we have been involved in recently is connected with participation in a gold mining project mainly located in Ethiopia, with several other jurisdictions involved.
Another point which should be taken into account is what jurisdiction we would like to enforce the award in the future.
What is the most complex aspect of cross-border disputes and litigation?
When we are faced with cross-border disputes, we need to think about: the appropriate forum for a resolution of the dispute; the applicable substantive and procedural law; the potential for amicable settlement of the dispute, and alternative dispute resolution methods like arbitration. Unfortunately, in some Russian-related cases, the parties can simply ignore adding a dispute resolution clause into the agreement.
Another point which should be taken into account is what jurisdiction we would like to enforce the award in the future. In one of our recent cases we had a variety of countries to initiate proceedings in, however, we needed to conduct extensive research in order to track down the location of the defendants' property which could be potentially foreclosed.
When we plan the strategy for dispute resolution, we also consider the remedies available in each particular jurisdiction, "flexibility" of legal norms, potential costs and terms for initiating such proceedings.
Such planning and research is a condition for developing a workable structure for winning a dispute – consider which step has to be conducted at a particular time and in each respective jurisdiction. The key reason for having a workable structure is to make the entire process effective; you ought to make it ready to be promptly amended if some conditions of the dispute change over time.
What other issues should be taken into account when considering a strategy for disputes?
When we plan the strategy for dispute resolution, we also consider the remedies available in each particular jurisdiction, "flexibility" of legal norms, potential costs and terms for initiating such proceedings.
By way of illustration, in Cyprus we managed to obtain disclosure measures regarding sufficient evidence and documents which could be further used in the proceedings initiated in Israel and Ethiopia as well as for criminal proceeding in Bulgaria, whereas Israeli and Bulgarian law did not provide such an opportunity. Also, participating in Cyprian-based litigation allowed us to prepare a very detailed and comprehensive affidavit which described the dispute that was further used in other proceedings. However, our application for the initiation of criminal proceedings in Bulgaria was very short and brief.
On the other hand, dealing with Ethiopian law - which was applicable for corporate relations in the gold-mining companies - turned out be rather challenging, due to the fact that major codifications and regulations are outdated and do not respond to business needs in 2020.
What is important for a good attorney-client relationship in cross-border disputes?
In addition to the strategy, the most important issue is creating a good team of like-minded foreign colleagues who assist us with the dispute and have a single decision-making person or unit on the client’s side that can promptly react to our requests. We develop a strategy, orchestrate actions taken in different jurisdictions by our foreign colleagues and act as an interlink between them and a decision-making person or unit on the client’s side aforementioned.
When we need legal assistance in some "new" jurisdictions we apply to famous legal rankings like Chambers, The Legal 500 and IFLR1000 and search for individuals who specialise in the required sphere of law or legal problem.
How do you form a team for complex multijurisdictional cases?
Firstly, associate of TA Legal Consulting, Alisa Kadzhoyan, assists me in complex multijurisdictional disputes. Alisa joined the firm in 2017 and she specializes in both corporate, investment and dispute resolution matters.
Moreover, due to our experience in cross-border litigation, we have developed a network of legal professionals we trust and we engage with for local court proceedings. However, we are also open to cooperation and establishing contacts with new law firms and practitioners.
When we need legal assistance in some "new" jurisdictions we apply to famous legal rankings like Chambers, The Legal 500 and IFLR1000 and search for individuals who specialise in the required sphere of law or legal problem.
When we participate in complex multijurisdictional dispute, we suppose that coherence of lawyers' actions, control over the implementation of developed step-plan are of paramount importance.
How should the process of collecting evidence be organised?
Collecting evidence is of paramount importance, both in national and cross-border disputes. In litigation which involves multiple jurisdictions, collecting evidence which would support the position of the client is more difficult and time-consuming and requires the assistance of more individuals and services. For example, we once faced with the necessity to obtain a market research report from specialists in China and written evidence from a legal entity incorporated in Zambia. The process shall be carefully monitored and organised in order to procure timely presentation of all-encompassing documents and materials.
Moreover, in cross-border disputes, when access to state registers and data is more difficult compared to litigation within the borders of our country, we resort to assistance from investigators. In our recent cases, investigators successfully collected data regarding assets and property, managed to find contact persons in whatever companies we needed and even revealed forgery of the documents presented to the client within the conflict, which was further proved and documented by technology experts and used as an additional piece of evidence.
From your experience, what is a good way to ensure effective communication and outcome in cross-border disputes?
When we participate in complex multijurisdictional dispute, we suppose that coherence of lawyers' actions, control over the implementation of developed step-plan are of paramount importance. Therefore, we keep in touch with all engaged professionals and the client 24/7 (via meetings and audio/videoconferences).
Firstly, online arbitration proceedings and hearings are being developed by most prominent arbitration institutions and court systems.
Do you resort to PR or other media coverage of the case?
Yes, sometimes PR coverage of the dispute can be beneficial for the client and the outcome of the case. From our experience, media coverage may help if the client is facing fraudulent behaviour. The threat of destroying fraudster's business reputation and effective PR may motivate cooperation and make efforts for amicable settlement of the conflict.
Is IT and online technology of assistance when participating in cross-border disputes?
Yes, modern technologies assist in complex disputes. Firstly, online arbitration proceedings and hearings are being developed by most prominent arbitration institutions and court systems. Moreover, by virtue of online services, we managed to participate in and represent the client at the general meeting of shareholders during the corporate conflict which was held abroad. The services allowed us to organise not only proper communication at the meeting, but also high-quality fixation of the process as another piece of evidence for potential court proceedings.
Marat Agabalyan
Managing Partner I Advocate
TA Legal Consulting
47/2 Leningradsky av., Suite 414
Moscow 125167, Russia
T: +7 (985) 220 8594
TA Legal Consulting is a Russian boutique law firm which was formed in 2015 by me and my partner Ivan Tertychny. We both (from the moment the firm was established) had more than 10 years of experience in major international law firms. The key idea was, and still is to provide extremely high-quality legal services for a great value of money. We agreed that the firm should specialise in structuring and implementation of investment projects in Russia and abroad, assisting clients in corporate and finance transactions and handling complex local and cross-border disputes. This is what we were trained in and did for many years at international law firms.
