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Jun 8, 2022
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Sailed: Britain will not give money to Russia, although it considers itself the “queen of justice”

Sailed: Britain will not give money to Russia, although it considers itself the “queen of justice”

Photo: Press Service of JSC “Admiralty Shipyards” / TASS

“For a number of Societies, deliveries were disrupted to ensure the construction of commercial orders for the construction of fishing and special vessels. In this regard, PSZ Yantar JSC, SZ Severnaya Verf PJSC, Admiralty Shipyards JSC launched claim work to compensate for the costs incurred, ”RIA Novosti reports with reference to United Shipbuilding Corporation (USC) JSC .

According to the news agency, with the start of the special operation in Ukraine, many foreign companies, including Jotun, Hempel, Teknos, terminated contracts unilaterally, without fulfilling their contractual obligations.

“Litigation will entail multimillion-dollar debts for companies representing manufacturers on the Russian market: Jotun Paints LLC, Hempel JSC, Industries PPG,” the social activist explained to the agency. Olga Druzhinina.

Doctor of Law, Professor of the Department of International Law of MGIMO Dmitry Labin considers the filing of a claim by Russian shipbuilders as the right and timely decision.

– In this situation, we are talking purely about an economic dispute, but I assume that the defendants will try to refer to certain circumstances that exclude the possibility of fulfilling obligations.

From a practical standpoint, it would be interesting to see how international arbitration would proceed. I assume that these are still international commercial contracts, and as a rule, in the vast majority of cases (and in this case, of course, very serious transactions), an arbitration clause is provided: that is, in the event of a dispute, transfer to some reputable international commercial arbitration arbitration.

In my opinion, force majeure circumstances are, of course, provided for, but in this situation, any independent or voluntary adherence to some political guidelines of national governments should hardly be considered legally as a basis for refusing to fulfill obligations.

Of course, we are in a period of paradigm shift, including legal ones. For many decades it was believed that the same English court was independent and impartial. It would be interesting to see how the practice develops, but if you do not start, then you can hardly achieve anything. This is the first step that, in my professional opinion, needs to be taken in order to draw further conclusions.

“SP”: – What are the chances that the court will take the side of Russia?

– Any arbitration, as lawyers say, is a 50-50 chance. To be honest, I see this as quite promising. At least reputationally beat counterparties. The parties decide whether to do so publicly or not, but the professional community usually gets to know the details.

The very fact of the proceedings is already a very serious signal for the professional community to pay attention to this. Third-country customers will be wary of entering into such transactions and require large guarantees, because it is unlikely that anyone in the future wants to have such unpredictable situations. This will impose additional costs on counterparties.

This will give a wide effect, even if for some reason the most successful result does not work out. Although it is difficult to say that in this situation it will be a success.

“SP”: – In the case of a positive court decision for Russia, what is the likelihood of receiving compensation, especially if the plaintiff company is under sanctions?

– Of course, certain difficulties will arise, but we proceed from the fact that the term sanctions is very widely used today, especially in the media, but legal qualifications are unilateral measures of individual states. They are accepted in accordance with domestic law.

There are difficulties, but purely legally no one is obliged to follow them, because these are measures that are taken within states in relation to individuals – a ban on interaction with Russian companies in this case.

Winning a case is half the battle, as lawyers say. The other thing is to execute. The multilateral convention facilitates the enforcement of foreign arbitration awards in any jurisdiction where the property of these companies will be.

Again, you can seriously pat, because it is everywhere a procedure, preliminary interim measures, arrests. For contractors, this is also certain costs for lawyers, for the protection of property. All this creates difficulties, since competent lawyers can seriously beat counterparties. So it may be more profitable to find options for the “global”.

The conditions, when they are rattling all over the world, are not very comfortable for work.

At the same time, failure to fulfill obligations to build ships will most likely affect the capabilities of the Russian fleet. According to RVitaly Chernov, Head of Analytics at PortNews Media Groupif we talk about river-sea vessels or icebreakers, then these vessels are built mainly in Russia.

— However, there is a significant share of imported components in different segments of the fleet. If we talk about the aforementioned fishing segment, then the level of localization there is really low: the share of foreign components reaches 70%. This is due to the fact that fishing vessels are extremely complex and rich, they are built, for the most part, according to Norwegian projects, which include Western equipment and components already at the design stage.

“SP”: – Will Russian companies, in your opinion, be able to achieve compensation payments and how will the failure to fulfill obligations to build ships affect the capabilities of the Russian fleet?

– Under the conditions of sanctions, it will be problematic to achieve compensation, I think. All this threatens that it will be necessary to look for alternative suppliers of equipment, which can lead both to changes in the project documentation and to delaying the execution of orders. Accordingly, customers will suffer losses, and the program for updating the fishing fleet may not be completed on time.

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