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EPAM Defends Total in Multi-Billion-Dollar Dispute with Russian Regions

EPAM Defends Total in Multi-Billion-Dollar Dispute with Russian Regions

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Egorov Puginsky Afanasiev & Partners has defended Total in a multi-billion-dollar dispute with the administrations of Russia's Volgograd and Saratov regions before ad hoc arbitrators in accordance with the UNCITRAL Arbitration Rules.

According to EPAM, in 1992, the French company Elf Neftegaz (owned by Elf Aquitaine, which later became part of Total S.A.) and the Russian company AOZT Interneft "entered into a cooperation agreement regarding prospective exploration and development of hydrocarbon fields in the Volgograd and Saratov regions of Russia. The cooperation agreement was countersigned by the Minister for Fuel and Energy of the Russian Federation and representatives of the regions of Saratov and Volgograd."

According to the firm, "the entry into force of the cooperation agreement was subject to conditions precedent, which were never met. The cooperation agreement lapsed in 1995 and none of the parties disputed that at the time. However, in 2009 the Volgograd and Saratov regions’ administrations and the company OOO Interneft initiated arbitration proceedings against Elf Neftegaz (Total), seeking reimbursement of lost profits evaluated at USD 22 billion caused by failure to perform [as required by] the Cooperation Agreement. The Arbitration Institute of the Stockholm Chamber of Commerce had the competence to appoint arbitrators."

Egorov Puginsky Afanasiev & Partners’ lawyers provided support to Total and to its lead arbitration counsel on matters relating to Russian law, as well as advising on on-going court proceedings in Russia.

According to EPAM, in March 2015, the case was heard in Stockholm. In June 2017 the arbitrators dismissed the claims in their entirety, "finding notably that OOO Interneft was neither party to the contract nor a legal successor of AOZT Interneft, that the regions were not parties to the contract, and that the claims were time-barred."

“The matter is of interest for the legal system as a unique dispute in a first cooperation agreement entered into under a number of conditions precedent and relying on the rules of Russian law [that were] in effect in 1991 – 1994," commented Ivan Smirnov, Managing Partner at Egorov Puginsky Afanasiev & Partners’ St. Petersburg office, who led the firm's team in the matter. "In addition, under the proceedings, the Russian party insisted that the relations between the parties should be governed by the rules of international investment law, which is unique in itself for the international practice."

In addition to Smirnov, the EPAM team included Senior Associate Evgeny Gurchenko and Associates Ays Lidzhanova and Alexander Miloserdov.

Russian Knowledge Partner

Founded in 1993, Egorov Puginsky Afanasiev & Partners is the leading full-service law firm in the CIS with offices in Russia, Ukraine and Belarus and associated offices in the UK, the USA and Cyprus.

We advise its clients in many areas of law, including: dispute resolution in Russia and abroad, corporate law, M&A, antitrust issues, project finance and PPP, restructurings and insolvencies, energy and natural resources, property management and privatization, environment, technical regulation and industrial safety, banking and finance, intellectual property, criminal law, real estate and construction, taxation, family and labour disputes, marine and transport law, and international trade and customs.

We combine high academic qualifications, internationally acknowledged moral and ethical values, senior partners' professional experience and practical abilities with the vigour and knowledge of younger attorneys that enables thus providing clients with reliable, first-class service according to both Russian and western standards through a flexible structure.

All News about, and Legal Analysis by, Egorov Puginsky Afanasiev & Partners can be found here.

Firm's website: www.epam.ru

 

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