The US and EU sanctions in Russia are taking their toll on some of the international firms located in the country with Allen & Overy’s (A&O) Moscow office offering redundancy packages at associate level.
Andrei Gusev of Borenius looks at the effects of the latest EU/US measures.
There was a lot of speculation, stress and tension among foreign investors in Russia when the EU, the US and several other countries imposed their two latest rounds of sanctions against Russia, leading to Russia responding with its own counter-sanctions, including the so-called ‘food embargo’. A few weeks after the introduction of these measures, certain trends have already surfaced. What are these trends? Continue reading “Are sanctions affecting workloads in legal services? What are the expectations for 2015?”
YUST’s Evgeny Zhilin outlines the benefits.
2014 has brought many challenges to the Russian economy. The already modest growth rates that were demonstrated in the previous year were targeted even more by various sanctions imposed against Russia by the US, EU and some other jurisdictions. As a reaction to these, Russia has installed counter-sanctions in the food sector, hitting some of the European food producers hard. Continue reading “Sanctions: an unprecedented moment for doing business in Russia”
Russia-based lawyers are a hardy bunch, conditioned to working in a volatile market where ups turn into downs on an almost annual basis. No matter how good things might appear, they are well aware that some form of political interference or economic disaster might be lurking around the corner. Most get by on the knowledge that Russia’s lucrative market is remarkably robust and that in the long term it always seems to bounce back.
Yet, even for the most seasoned western lawyers who went through the Russian sovereign debt default of 1998, the events of 2014 are proving an altogether different experience. While previous Russian misdemeanours were largely tolerated – be it the Russo-Georgian war of 2008 or the politically motivated imprisonment of Mikhail Khodorkovsky in 2003 and the subsequent dissolution of Yukos – it has been impossible for the West to ignore Russia’s actions in Ukraine. Russia’s annexation of Crimea in March 2014, the subsequent war and support of separatists in Ukraine’s eastern Donbass region, and the inevitable ratcheting up of economic sanctions from the US, EU and other western states, has led to a situation so intractable that few can see an obvious way out. Continue reading “Chasing the bear – Sanctions bite on Russia’s legal market”
While their transactional colleagues in Moscow are suffering, the current sanctions on Russia have been a boon to trade and sanctions lawyers, who are fielding countless enquiries from Russian and international clients. The fact that the sanctions are so multi-layered, leaving plenty of scope for interpretation, has increased the demand, particularly when it comes to deciding what constitutes a controlling stake in a company, something that was relevant to the designated Russian individuals who were named in the first few rounds of sanctions and who owned stakes in many different companies. This uncertainty has, in many respects, been more damaging to Russian business than the sanctions themselves, something that the US authorities were fully aware of when they rolled them out.
‘I spoke with US officials on behalf of certain clients and said to them that greater precision in the sanctions-related announcements could make it easier for the US companies to comply,’ says Jeremy Zucker, co-chair of Dechert’s international trade and government regulation practice. ‘On multiple occasions, the US officials responded that the imprecision was deliberate because the uncertainty it develops among American industry leads to greater pull-back from Russia than is actually required by the sanctions themselves. As with a blanket ban, greater precision would remove much of that element of choice.’ Continue reading “Straining the bonds – why disputes counsel is high on the agenda in Russia”
Jaishree Kalia reports on the anticipated fall-off in deal work in the wake of Ukraine crisis
Russia’s volatile political environment has begun to impact the business of international and domestic law firms in Moscow as M&A activity falls, new capital markets work dries up and expanding sanctions cause increasing concern.
Western targeted sanctions imposed largely on individuals in Russia over its handling of the crisis in Ukraine have already had a crippling effect on corporate activity. However, it is the looming threat of yet tougher, broader-based sanctions as the situation escalates, with measures potentially targeting the Russian financial and energy sectors specifically, which could cause advisers even deeper problems.
Berwin Leighton Paisner (BLP) has bolstered its global real estate capability with the hire of a rated three partner team from Akin Gump Strauss Hauer & Feld’s Moscow office.
The team, which is set to join Goltsblat BLP in mid-January 2014, includes the current head of Akin Gump’s real estate practice in Russia, Vladislav Sourkov, who will be joined by his colleagues Rustam Aliev and Dmitry Maltsev. Sourkov is described by The Legal 500 as ‘dedicated, experienced, and very driven on client service’. Continue reading “Moscow team hire: Goltsblat BLP take on real estate trio from Akin Gump”
Given that domestic litigators in Russia and the CIS regularly see their clients’ largest commercial disputes go abroad, usually to be resolved under English law, they treat the outflow of work with unexpectedly good grace. This is mostly based on the realisation that this exodus of high-value litigation not only reflects what clients want, but also what they need. But what’s best for clients isn’t always best for advisers’ bottom lines.
‘The tendency for cases to go to the UK High Court will remain for the next two or three years,’ says Markian Malskyy, head of alternative dispute resolution (ADR) at Ukrainian law firm Arzinger. ‘Normally the bigger Ukrainian law firms would try to exclude the domestic courts from any potential disputes. One party will usually hope that the UK courts will accept jurisdiction. This looks like a good platform for objective justice – still hard to find in the CIS.’ Continue reading “A question of confidence – Russians strive to keep high stakes disputes at home”
Boris Berezovsky v Roman Abramovich; Michael Cherney v Oleg Deripaska – these were the two headlining title bouts that for a brief and glorious moment took the often prosaic world of shareholder disputes out of the business sections and on to the front page of almost every national newspaper.
They involved a cast of colourful litigants with a seemingly bottomless pit of money and grudges, whose lawyers, particularly the barristers, were turned into media stars, if only for a while. The costs were huge and the outcomes of both cases well documented. Continue reading “After the gold rush – has the age of the oligarch dispute passed?”
The Russian legal market can be an unpredictable beast. A history of interfering politicians, corruption and debt crises, both internal and external, have meant that since the collapse of the Soviet Union, law firms in Moscow have struggled to maintain a steady grasp on just what might be around the corner. Despite all the variables, however, there is one constant, and that is the energy and natural resources sector, which dominates Russia’s foreign exports – in 2011 oil and gas revenues accounted for 10.4% of Russia’s GDP (up from 7.6% in 2009). Provided that commodity prices don’t drop for a sustained period of time – particularly crude oil, which has been strong since going above $50 a barrel in 2005 – a decent volume of work can be assured.
This was underlined in 2010, when the Russian state-owned oil producer Rosneft launched projects in the Kara and Barents Seas after obtaining licences to explore four blocks in Russia’s Arctic shelf. Three major joint ventures with the Western energy companies Exxon Mobil, Statoil and Eni were subsequently signed in 2011 and 2012. Continue reading “Russia: pipelines east”