Our client, a major property developer, undertook to complete the construction of apartment buildings for defrauded private investors in the Moscow region. Upon completion of the project, the developer was sued by a corporate investor that claimed several apartments, with total value of over USD $15 million, by referring to its investment contract with the previous developer. Our client refused to provide apartments to the corporate investor, as the client had not assumed the previous developer’s obligations with respect to any legal entities. Our task in the project was, despite the unfavorable court practice to prove to the court, that our client undertook upon itself only obligation to complete the construction, and did not have to fulfill all obligations of the previous developer.
We represented the client in Arbitration Courts of four instances including the Supreme Arbitration Court of the Russian Federation and managed to persuade its Presidium in validity of our position. The resolution contradicted the standard practice of the time, when developers taking over contraction projects, were forced to give away completed real estate to companies that were partners of previous developers. The court practice that arose as a result of this case at the Supreme Arbitration Court Presidium, was reflected in joint resolutions by the Supreme Arbitration Court and the Supreme Court of the Russian Federation
The favorable court decision allowed our client not only to keep the $15 million worth apartments claimed by the counterparty, but also to protect himself from potential claims by other companies, which could have resulted in multimillion dollar losses for our client.