The performance from year to year

Objective

Our client, a major Russian company that specializes in the refurbishment and modernization of dangerous industrial facilities requested our assistance in its dispute with the Ministry of Defense. The arbitration court of the first instance held our client responsible for over $1.5 million in damages, for alleged failure to meet the completion deadlines for the contracted work. Our client argued that the extended timeframe was necessary due to the reduction in budget limits, but the argument was not accepted by the court. Our task was to convince the appeal court to apply special provisions of the Russian Civil Code and oblige the Ministry of Defense to extend work implementation timeframes, due to the reduction in budget allocations. 

Resolution

We were able to find appropriate arguments and persuade the appeal court to apply a special provision of the Civil Code, which the courts had previously refused to employ in similar disputes with government authorities. By using simple and clear arguments, we proved to the court that application of the special provision of the Civil Code did not violate the rights of the government agency as a customer in the contract. 

Result

The Defense Ministry, which had previously refused to amend the government contract for two years, obeyed the judgment of the appeal court. Work completion deadlines were extended and our client was relieved from having to compensate the Ministry over USD $1.5 million. Furthermore, the client retained the government contract and was able to complete it.