Then the FKU "Rostransmodernization" refused to pay for the works completed and referred to budget financing of the project to be over. The client gave ABY the task to terminate the power transmission agreement and recover all expenses incurred by the client hereunder.

We developed a legal position for the client and represented his interests in court. We justified three grounds for the agreement termination (Articles 328, 450, and 451 of the Civil Code of the Russian Federation), proved expenses incurred by the client with the conclusion of an expert and by questioning the same expert at a court hearing, justified that the budget financing was available for the project and that it is possible to recover expenses despite the FKU "Rostransmodernization" being a budget institution.

The proceedings lasted 2.5 years. The court involved such third parties as the Ministry of Energy of the Russian Federation, the Ministry of Transport of the Russian Federation, the Government of the Russian Federation, and the Moscow Interregional Transport Prosecutor s Office. The dispute was complicated due to an initiated criminal case against some unidentified persons around the client, thousands of primary documents, the technological complexity of the constructed facilities, politics, and requirements on constantly coordinating their actions with the federal ministries. Finally, on October 6, 2023, the Commercial Moscow Court issued the Ruling on case A40-92322/2021 and approved a settlement agreement under which the client gained proper satisfaction of his claims and recovery of expenses for the state fee and expert examination. The funds under the settlement agreement have already been transferred to the client s current account.

This case is an absolute precedent in Russian judicial practice regarding the claim s value in disputes on termination of power transmission agreements. The case dealt with difficult issues, such as choosing the grounds for the agreement termination, recognizing the impossibility of fulfilling the obligation due to the budget financing being stopped, applying VAT upon agreement termination and under a changed tax rate, recovering expenses for the power supply company despite of the facilities and networks being in its ownership.

ABY s Managing Partner Yuri Pustovit and ABY s Partner Sergey Radchenko worked on the project together.