Light and Shade
The Russian legal market faces a new era as the government opens the door to greater business transparency, but not everything is open to scrutiny.
In brief
Russia has entered the World Trade Organisation and the government is also ushering in a host of reforms designed to improve the country’s business environment. The changes are providing both headaches and opportunities for lawyers. On 22 August Russia gave out the strongest signal yet that it is ushering in a new era of transparency as it finally succeeded in joining the World Trade Organisation (WTO). But while the Russian government has since welcomed certain ways to increase transparency in the business sector, there are concerns in the legal market that other changes may give rise to conflicts and even more red tape.
Bank bonus
Russia’s largest state-owned bank Sberbank shocked the legal market last month when it published the results of its inaugural legal roster in Russian on its website. In contrast to most other banking panel processes, notorious for their secrecy, Sberbank took the unorthodox step of publishing the names of all of the firms that failed to win spots on its 13 sub-panels. […] “RFPs and tenders for legal services are more widely used in Russia since Russian companies started adopting international standards in retaining outside legal counsel, which also helps them to reduce legal fees,” comments Alexander Nadmitov, managing partner at -Nadmitov Ivanov & Partners. To Nadmitov it is only logical that state-owned companies and banks have already jumped on the bandwagon. “Since state-owned companies and banks are quite active players in the Russian and international M&A and finance areas - as the Rosneft acquisition of TNK-BP shows - it is not surprising that many RFPs and tenders for legal services have come from state-owned -companies and banks,” he adds. […]
Structured benefits
Although it may take some time for companies and law firms to get used to the new rules and legislation, most lawyers are optimistic that their firms will reap the results of more structured and transparent procurement procedures. […] Nadmitov agrees that the rise in RFPs will be a good thing for the Russian market. “Generally, RFPs and tenders for legal services lead to more competition, lower legal fees and more transparent procurement of legal services if they are duly and fairly organised.”
Keeping schtum
While transparency is slowly becoming the order of the day in terms of panel processes, elsewhere in Russia some things are still less than open. A recent presidential decree ordered state-owned companies not to provide information to foreign regulators without -authorisation from the Russian government. According to reports, the decree came about as a result of an investigation by the European Commission (EC) into alleged anti-competitive practices by Russian energy giant Gazprom in the Central and Eastern European gas markets and was designed to protect Gazprom from the probe by ensuring that the commission had to go to the Russian government first to request the information it required. […]
Serve to protect
Nadmitov, however, thinks the decree may help protect the interests of Russian companies operating in the European market. “The decree will give Russian state-owned companies incorporated in Russia some additional protection against requests for information coming from foreign state agencies,” he says. “For example, if the EC conducts an antitrust investigation into a Russian company and requests information from it, the Russian company can refer to this decree as a legal mechanism that prevents it from supplying information. Therefore, the decree can mitigate the risk of a Russia-based company being held to be an uncooperative entity which intentionally or negligently fails to provide information in response to the commission’s request, which could result in negative consequences for the company. “In such a way the decree can protect companies incorporated in Russia, although it might be less helpful in the case of foreign subsidiaries of Russian strategic companies which will still be subject to foreign regulation and have to comply with the requests of foreign state agencies. In any case, foreign regulators can alternatively seek information from foreign counterparties of a Russian company.” While Nadmitov is sceptical as to the impact the decree will have on the local legal market, it will provide some food for thought. “We don’t think this decree will have a great impact on the Russian legal market, but last year’s raids by the EC on European subsidiaries of Gazprom may make Russian companies operating in Europe think about moving their European trading and logistics subsidiaries to more neutral jurisdictions, such as Switzerland, where the EC cannot act without the involvement of the Swiss authorities,” he says. […]
Источник: The Lawyer, Свет и тень, Рут Грин
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