Will Americans help punish Gref and return Pavlovskgranite to its former owners

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Will Americans help punish Gref and return Pavlovskgranite to its former owners
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Artyom Zhavoronkov, Partner of an international law office

As business media report, the PPF Management company registered in Delaware took out an action in the S.D.N.Y. Court, over a claim for compensation of $500m pecuniary and $250m non-pecuniary damage for the loss of control over the largest enterprise producing gravel chippings, Pavlovskgranite. 

Defendants in the case are Sberbank and the Chair of the Board, German Gref, Sberbank Capital and its Director General, Ashot Khachaturiants, and some other legal entities and persons. 

Generally speaking, the story is very simple. In 2008, Sberbank provided credit and was transferred a surety bond in the form of the shares in  the managing company and Pavlovskgranite itself. Because the loan was not repaid in time, Pavlovslgranite’s majority share-holding came to Sberbank Capital. And, actually, that’s the story.

Are such appeals in the American court now becoming a tendency for people who have lost all their cases on the territory of the Russian Federation? Well, I do not think so. This is not the first precedent: in my practice there were cases of such appeals to the courts of France and Great Britain after my clients’ opponents had lost the cases in Russia.

I’d call it an alternative way of court proceedings whereby the help of which one of the parties may wish to reverse the situation for their benefit via the so-called foreign factor. The attempt to proceed with this case in the court of New York is merely a procedural trick. Regarding what it is aimed at, we may speak about two things, I think. 

For one thing, as German Gref put it, it is a way to withdraw from responsibility. Secondly, it is an attempt to raise media hype and to cause publicity against the background of the negative attitude towards Russian institutions being observed in the West on the whole and the USA in particular.  In this sense, like it or not, Sberbank’s “Russian nationality” plays its role. And, of course, there is an attempt to strike the right chord.

According to the media, Mr Gref called the claim initiated against him a fraud. But I cannot agree with him in this part. 

The fact of filing a lawsuit in American court is not a fraud. It is a constitutional right of any legal entity and person to turn to the court of any country if the rights have been considered violated by the individual or party concerned.

As journalists assert, the lawsuit initiated by PPF Management on behalf of their clients, Sergei Poimanov and Irina Podgornaya (who used to be majority shareholders of Pavlovskgranite JSC ed.), says that the defendants are supposed to have entered a conspiracy to raid Pavlovskgranite.  

From my point of view, it is very doubtful. Based on my experience I may say that neither Sberbank nor Sberbank Capital have ever been observed raiding. This makes it possible to think that there is no reason for such accusations.

And the last but not the least, I cannot say for sure that the NY Court has already admitted the PPF Managеment’s lawsuit against Sberbank and its CEO, as I have not read the case materials.  It may happen that it is no more than a pseudo-event. But even if the court has admitted the case it is not guaranteed that it will consider it. American lawyers may later declare that the case is not within its jurisdiction. And that is all.