Monday, April 22, 2013

Russian Court Awards Record $1 Mln Attorney Fees

The Moscow Circuit Federal Arbitrazh (Economic) Court affirmed a record award of legal fees of about $1 mln. On August 30, 2012, the Moscow Arbitrazh Court set a precedent for determination of the legal costs amount - around USD 1 mln. (over 28 mln. rubles and USD 121,000.00) were recovered in favor of the Cyprus company Arooj Holdings Limited from the retailer Billa. The amount in dispute was 388 mln. rubles in rents owed by  retailer  to a landlord.  The interests of the Cyprus party were represented by the lawyers of the Russian law firm Muranov, Chernyakov & Partners. The plaintiff won and the retailer paid the principal award, but challenged the amount of the legal fees. On appeal the amount of the fee award was reduced to only $75,000, because most of the fee was a contingency fee, which is unenforceable in Russia. However, the Moscow Circuit (a third instance court) found that the $1 mln amount is close to what could be charged under normal hourly rates ($850 for a partner etc.) and affirmed the award. This is an absolute record: normally courts award legal fees within $2,000 or so and only in exceptional circumstances the awarded fees have reached $10,000.

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