International Trade Transactions
Legal Opinion on the Settlement of Cross-Border Debt
As part of a legal team, I contributed to the preparation of a legal opinion concerning the settlement of debt arising under international sale of goods agreements and an agreement for the sale and purchase of an interest in the charter capital of a Russian limited liability company, entered into between Russian and foreign parties.
Solution
One of the key issues was whether the purchase price for the interest could be transferred by a Russian legal entity to a foreign seller from an “unfriendly” state. The transaction had been completed and the interest transferred before the issuance of Presidential Decree No. 618 dated 8 September 2022; however, due to a deferred payment arrangement, the purchase price remained unpaid after the relevant restrictions came into force. The legal consequences of this situation were assessed, including the need to obtain authorization from the Government Commission for Control over Foreign Investments.
The analysis also covered the consequences of the foreign seller’s failure to supply goods that had been paid for in advance due to sanctions imposed by a foreign state, as well as the risks associated with the application of Russian counter-sanctions regulation.
In addition, the possibility of setting off claims denominated in different currencies was examined, including where authorization from the Government Commission was required for the performance of one of the claims. The prospects of recognition and enforcement of a Russian court judgment in a foreign jurisdiction were also analyzed, taking into account sanctions restrictions, applicable rules on the enforcement of judgments and the jurisdiction clause agreed by the parties.