On 30 January 2018 at St. Petersburg City Court, EPAM defended the interests of companies belonging to the Transstroy Group in high-profile legal proceedings over whether notarial actions may be challenged.

In July 2017 the St. Petersburg Committee for Construction unilaterally cancelled government contracts which had been signed with the Transstroy Group companies for the construction of the Krestovsky Island sports stadium. The Committee further refused to accept and pay for the work that had already been done, or to comply with proper procedures for construction site handover. The site had been handed over to another contractor, giving rise to a real risk that the result of the companies’ work would be lost and the work done would be duplicated.

Under these circumstances, in order to produce a record of the objective state of the site, the companies were obliged to call in an official – a notary – who inspected the construction site and recorded the objective state of the ready-built stadium. The notary invited the Committee for Construction to join the inspection, but the Committee’s representatives did not do so, though they were present on site. The Committee for Construction and its subordinate Fund for Capital Construction attempted to challenge these notarial actions, and even to deny that the notarial inspection had taken place at all.

As a result of the proceedings, the St. Petersburg City Court acknowledged the legality of the notary’s actions and the contractors’ right to notarize evidence, and dismissed the claims lodged by the Committee and the Fund.

Ivan Smirnov, Managing Partner of the St. Petersburg Office of EPAM: “Notarization of evidence is in many cases the only means of obtaining an objective record of key facts and further defending a client’s interests in court. In a case such as this, wherein the customer has taken over the site, unlawfully denied that work has been done, and refused to pay for it, only a notary, as an independent third party, may record the objective state of the site.

“The St. Petersburg City Court has acknowledged the legality of notarial records regarding a site in such cases, which is fully consistent with existing judicial practice. This position will enable many more companies to mount effective resistance against actions taken by mala fide counterparties”. 

The deed of notarial inspection together with the as-built documents and other necessary papers provided the basis for the Transstroy Group companies’ position in their dispute with the Committee for Construction. Assisted by the Firm, the Companies are challenging the unlawful termination of the contracts and seeking confirmation of the volume of work completed but not paid for by the customer. During the court case, the Client repeatedly petitioned for a comprehensive expert examination of the work carried out at the stadium, but none of the petitions has so far been granted.

The Client was represented by Ivan Smirnov, Managing Partner of the Firm’s St. Petersburg Office; senior associates Evgeny Gurchenko and Artem Magunov; associate Alexander Svashenko; and junior associate Olga Kovelianova.