Litigation Practice of EPAM defended the interests of the international consulting company IMC Montan in an exceptional litigation over an attempt to recover damages allegedly caused by consulting services.

IMC Montan was engaged in an audit of the coal mine development project prior to the closure of a deal on acquiring a stake in the coal mining company that owned the open pit. The transaction was financed by a bank that provided the buyer with a USD 140m loan.

A year later, the buyer defaulted on the loan, therefore the bank had to initiate bankruptcy procedure. Subsequently, the bank has filed a lawsuit against IMC Montan for damages in the amount of the outstanding loan, in an attempt to prove that the audit report has (allegedly) contained unreasonable conclusions about the mine’s production performance. This has served as the ground to a positive decision to issue a loan, which, in the end, has not been paid by the enterprise.

EPAM’s attorneys have achieved the rejection of the bank's claims of damages in full,  proving that the audit report was based on the current project documentation, it characterised the development prospects and should not be considered as a ground for issuing a loan (since the bank is responsible for the decision to loan out funds).

This dispute is significant for the market of consulting services as well as for investments in mining projects as it tries to hold an external consultant accountable for the actions of the debtor. In the event of a loss, it could set a dangerous precedent, giving banks a “green light ” to shift commercial risks onto a third party.

The Firm’s Litigation Practice team worked on this project, represented by Partner Denis Arkhipov, Partner and Counsel Oleg Bouiko.