The Supreme Court allowed a cassation appeal filed by the Firm’s lawyers and set aside an illegal Starooskolsky Court judgment dismissing a suit for division of shares in a major construction company in the Central District constituting marital property.

During 38 years of their life together, spouses consolidated a controlling stake in the region’s largest construction company – AO KMAprojectzhilstroy. In 2015, their family fell apart and wife instructed the Firm to represent her in divorce proceedings. The opponent (ex-husband) is an influential businessman in the Belgorod region.

Both Starooskolsky and Belgorod courts obstructed the division of their marital property and authorized the dilution of the stake in favor of the husband’s close friend. Following almost two-year-long proceedings, the courts dismissed claims for the division of AO KMAprojectzhilstroy shares, holding that former spouses had allegedly reached oral agreement to divide the shares in 1:21 proportion (in the husband’s favor). The courts dismissed the client’s demands to strip her unscrupulous husband who had diluted the controlling stake of all of their common shares acquired during marriage.

Having exhausted all remedies available in the region, the Firm’s lawyers applied to the Supreme Court. Having examined facts of the case, the Supreme Court declared the lower courts’ conclusions as to the “existence” of an arrangement for the division of their shares to be unlawful and remanded the case for further proceedings for proper assessment of husband’s bad faith conduct to dilute the shareholding.

Partner Denis Arkhipov, Senior Associate Oleg Bouiko, Associates Alexander Kiselev and Alexander Podgorny were working on the case.