Sergey Petrachkov

Sergey Petrachkov

Partner, Advocate, PhD in Law
Sergey Petrachkov

Chambers Europe

All his recommendations turned out well and we like how he arranges work with the client. He anticipates solutions and is also good in client relations.

Biography
Recent work
Publications and Insights
Rankings and awards

Sergey Petrachkov is the ALRUD Partner, heading Dispute Resolution and Restructuring/Insolvency Practices.

Sergey has a considerable experience in representing clients’ interests in business and corporate disputes in public courts. He also advises on issues relating to International Commercial Arbitration and represents clients’ interests in the course of arbitration proceedings.

Sergey takes part in matters involving restructuring and insolvency including complete legal support of insolvency proceedings and participation in separate projects relating to actions againt assets strippnig, challenging debtor’s transactions and bringing debtor’s controllers to subsidiary liability.

Sergey represented clients’ interests before the Supreme Arbitration Court of the Russian Federation and the Supreme Court of the Russian Federation on numerous occasions. Throughout all his carrier he has been supporting major companies in different areas including automobile sector, banking and finance, IT, consumer products, and retail trade.

Sergey joined ALRUD in 2009. Sergey graduated from The National Research University Higher School of Economics, law department in 2008. Ph.D. in Law (2012). Sergey has been on secondment at Slaughter and May, the top ranked magic circle law firm in London, for 6 months (2015-2016).

Sergey is a member of the International Bar Association (IBA), American Bar Association (ABA), INSOL International and the Moscow Bar Association.

Include advising:

A major Russian iron and steel company

in the international commercial arbitration subject to the ICC rules with regard to a claim against the German metallurgical giant for the amount of EUR 150 mln.

A subsidiary company of SC “Rosatom”

in the course of a business dispute and subsequent engineering plant insolvency case. The amount of the client’s claims exceeded RUB 400 mln.

A major international auto manufacturer

on a dealer’s claim for damages in the amount of about RUB 15 bln in connection with termination of several dealer agreements.

Private client

in the course of a dispute over a brokerage servcies agreement amounting to more than USD 24 mln against a leading Russian investment bank Renaissance Capital.

A client

in the course of one of key business corporate disputes in Russia relating to Norilsk Nikel.

Automotive components manufacturer

in the course of a dispute with an affiliate company of Sollers Group in a case on recognition and enforcement in Russia of an arbitration award subject to LCIA rules, contesting a voluntary liquidatuion of a respondent (both cases reached the Presidium of the Supreme Arbitrazh Court of the Russian Federation), and then in the course of insolvency proceedings of the respondent.

The Supreme Court of the Russian Federation clarified the issues on the application of conflict rules by Russian courts
On 09 July 2019, the Plenum of the Supreme Court of the Russian Federation enacted the Resolution “On application of conflict rules by the courts of the Russian Federation” (hereinafter – the “Resolution”). In this Resolution, the Supreme Court of the Russian Federation (hereinafter – the “Supreme Court”) confirmed some approaches to interpretation of conflict rules elaborated in the court practice and the doctrine. Also, it established some new legal positions, which comply with current international approaches. The explanations, provided in the Resolution of the Supreme Court, concern the following main issues: The broad interpretation of the foreign element The Supreme Court held that the list of foreign elements, which included the foreign party and foreign subject matter of legal relations, pursuant to para. 1 article 1186 of the Civil Code of the Russian Federation (hereinafter – the “Civil Code”), was not limited. In particular, actions and events, which took place outside of Russia and led to the creation, change or termination of legal relations, may be recognized as foreign elements as well. This interpretation aims to eliminate the lack of clarity in disputes between Russian parties, concerning acts effected abroad. In practice, the presence of the foreign element could be useful, e.g. in this case parties may agree that the contract shall be governed by non-Russian law. The definition of a close link between the legal relation and the law of the state According to the general rule, when the applicable law cannot be defined, the court shall apply the law of the state, with which the legal relation has the closest link. In this regard, the Supreme Court elaborated some criteria for establishing such a close link, which were: (1) the territorial link between elements of legal relations and the law (including place of residence / incorporation, location of the object of legal relations, place of fulfillment of obligations), and (2) the probability to effectuate common principles of civil law and separate legal institutions (e.g. the good faith principle) in the most effective way. The application of mandatory rules According to the current legislation, the courts must apply Russian compulsory rules, if such rules have a significant meaning for ensuring the rights and legal interests of parties, regardless the applicable law chosen by parties (mandatory rules overriding mandatory provisions). The Supreme Court clarified that only those rules, which aim to defend the public interest, related to the basis of economic, political or legal system of the state (e.g. the prohibition for foreign parties to acquire land plots in Russia, in some cases) shall be deemed as mandatory. In the Resolution, the Supreme Court established the volume of application of foreign mandatory rules. The Supreme Court stated that such rules could be applied only if their purpose and nature complied with the fundamental requirements of Russian legislation; did not interfere into the sovereignty, or security, of Russia and did not violate constitutional rights and freedoms of Russian individuals and legal entities. The law applicable to the grounds of invalidation of transactions According to the general rule, lex contractus applies to consequences of invalidation of transactions, regardless of grounds for such invalidation (para. 6 Sect. 1 Art. 1215 of the Civil Code). In this regard, the Supreme Court stated that different conflict rules applied to different grounds of invalidation of contracts (e.g. if validity of the con-tract was challenged due to the breach of its form, the court shall apply the law which applied to a form of transactions). However, if the contract is challenged due to the inconsistency between the will and expression of the will of parties, courts shall apply the law chosen by the parties. In a case when parties did not choose the law, the courts shall apply common conflict rules. The choice of the applicable law by parties The Supreme Court established the possibility to choose the rules of lex mercatoria (e.g. UNIDROIT Principles of international commercial contracts, Principles of European contract law, Principles, Definitions and Model Rules of European Private Law – Draft Common Frame of Reference and others) as applicable law (i.e. not only as subsidiary rules). Moreover, the Supreme Court confirmed the possibility of parties to choose a neutral law, i.e. a law, which did not relate to parties, nor subject matter, of the contract. The Supreme Court also confirmed the possibility of parties to apply a different law to different parts of contracts, if the application of the law did not entail either insuperable contradictions, or invalidation of the contract in full, or in part. Otherwise, the agreement on applicable law becomes unenforceable and courts shall establish the applicable law, according to general conflict rules. The possibility not to apply conflict rules The Supreme Court split conflict rules between mandatory, i.e. rules that shall be applied in any case, and optional, i.e. rules that may be not applied. In particular, the Supreme Court confirmed the possibility of not applying conflict rules defining the law applicable to the contract (paras. 1 – 8 article 1211 of the Civil Code), if the court recognized that the contract had the closest link with the law of another state. Further, the Supreme Court stated that it was possible to recognize that the buyer (not the seller) in the sale-purchase agreement was the party, which provided the characteristic performance, if this buyer undertook sufficient obligations (e.g. ensuring the advertisement of acquired goods). Simultaneously, the Supreme Court stated that it was not possible to avoid application of some conflict rules (e.g. the conflict rule determining the law applicable to immovable properties). The criteria of agreement on choice of the applicable law The Supreme Court determined the criteria of implied choice of law: (1) parties referred to the separate civil law rules in the agreement, (2) parties referred to the same law when grounding their claims (e.g. in procedural documents), (3) the choice of the applicable law was made in an agreement, which closely related to other agreements between the same parties. The Supreme Court also stated, that the choice of a seat of arbitration itself did not mean that parties chose the law of a seat of arbitration, as the law applicable to the contract. The possibility of parties to enter into alternative agreement on a choice of the applicable law The Supreme Court confirmed the possibility of parties to provide the condition that the choice of the applicable law should depend on the choice of the claimant, or to provide that the law of the claimant (or the defendant) shall apply (alternative (conditional) agreement on choice of the applicable law). The Supreme Court also stated that, in this case, the applicable law was fixed at the moment of bringing a first lawsuit and could not be changed later. Simultaneously, the Supreme Court clarified that such an alternative agreement could not depend on the will of only one party to the contract. The violation of this rule leads to the invalidation of the agreement on choice of the applicable law. In our opinion, the Resolution is important for court practice, as the Supreme Court established some new approaches to the understanding of private international law, that may be helpful for dispute resolution in Russian courts. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Dispute Resolution Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
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Vienna International Arbitral Centre obtained the right to administer arbitration disputes in Russia
On 18 June 2019, the Council for Arbitration Development at the Ministry of Justice of the Russian Federation, authorized Vienna International Arbitral Centre («VIAC») to administer arbitration disputes with the seat (place of the arbitration) in Russia. According to Secretary General of VIAC, Dr. Alice Fremuth-Wolf, the arbitration institution receives approximately 60 – 70 claims per year, with 5 – 7 involving Russian parties. VIAC is included in the «white list» of Global Arbitration Review, recommended by International Bar Association. Parties from more than 50 countries around the world use the services of the Centre (more than 70% of these parties are from European countries). By 08 July 2019, the Ministry of Justice is expected to include VIAC in the list of foreign arbitration institutions, with the status of a permanently functioning arbitration institution («PFAI»). VIAC is the second foreign arbitration institution, after Hong Kong International Arbitration Centre. The latter obtained PFAI status in April 2019. It is important to note that, as VIAC does not have a separate subdivision in Russia, it is still precluded from administering domestic disputes and some categories of corporate disputes. We wish to remind you that, as a result of the arbitration reform awards of foreign arbitration institutions, that are not included in the above-mentioned list, are deemed to be rendered ad hoc, which implies certain restrictions in comparison to the awards of the PFAIs. The decision of the Council for Arbitration Development is an important step towards the development of arbitration in Russia and promotion of its attractiveness as an alternative mechanism of dispute resolution. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Dispute Resolution, Corporate and M&A Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the authors of this letter bear any liability for consequences of any decisions made in reliance upon this information.
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Hong Kong International Arbitration Centre has obtained the right to administer arbitration disputes in Russia
On 04 April 2019, the Council for Arbitration Development at the Ministry of Justice of the Russian Federation authorized Hong Kong International Arbitration Centre (“HKIAC”) to administer arbitration disputes with the seat in Russia. By 25 April 2019, the Ministry of Justice is expected to include HKIAC into the list of foreign arbitration institutions with the status of a permanently functioning arbitration institution (“PFAI”). We remind our readers that as a result of the arbitration reform, awards of foreign arbitration institutions that are not included in the above mentioned list are deemed to be rendered ad hoc, which implies certain restrictions in contrast as compared to the awards of the PFAIs. The new status of HKIAC, as the only foreign insti-tution competent to arbitrate disputes seated in Russia, gives it several advantages. First, HKIAC is now authorized to arbitrate the following types of Russian corporate disputes: (A) disputes concerning the ownership of shares in the Russian companies, particularly disputes arising out of share purchase agreements; (B) disputes arising out of agreements between shareholders of the Russian companies concerning the management of that company, including disputes arising from corporate (shareholders’) agreements. We draw your attention to the fact that HKIAC does not have special rules for corporate disputes. Because of this and due to the conflicting Russian regulation, we may not exclude the risk that arbitration of the disputes mentioned in par. (B) by HKIAC may be problematic. Additionally, the lack of special rules for corporate disputes prevents HKIAC from arbitratingsomeother corporate disputes. The second advantage of the new status of HKIAC is that its awards from now on will be considered final, provided the text of the arbitration agreement expressly stipulates it. Moreover, PFAI status allows the parties to the arbitration to apply to a state court for assistance in evidence collection, as well as to limit the powers of the state court to intervene into the proceedings, particularly, on the issue of appointment and challenge of the arbitrators. It is important to note that, as HKIAC does not have a separate subdivision in Russia, it is still precluded from administering domestic disputes between Russian parties with the seat of arbitration in Russia. In addition, in accordance with Russian regulation, some corporate disputes remain non-arbitrable, particularly disputes regarding Russian strategic companies. The decision of the Council for Arbitration Devel-opment is an important step towards the devel-opment and promotion of arbitration in Russia as well as towards more efficient enforcement of the legalagreements entered in respect to the Russian companies. Amongst the abovementioned benefits, the approval of HKIAC’s requestmay encourage other foreign arbitration institutions to submit their requests for authorization to administrate disputes with the seat of arbitration in Russia. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Dispute Resolution, Corporate and M&A Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
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Russian arbitration law reform
On 27 December 2018, the Russian President signed an Amendment Law into the Russian Law on Arbitration. The Amendment Law represents a further step forward in arbitration reform, which Russia is going through, that started from 2015. Previously, the arbitration reform applied only to the four domestic arbitration institutions that were allowed to arbitrate disputes in Russia. Those institutions were the International Commercial Arbitration Court (ICAC), the Maritime Arbitration Commission (MAC) at the Russian Chamber of Commerce and Industry (both were exempted from the obligation to obtain a license), Russian Arbitration Center at the Institute of Modern Arbitration and Arbitration Center at the Russian Union of Industrialists and Entrepreneurs (RSPP). The Amendment Law is aimed to liberalize the legal framework of arbitration institutions and simplify the process of obtaining licenses by domestic arbitration institutions. Furthermore, the Law annuls the necessity of obtaining such licenses by foreign arbitration institutions, but rather vests, on the Ministry of Justice, an obligation to maintain the list of reputable foreign arbitration institutions. There is still a requirement to apply to the Ministry of Justice, in order to be included in the mentioned list and be able to administer domestic disputes, or foreign disputes, with a Russian seat of arbitration. However, cancellation of formal licensing of foreign arbitration institutions is a good sign. As of today, the Council for Development of Arbitration is considering the application of one of the most reputable foreign institutions of the Far East and the legal community is optimistic about it, as it may serve as a good example of entering into the Russian arbitration market. Those arbitration institutions, which do not have licenses, are prohibited from performing any activity relating to arbitration and administration of disputes. In addition, non-licensed institutions, as well as ad hoc arbitrations, are not allowed to advertise their services in any form, including advertising on the Internet. The mentioned amendments are aimed at further elimination of the Russian arbitration phenomenon called “pocket” arbitration. The Amendment Law also changed the approach, previously established for corporate disputes arising out of shareholder agreements. Previously, the arbitration law provided that such disputes could only be considered by permanent arbitration institutions, which adopted arbitration rules for corporate disputes. The Amendment Law cancelled this rule and allowed administration of such disputes, with the seat of arbitration in Russia, by permanent arbitration institutions, which do not have such rules. The Amendment Law further provides that it is sufficient to conclude an arbitration agreement between the parties of the shareholder agreement, clarifying the previous controversial wording of the Arbitration Law, which prescribed that all shareholders, as well as the company itself, shall be the party to arbitration agreement. The Amendment Law further grants the Council for Development of Arbitration, which initially was created to provide recommendations in licenses’ issuance, the powers to analyze the case law on arbitration. We note that the amendments have been introduced into Arbitration Law, but we hope that the corresponding amendments in procedural codes, relating to arbitration, will soon follow. The Amendment Law comes into force on 29 March 2019. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Dispute Resolution, Corporate and M&A Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
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Review of the Russian court practice regarding influence of the anti-Russian sanctions on contractual obligations
As you know, the first international economic sanctions against the Russian Federation were imposed in 2014, due to the situation in the Crimea. Since then, the EU and the USA have imposed a number of the anti-Russian sanctions, having a significant, consequent impact on the fulfillment of civil obligations in Russia. In light of the above, and due to the growing pressure of the anti-Russian sanctions, and the increasing number of the entities in respect of which new restrictions are being imposed, we present, for your attention, an overview of the legal positions of the Russian courts on the impact of the sanctions regime on the discharge of contractual obligations. Click here to learn more. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Dispute Resolution Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
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Chambers Europe, 2019 recommends Sergey Petrachkov for Restructuring/Insolvency.
The Legal 500 Europe, Middle East & Africa 2019 recommends Sergey Petrachkov for Dispute Resolution, Restructuring/Insolvency и White-collar crime.
Best Lawyers 2020 recommends Sergey Petrachkov for Arbitration and Mediation.
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