ALRUD experts speak on recovery of loss on M&A: how it works in case of misrepresentations

On June 18, 2025 Pravo.ru published an article «How to compensate for loss in case of misrepresentations in M&A».

The article closely considers legal mechanisms of loss recovery on M&A in case of misrepresentations by one of the parties. In accordance with the Russian Civil Code the misrepresenting party has to compensate the affected party for loss including both actual damage and lost profit.

The authors of the article - Andrey Zharskiy, Partner, PhD in Law, Advocate in Russia, and Yuriy Nakul, Senior Associate - analyze the key principles of full recovery of loss which suggests that the affected party should be put in a position where it would have been if the representations had been true. It is also noted that the Russian case law has not yet developed a unified approach to estimation of such loss which presents some challenges for counterparties.

Particular attention was paid to loss assessment methods including comparison of shares market value in cases of representation and misrepresentation. Other controversial topics, such as evaluation date or environmental effect, were also discussed. The problem of lost profit and its influence on loss estimations was also considered.

The article specifies that the Russia'a Supreme Court has recently confirmed the opportunity to include the clause on «liquidated damages» into agreements which opens the potential for mitigation of risks while structuring M&A deals.

Here you can read the full article.