Press centre News

On January 13, 2015, the VEGAS LEX Dispute Resolution Practice won a case in the Ninth Commercial Court of Appeals for the sake of the Khanty-Mansiysk Non-State Pension Fund* in a dispute over a trust management agreement with regard to the fund’s pension reserves.

The dispute arose after the asset management company, TRINFICO Investment Group, broke the trust agreement: contrary to the fund’s orders, the company failed to sell unreliable securities to invest in better assets. The unsold securities eventually depreciated, which affected the overall value of the fund’s assets. Meanwhile, the more reliable securities that the asset management company was to buy went up, which led to damage and lost profit for the fund.

The case is currently at the appeal stage. A lower court ruled to collect the real damage for the pension fund’s sake, but not the lost profit. After that a cassation court overruled the earlier decision to reject the lost profit claim, and sent the case for review. The case was reviewed, and the court ruled to collect the lost profit from the asset management company. On January 13, the court of appeals supported that ruling.

This case is really unique because the practice of collecting lost profits has been highly negative in Russia. These claims are rejected more often than not because it is very difficult to evaluate this kind of losses.

However, the VEGAS LEX team has successfully convinced the court that the claim must be supported, because, according to the Supreme Commercial Court Presidium, a claim of loss can only be rejected when the size of such losses cannot be established. Considering the fact that other assets management companies serving the Khanty-Mansiysk Non-State Pension Fund under similar agreements earned an average of 7.5% annual income, the court ordered TRINFICO to pay 7.5% of the amount it would have gained by selling the bad securities as the fund ordered.

The ruling in favor of Khanty-Mansiysk Non-State Pension Fund was facilitated by the VL team led by Managing Partner Alexander Sitnikov and head of Litigation Practice Kirill Trukhanov.

***

*The Khanty-Mansiysk Non-State Pension Fund was established in 1995 by the Khanty-Mansi Autonomous Area (Yugra) represented by its state property management department. It is one of the top ten Russian non-state pension funds, servicing RUB9bln of pension savings deposited by the local insured persons under their mandatory pension insurance agreements.

For more information on VEGAS LEX’s dispute resolution services, including on the trust management market, please click here.