News

Vegas Lex has defended the interests of its client British Airways in a landmark case brought before the RF Supreme Arbitration Court relating to the payment of Russian profit tax. The dispute was caused by a different understanding of the term “profit from aircraft operation” held by the tax authorities and the airline.  On 17 November 2009, the Presidium of the RF Supreme Arbitration Court held in favour of British Airways without remanding the case to lower courts. The resolution sets a precedent not only for British Airways, but the entire foreign aviation industry in Russia, as it influences the cases involving other airlines that are currently heard at different levels in the arbitration courts of Moscow.Vegas Lex experts have been advocating the case from the court of original jurisdiction, namely the Moscow Arbitration Court. According to Oleg Bazhenov, Head of the Tax Litigation and Consulting Practice, the case moved heavily, the lower arbitration courts of three instances took up the tax authority’s position despite its obvious variance with the existing international treaties. “Our lawyers defending the air company had to expend considerable effort to turn the tide”, commented Mr. Bazhenov. Following the lawsuit, Sukhjinder Mann, Regional Finance Director North Europe at British Airways, said: “Naturally, I am delighted at the result of this landmark case for the commercial aviation industry in Russia. I have always been convinced that there will be a rationale outcome to this tax dispute. I would also like to thank our Vegas Lex lawyers – Oleg Bazhenov and Andrey Tsyb, who have been supporting me on this issue for the last 18 months”.