Protecting a Co-Investor’s Interests in the Construction of a St. Petersburg Facility

Two investors participated in building a major sports facility in St. Petersburg. The total contribution amount was over RUB 500 million and was distributed equally between the investors. One of the investors subsequently decided to withdraw from the project, which resulted in a number of lawsuits between the remaining investor and the contractor.

The project support’s main feature and turning point were the actions of Osip Rumyantsev, the law firm’s Managing Partner. He was able to prove in the court of appeal that co-investor relationships were classified as plain partnership. Thus, Co-Investor 1 who withdrew from the project and left Co-Investor 2 to handle the claims filed alone, appeared under threat to share the responsibility for the debts incurred during the construction period with the latter.

The outcome of these travails was the signing between the co-investors and contractors of a trilateral amicable settlement agreement with flexible arrangements for setting reciprocal debts by installments, thereby exempting parties from multi-year and costly litigation. At the same time, the customer saved RUB 160 million.