Defendant protection in a dispute over a subcontractor agreement

Our firm’s lawyers protected a subcontractor in court. The said subcontractor was the defendant in the case and the claim amount exceeded RUB 25 mln.

A lawsuit was brought against our customer to recover an unjust enrichment to the tune of RUB 23.4 mln, with a penalty amounting to RUB 1 mln and interest on third-party money reaching RUB 1.3 mln.

The ground for the Claimant’s (Contractor’s) claims to the Defendant (Subcontractor) was that the Claimant had paid an advance amount totaling RUB 23.4 mln to the Defendant under the terms of the subcontractor agreement for design, construction and installation works on exterior piping for water supply, sewage and heat supply lines, and the Defendant in its turn had failed to perform the works under the agreement. Therefore, the Claimant withdrew from the above agreement and requested that the above unearned advance amount be paid back to it in full together with the corresponding penalty and interest.

The lawyers of our firm managed to defend their position in court, claiming that the Defendant had actually performed the works under the agreement and that the said performance could be confirmed not only by bilateral completion certificates but also through other evidence.

In support of their position, the lawyers of our firm provided the operations certificate (the scope of work transfer certificate) and the documents evidencing that the Defendant had indeed sent the documents confirming the actual work performance to the Claimant. Thus, the advance amount could not be deemed unearned and was not to be returned. The Claimant’s claim was dismissed under the ruling of the Arbitration Court.

It is noteworthy that without carrying out any construction and technical survey it was possible to prove that the works had indeed been performed.