Public Procurement and Property, Public-private Partnership
In modern Russia, almost every entrepreneur in the course of its business faces the use of state or municipal property. For many years Rightmark Group helps clients to cope with the difficulties caused by the great number of legislative acts and procedures regulating public property turnover. The company specialists help to properly register acquisition of lease or ownership (according to privatization procedure) rights to state property, ensure preparation of bidding documentation and the client interaction with public authorities and organizations. The firm also provides competent legal assistance related to preparation and implementation of public-private partnership projects.
Services within the practice
Assistance in negotiation and execution of transactions with state property:
- purchase of rights to lease state-owned real estate:
- non-residential properties, including with a right of subsequent purchase thereof;
- land plots, including in built-up areas, in particular, for the purposes of real estate construction, for integrated development for housing construction.
- support of purchase (privatization) of state-owned leased premises by small and medium-sized businesses;
- preparation for purchase of land plots by owners of buildings and facilities;
- support of privatization of state unitary enterprises;
- preparation of a package of documents for participation in bidding (tenders, auctions);
- support of other transactions with state property (exchange involving state property, acquisition of property for uncompensated use, conclusion of servitude establishment contracts);
- provision of assistance in pre-trial settlement of disputes with public authorities regarding acquisition and use of state property.
Legal support of public-private partnership (PPP) projects:
- advising on issues of selection of forms of PPP projects, preparation and implementation thereof;
- analysis of risks emerging during implementation of PPP projects;
- development and negotiation of PPP agreements;
- legal support of tender documentation preparation and tendering process for the right to conclude a concession agreement.
Rightmark Group client won the auction for the sale of a right to conclude a contract for lease of a land plot to site a multi-storey apartment house in Nakhabino settlement in Moscow Oblast. The bidding was challenged by a bankruptcy trustee of LLC Razvitie Krasnogorskogo Raiona-Group, who referred to the right of the aforesaid company to conclude a contract for lease of the same land plot without auctioning. In witness thereof the bankruptcy trustee made reference to the corresponding judgment (delivered after the bidding was held without participation of the winning bidder).
Hence, to protect the client rights interests we represented its interests in two trials:
— with regard to challenge of bidding;
— with regard to acknowledgement of LLC Razvitie Krasnogorskogo Raiona-Group right to conclude a contract for lease without auctioning (where a judiciary act was passed without involvement of the winning bidder, and inclusion in the judicial process was at the appeal stage).
In a case where the right of LLC Razvitie Krasnogorskogo Raiona-Group to conclude a contract for lease without bidding was acknowledged, Rightmark Group secured the client involvement in the case as the third party and the case consideration in accordance with the first instance rules. Activities of Rightmark Group lawyers during the case reconsideration resulted in cancellation of the first judgment by the court of appeal.
Hence, in a case challenging the bidding reasons for the auction invalidation became inapplicable, and LLC Razvitie Krasnogorskogo Raiona-Group abandoned the claim. Thus, rights of Rightmark Group client to conclude a contract for lease of a land plot to site a multi-storey apartment house were completely restored.
What is equally important for the owner is that the court found that the property rights to the building were transferred to the company during the privatization. It is a well-known fact that complexity of registration of title in real property in the process of corporate assets privatization in the 90s, is associated with a need to associate specific real property with the property rather poorly described in previously issued documents.
In 1988, a contract was concluded for lease of production facilities with a purchase option. In 1992, the enterprise assets were purchased in the privatization process. Then in 2010, the City Property Management Committee stated that the disputed building was not purchased in the privatization process and was subject to privatization according to a special procedure. Since the special procedure was not complied with, the building remained the city property. The City Property Management Committee demanded to vacate the building, despite the fact that 18 years had passed and the building is located on the land leased by a commercial entity. Rightmark Group lawyers protected interests of the commercial entity, and the City Property Management Committee claim was dismissed.
Despite the court ruling, the City Property Management Committee attempted illegal seizure of the disputed building, which was successfully prevented by Rightmark Group lawyers. Immediately after the end of the first trial, the Committee illegally registered a title to the disputed building on its favour. To protect the violated rights of the company lawyers filed a statement of claim for declaration of title to the disputed building. A detailed analysis of the legislation in the area of protection of monuments and the relevant judicial practice made it possible for Rightmark Group to defend the client interests in courts of three instances: the company title to the disputed building was recognized.
In 2008, LLC Chevakino represented by Rightmark Group purchased at the Property Fund auction 2.17 ha in Nevsky district for RUB 1.1 billion. Under the contract with the City Property Management Committee the developer was obliged to construct an apartment house in this land plot in 49 months. However, the developer abandoned the project, due to the fact that CHPP-2 ash disposal area was discovered in the territory, which failed to comply with sanitary regulations for housing construction. The City Property Management Committee brought a court action for recovery of a RUB 333 million debt and about RUB 1.2 million fine from LLC Chevakino.
In early 2010, the committee decided to terminate the contract due to non-performance of investment terms. The developer filed a counterclaim with the court, also seeking termination of the contract and return of transferred funds, as an ash disposal area was discovered in the territory that was not mentioned in bid documentation. Thus, through the legal assistance of Rightmark Group, a dispute between the developer and the city was settled amicably, which prevented adverse financial and reputation consequences for both parties.
Rightmark Group lawyers stood at the origins of the practice of compulsion of the state to sell real estate wrongly excluded from the group of privatization property. Thus, back in 2005, Rightmark Group lawyers represented interests of a major company intending to purchase a 9,000 sq. m building which was erroneously excluded from the list of privatization objects. The building in this case was located in the territory of this company.
According to the government position at that time, these facilities could be sold only at the initiative of the Government, and not at the purchaser option. However, with the legal assistance of Rightmark Group, the purchaser won the case in courts of all three instances. Only in 2008 the Presidium of the Supreme Arbitration Court of the Russian Federation expressed support for the position advocated by Rightmark Group lawyers back in the day.
Managing Partner of Rightmark Group legal firm