SUPREME COURT UPHELD DECISION OF FAS TO RECOVER SHARES OF PLUTON COMPANY TO STATE`S INCOME

A group of persons with the participation of foreign companies illegally established control over the enterprise of the military-industrial complex

A group of individuals and legal entities with the participation of foreign companies, in particular Master Group AG, Inc. (British Virgin Islands) and Marlborough Estates Limited (Bahamas), without the approval of the Government Commission on Monitoring Foreign Investments in the Russian Federation, established control over the Russian strategic enterprise of the military-industrial complex Pluton JSC.

The FAS Russia, jointly with the Prosecutor General`s Office of the Russian Federation, filed a lawsuit to declare the transaction invalid.

Having considered the arguments of the lawsuit, the Moscow Arbitration Court declared the transaction invalid and ruled to recover 100% of the shares of the strategic enterprise to the income of the Russian Federation.

The companies tried to challenge the decision and filed an appeal to the Ninth Arbitration Court of Appeal, and then a cassation appeal to the Moscow Arbitration Court. However, the Supreme Court of the Russian Federation supported the position of the Authority and refused to transfer the defendant`s cassation appeal for consideration at a court session of the Judicial Board on Economic Disputes of the Supreme Court of the Russian Federation*.

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* In accordance with the Part 1 of the Article 15 of the Federal Law of April 29, 2008 No. 57-FZ "On the Procedure for Foreign Investments in Business Entities of Strategic Importance for Ensuring National Defense and State Security", the transactions specified in the Article 7 of this Federal Law and committed in violation of the requirements of this Federal Law are void.