COURT DEBARRED A FOREING INVESTOR FROM VOTING

At a general meeting of a strategic subsoil user

At the suit of the antimonopoly body of 15 July 2019, Moscow Arbitration Court deprived “Drilling Innovations M.E. Ltd.” of voting rights at a general meeting of “Oxet” Ltd., which under No.57-FZ Federal Law¹ is a company of strategic importance for national defence and state security.

FAS received a petition from the foreign investor in accord with the Law “On Protection of Competition” ². Considering the petition, the antimonopoly authority informed that pre-approval of the transaction intended by the foreign investor is necessary in accord to the procedures specified in No.57-FZ Federal Law.

The foreign investor ended up completing the transaction without an approval granted in line with the Law “On Protection of Competition” and No.57-FZ Federal Law. At the same time, transactions completed in breach of the legal norms³, are void.

FAS⁴ filed a suit to deprive the foreign investor of voting rights at a general meeting of the strategic company, which Court fully allowed.  

¹  No.57-FZ Federal Law “On the procedure of foreign investments in economic entities of strategic importance for national defence and state security” of 29.04.2008

²  No. 135-FZ Federal Law “On Protection of Competition” of 26.07.2006

³ Under Part 1 Article 15 of No.57-FZ Federal Law, transactions listed in Article 7 of No.57-FZ Federal Law and completed in breach of the norms of No.57-FZ Federal Law are void.

⁴ Under Part 2 Article 15 of No.57-FZ Federal Law