Western sanctions imposed on Russia could force international firms to close their offices there, the former head of magic circle firm Freshfields Bruckhaus Deringer’s Russian dispute resolution practice has said.
Maxim Kulkov (pictured), who co-founded litigation boutique Kulkov, Kolotilov & Partners in Moscow this month, said international firms face numerous challenges resulting from organisations wanting to resolve their disputes at home and EU and US sanctions imposed on Russia in response to the annexation of Crimea.
He said: ‘I think we will see a certain increase of local boutiques. International firms will certainly downsize their offices in Russia and perhaps a few of them [will] close their offices.’
Victor Dumler, of Dumler and Partners in St Petersburg, said notable Russian firms had evolved into ‘serious players’ in the legal market. In the present situation, he said, some clients - especially Governmental bodies and state-owned companies - tended to favour Russian firms.
Kulkov said it is currently a ‘good time’ for local litigators as there are ‘lots of disputes’ - such as within joint venture agreements - arising from the current economic instability.
Washington-based Covington & Burling partner Kimberly Strosnider, who advises companies on the application of international trade controls, said asset-blocking sanctions impose broad restrictions on US persons dealing with parties who have been placed on a ‘specially designated nationals’ list.
Sectoral sanctions, while not as extreme as asset-blocking sanctions, place restrictions on certain types of activity, such as providing services in support of the exploration and production of certain types of projects in the energy sector.
Last week EU leaders gathered for a two-day summit at which they were expected to discuss the sanctions imposed on Russia.
Stephen Denyer, the Law Society’s head of City and international, said many leading London firms have had Moscow offices for more than 20 years. During this time, he stressed, there had been several occasions when sanctions or other restrictions had been in place.
He added: ‘This is something these firms and their clients take in their stride.’