Russian sac recovers actual damage and lost profit from Russian FCS.


Legal Update No. 323
Goltsblat BLP advises that, on 17 January 2012, the Presidium of the Russian SAC issued a Ruling under Case No. А40-89211/10-30-762 recovering real damage and lost profit from the Federal Customs Service in favour of an exporter owing to an unlawful order.

In December 2008, by means of Order No. 1514 dated 2 December 2008, the Russian FCS limited the number of checkpoints for declaring waste and scrap iron exported from the Russian Federation. Export of these goods from Primorsk Territory ports was prohibited. As a result, OOO Primorskiy Metallo Export, holding a Primorsk Territory export licence, was unable to perform under iron export agreements and incurred related damage.

On the basis of claims submitted by this and certain other companies, the Russian FCS's order was made inoperable as being inconsistent with the Russian Customs Code.

Further, Primorskiy Metallo Export claimed recovery of real damage and lost profit at law. Courts of three instances dismissed the claim.

The company filed an application for supervisory review of the court decisions. In this context, the judges' ruling to transfer the case to the Presidium of the Russian SAC noted the following:

  • recognition of the order as unlawful and violating the company's rights should entail damage recovery.
  • if the arbitration court decision had invalidated the order, this fact should not be re-confirmed during the damage recovery case.
  • in case of this prejudice, in order to receive damage recovery, the claimant should prove the following: 1) a causal link between the order and the damage; 2) the amount of the damage.

Finally, the Presidium of the Russian SAC supported the exporter and satisfied its claims. One new development is that the Presidium of the Russian SAC has not limited the government authority's liability to real damage but has also sanctioned recovery of the lost profit.

This is the first judicial precedent on civil liability of the Russian FCS in relation to an unlawful regulatory act. We believe this decision will have a substantial disciplinary effect both on the Customs Service and other government authorities in adopting legal acts and will contribute to the government authorities' approach to positions of and proposals from the business community.
For additional information, please contact:

to Vladimir Tchikine
Partner, Customs and Currency Regulations,
Goltsblat BLP
T: +7 (495) 287 44 44,

to Alexander Kirilchenko
Associate Customs and Currency Regulations,
Goltsblat BLP
T: +7 (495) 287 44 44,

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