BGP Litigation Secures Reversal of Appellate Ruling in a Dispute over Reclamation of Property from a Good-Faith Purchaser
BGP Litigation's Dispute Resolution team helped its client, Blago Ertil LLC, an agro-industrial company, secure a reversal of the appellate court ruling in a dispute over the reclamation of the value of several hundred tonnes of sunflower oilseeds stolen by fraudsters.
The dispute involved reclaiming the commodity value from a bona fide purchaser as unjust enrichment. The cause of action was based on the circumstances of the loss of possession of the commodity by the original owner as a result of the fraud. The appellate court, referring to the final and binding verdict in a criminal fraud case, concluded that the property had been withdrawn from the original owner's possession against his will and ruled that the defendant should pay the value of the commodity.
BGP Litigation's team joined the proceedings at the cassation appeal stage. The lawyers revised the defence strategy, focusing on application of Article 302 of the Russian Civil Code. Having taken the account of the current case law of the Constitutional Court of the Russian Federation, our firm's dispute resolution practitioners substantiated the necessity of distinguishing between a disposal of property at an owner's will and a disposal against such will, even in case of a fraud.
In the cassation appeal, our dispute resolution professionals proved that in the case in question, the original owner had voluntarily performed the legally binding acts to transfer the commodity, for which reason the commodity had been withdrawn from his possession at his own will.
Following the review of the cassation appeal, the district commercial (arbitrazh) court reversed the appellate court's ruling and upheld the decision of the first instance court to reject the claim.
Our lawyers' position helped develop a precedent-setting approach to application of Article 302 of the Russian Civil Code. The court upheld that a fraud conviction did not preclude the necessity of analysing the nature of the owner's intentions and the circumstances surrounding the property transfer. Such an approach is essential for safeguarding bona fide purchasers and further development of the case law.
BGP Litigation's dispute resolution team engaged in the project comprised Partner Vladimir Efremov, Senior Associate Igor Vershinin, and Junior Associate Marfa Makarova.
