“Kremlin’s banker” switches
The international journal of gacommercial and trearty arbitration counsel for claim against Russia
Tom Jones NEWS 1 July 2016
Sergei Pugachev (Credit: wikicommons/Visuals Editor)
A former adviser of President Vladimir Putin once known as “the Kremlin’s banker” has replaced King & Spalding with Parisian boutique Lazaref le Bars as his counsel in a US$12 billion investment treaty claim against Russia. As of 2 June, a team led by managing partner Benoit Le Bars is advising Sergei Pug- achev, a French national since 2009, in a claim at the Permanent Court of Arbitration in The Hague over the alleged takeover of shipbuilding, energy, mining and real estate assets in Russia. The claim is thought to be the largest ever brought by an individual against a state. Russia has yet to appoint counsel and is expected to decline to participate in the case. Le Bars says that Pugachev has already appointed French academic Thomas Clay as his arbitrator for the claim, which is being brought under the French-Russia bilateral investment treaty. He says they are now awaiting Russia’s nominee and the appointment of a chair. In keeping with the time limits imposed in the BIT, Le Bars says he expects the tribunal to be constituted by September – even if the PCA is required to select arbitrators without Russia’s input. “There have been cases in the past where Russia has said it won’t participate – this is something we may have to handle, and we are prepared for this,” Le Bars says. Pugachev’s senior litigation adviser J Michael McNutt of Labyrinthium Investments and Risk Management, says that his client is “extremely excited” to be working with Le Bars and his team and is “fully supportive of their eforts”. “We have instructed Lazaref Le Bars to proceed as quickly as possible to obtain provi- sional measures against Russia to stop its continued abuse and harassment of our client, as well as to freeze Russian assets wherever possible to ensure a payment of any award,” he says. Pugachev previously took counsel from King & Spalding, with New York-based partners Edward Kehoe and Caline Mouawad leading the team. The team had also been acting for Pugachev in proceedings in the UK High Court, but in January won permission from the court to withdraw as counsel.