June 29th, 2016 saw the Russian Arbitration Association successfully hold yet another conference, titled “Collecting Bad Debts: Throwing Good Money After Bad?”. The first of its kind to be held in Moscow, the conference addressed several burning issues, including asset tracing, freezing and third-party funding.
Featured, were presentations on very well known cases – VTB vs Skurikhin, Mezhprombank & DIA vs Pugachev, among others. Over 120 participants gathered to listen to leading professional in debt management, from Russia, UK, Cyprus, the Netherlands, Switzerland, and other countries.
Roman Zykov, general secretary of RAA opened the event, with a welcome address, in which he pointed out the importance of properly addressing the issue of collecting bad debts, especially, with regard to mutually beneficial business relations between Russia and other countries. Mr. Zykov touched on issues related to third-party funding, and trends in international commercial arbitration.
Duarte Henriques, Partner, BCH Lawyers, member of ICCA, Queen Mary University Task Force on Third Party funding, opened the first session with a presentation on the institution of third party funding and its principal problems. These included: problems with calculating the success of funded project, commercial litigation, government and nongovernment third-party funding, and resulting business regulation. James Popperwell, Partner, Macfarlanes talked about the theory of third party funding, preventing small financial institutions, from being engulfed by the giants and the British court practice in this instance. Michael Redman, Director, Buford Capital spoke about the competition between financial institutions for ‘sponsorship’ rights, shedding light on their client history. Tatiana Menshina, Partner, Withers Worldwide talked about the downside of third party funding. One of the point of focus, was the potential conflict of interest between the financing institution and arbitration panel, which her report pointed out, leads to a subjective analysis of a dispute, arbitrator exclusion or the inability to reach a decision/award. Wieger Wellinga, Managing partner, Omni Bridgeway spoke about third party financing in different European arbitrary jurisdictions, shedding light on some of the common practices, drawn from his 20 year experience in arbitration.
The second session was on arbitration. Victor Dumler, Dumler and Partners noted that arbitration is won by facts, and experts are there to help establish facts that are related to the dispute. Doug Hall, Head of Forensic Services, Smith Williamson talked about experts in arbitration, and the role of a third party appointed expert. He spoke about the CIArb protocol for the use of party-appointed expert witnesses in international arbitration and possible objectives of the instructing party. Dominic Pellew, Partner, Dentons spoke about cross examination and highlighted that this is the most popular method of getting evidence. He also talked about "expert's conference" - a new method of cross examination. Valery Knyazev, Partner, Haberman Ilett demonstrated the selection criteria of experts for arbitration, pointing out the importance of experience and the difficulties in writing a conclusion. Simon Chapman, Herbert Smith Freehills gave his opinion on experts, as an arbitrator. He talked about preferences, with regard to experts, and the importance of being concise when answering questions.
The third session focused on asset tracing. Alessandro Volcic, Managing Director, Head of Russia & CIS, Kroll talked about best practices in asset tracing, including analytical methods and scheme composition. David Alexander, Head of Fraud and Financial Crime, Smith & Williamson spoke on the use of technology in asset tracing, using several case studies. Mike LaCorte, Company Director, Conflict International talked about the work of detective-investigators who are dealing with assets searching. That includes establishment of contacts with local detectives and different ways of getting information about assets, their state and displacement.
Alexey Dudko, Partner, Hogan Lovells talked about standards of successful use of evidence in asset recovery and anti-fraud international litigation, using Mezhprombank & DIA vs Pugachev as case study.
The fourth session focused completely on asset freezing. Steven Philippsohn, Senior Partner, PCB Litigation spoke about injunctions by English courts. Stavros Pavlou, Senior & Managing Partner, Patrikios Pavlou & Associates, focused on interim Measures by Cyprus courts. James Menz, JD, Partner, Schellenberg Wittmer talked about Swiss arbitration. Jeremy Child, Partner, Harneys spoke on the interim measures by BVI courts and the importance of the British Virgin Islands as one of the biggest offshore territories.