CEE Legal Matters

Category: Uncategorized

  • Varul Has New Managing Partner in Latvia

    Varul has announced that Latvian attorney Vita Liberte took over as head of the firm’s Latvia office on March 1, 2015. According to the firm, Liberte’s appointment as Managing Partner of Varul Latvia “is based on the rotation of management of Varul Baltics promoting continuous growth of the firm.”  

    Liberte began her career in the legal sector in 1999 as a lawyer with PriceWaterhouseCoopers in New York. After 2 years she moved to Deloitte Latvia, where she stayed for 5 years. In 2007 she launched her own law firm with a colleague before joining Varul in January 2012. She graduated from Latvia University in 1998, and obtained an LL.M. from the New York University School of Law in 1999.

    She is a member of the American Bar Association and a member of the board of the Belgian Chamber of Commerce and Industry in Latvia. 

  • Sayenko Kharenko Selected as Official Legal Counsel of Ukrainian Grain Association

    Sayenko Kharenko reports that it has been elected as the official legal counsel of the Ukrainian Grain Association. Ukraine is one of the largest exporters of grain in the world food market, and Sayenko Kharenko reports that, “according to the opinion of experts, [the country] is likely to retain its leading position in the 2015/2016 marketing year.” The Ukrainian Grain Association is the association of producers, processors, and exporters of grain, the members of which export about 90% of the country’s grain. Members include companies such as NIBULON, Gavillon, Glencore, Noble Resources, Cargill, Louis Dreyfus, CHS, and ADM.

    Cooperation between Sayenko Kharenko and the UGA is to be coordinated by Senior Associate Andrew Zablotskyi.

    “We are delighted that the strongest team on the legal market in international trade and agribusiness became our legal partner,” says Volodymyr Klymenko, the head of the Ukrainian Grain Association. “I am sure that at the time when the industry is experiencing its dynamic transformations, especially in the legislative field, legal support and advice of Sayenko Kharenko will contribute to the consolidation and development of the grain market in Ukraine.”

  • Lawin Represents Lithuania in Gazprom Withdrawal

    Gazprom has withdrawn from the investment arbitration it initiated three years ago against Lithuania regarding the country’s then-new Law on Natural Gas, which implemented the EU Third Energy Package. Lawin represented Lithuania in the dispute.

    The EU Third Energy Package was adopted to create an efficient common energy market in the European Union, because previous regulative measures had been deemed insufficient for creating conditions for effective competition in the gas market.

    The Lithuanian law on natural gas transposed the requirements of the EU Third Gas Directive into Lithuanian law. Lithuania chose the full ownership unbundling model, which was described by Gazprom as the most stringent. However, all three gas activity unbundling models available in the EU required the same ultimate result: elimination of any possibilities and incentives for the infrastructure companies to protect the related gas supply companies at the competitors’ expense. Thus, under any unbundling model a gas production or trading company would not have been able to interfere in the activity of a gas transmission company.

    Gazprom challenged Lithuania’s requirement that the gas transmission activity be separated from its distribution and supply as a violation of the company’s rights as an investor, under the bilateral investment protection treaty between Lithuania and Russia.

    According to a Lawin report, “Investors’ rights are protected against political risks by bilateral investment protection treaties, and the state may be subjected to liability for actions of any of its governmental bodies or institutions. Under such international treaties the state usually undertakes to provide a full protection of foreign investments, treat foreign investments in a fair and equitable manner, not to discriminate against investors, and not to nationalize foreign investments unless in accordance with the law in the public interest and by paying compensation.” 

    Lawin explained that foreign investors’ rights have been interpreted very broadly in international arbitrations, and accordingly there have been many cases where foreign investors were compensated for damage incurred by regulatory change. Gazprom invoked these precedents in its attempts to stop the implementation of the EU Third Energy Package stating that unbundling of the gas activities is equal to expropriation. Gazprom demanded that the implementation of the EU Third Energy Package in Lithuania be revoked, or that it be awarded monetary compensation equal to the market value of the shares of Lietuvos duos.

    Lithuania, in turn, argued that because the state has the sovereign right to issue laws for the public good without discrimination and in compliance with the requirements of due process; the revised regulation did not deprive Gazprom of ownership rights and the right to sell shares, which was subsequently successfully effected by Gazprom. According to Lawin, which represented Lithuania in the matter, “it became obvious after the sale of the shares that the rights of Gazprom had never been infringed, [whereas its] claim was based only on the hypothetical risk.”

    Lawin Advocate Inga Martinkute, the head of the firm’s investment protection and disputes team, described Gazprom’s withdrawal from the proceedings as “undoubtedly beneficial to Lithuania.”

    Image source: Merkushev Vasiliy / Shutterstock.com
  • Law on Payment Services in Serbia

    Law on Payment Services in Serbia

    Legal framework for functioning of the payment system in Republic of Serbia has recently gone through a change by adopting Law on Payment Services (’’Official Gazette of RS’’, no.139/2014) which entered into force on 26 December 2014 and is due to become applicable on 1 October 2015 (hereinafter referred to as: the Law).

    This extensive legislative text with 232 articles, implemented EU acquis in the legal system of Republic of Serbia i.e. several directives regarding to payment services.

    The main reason for adoption of the Law is reflected in the fact that legal framework for providing payment services established by the Law on Payment Transactions presented no more an adequate basis for development of the payment services market. We especially refer that previous legal framework, among other things, put several limitations and prohibitions regarding institutions which could provide payment services and that payment services such as issuing, acquiring and paying by payment cards, payments made through telecommunication, IT and other similar operators, were not regulated by previous law in particular. 

    To all those who have followed developments on the commencement of PayPal services in Republic of Serbia, as well as confusing legal situation in which activity of the PayPal was performed, please note that along with adoption of the Law, the Law on Amendments and Supplements to the Law on Foreign Exchange Operations (’’Official Gazette of RS’’, no. 62/2006, 31/2011, 119/2012, 139/2014) regarding foreign institutions of e-money and payment institutions was also adopted.

    Significant novelties

    From major novelties provided by the Law for this occasion we highlight only few, as follows:

    1. New providers of payment services

    Besides entities from the banking sector and public authorities (commercial banks, the National Bank of Serbia (hereinafter referred to as: NBS), the Treasury and other public authorities in Republic of Serbia, a public postal operator) payment services may be provided by entities from the so-called non-traditional banking sector such as:

    a. Payment institutions

    The Law predicts performance of certain payment services by payment institutions as new institutes in the system of payment transactions in Republic of Serbia.

    Payment institutions, among other things, may execute money remittance services (Article 4, paragraph 1, item 6 of the Law), execute a payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, digital or IT network operator (Article 4, paragraph 1, item 7 of the Law), execution of other payment services including services enabling cash to be placed on a payment account, services enabling cash withdrawals from a payment account, maintaining the account, fund transfer, transfer where funds are covered by a credit, issuing and acquiring of payment cards (Article 4, paragraph 1, items 1-5 of the Law).

    Although a payment institution shall not perform deposit-taking activities or issue electronic money, it may grant a loan to the payment service user in connection with the provision of payment services, in accordance with the Article 95 of the Law. 

    Performance of payment services by payment institutions is conditioned by license issued by NBS as well as the fulfillment of personal-technical-technological conditions predicted by the Law and condition regarding minimum share capital, which amounts from EUR 20.000,00 to EUR 125.000,00 depending on the type of payment services that payment institution engages in.

    b. Electronic money institution

    Electronic money can be defined as digital equivalent to the cash, or electronically stored monetary value which is issued on receipt of funds (pre paid), and which is accepted as means of payment by third parties without necessary use of the bank account.

    Electronic money can be issued by the banks, a public postal operator, the NBS, the Treasury or other public authorities in Republic of Serbia as well as an electronic money institution.

    The Law allows the establishment of domestic electronic money institutions and making payments by electronic money through these institutions, what was not previously regulated by the relevant law nor were there other preconditions for their business. 

    Issuance of electronic money by electronic money institutions as well as providing of all payment services determined by the Law, is conditioned by license issued by NBS as well as the fulfillment of personal-technical-technological conditions predicted by the Law and condition regarding minimum share capital, which amounts EUR 350.000,00.

    Besides service of providing electronic money, electronic money institution provides payment services under Article 4 of the Law, granting credit relating to payment services, other operational and ancillary activities directly related to the issuance of electronic money or to the providing of payment services.

    Please note that for foreign electronic money institution, the Law on Foreign Exchange Operations is also applicable.

    2. Modernization and development of payment transaction system by implementation of new payment services 

    Of new institutes within the payment services, for this occasion we highlight possibility of opening a joint payment account, which means payment account held by the payment service provider in the name of two or more payment service users, in accordance with the framework contract on opening, maintaining and closing the joint account.

    Additionally, a direct debit that so far represented security instrument for future outstanding due amounts, now, in accordance with the Law means a payment service where a payee, based on the payer’s consent, initiates a payment transaction to debit the payer’s payment account. The payer may give such consent to the payee, its payment service provider or payee’s payment service provider. It leaves open the question of compliance with the provisions of the Law on Contracts and Torts. 

    Instead of conclusion – great responsibilities lie ahead

    As already said in the introduction to this line, the Law is due to become applicable on 1 October 2015.

    In front of the banks providing payment transactions in Republic of Serbia the Law sets ambitious deadlines. Specifically, the Article 221 of the Law predicts an obligation for the banks to harmonize their operations and internal regulations with provisions of the Law by its application date. Also, the banks shall, by no later than one month before the application date of the Law, that means on 1 October 2015, submit the proposal of the framework contract to be applied from the application date of this Law – to payment service users with which they concluded a contract on account opening and maintenance, contract on the issue and use of the payment card or other contract on payment services with permanent execution. Alternatively, what we assume that the majority of banks which provide payment transactions will do, banks may harmonize the contracts with provisions of the Law also by harmonizing general terms of business applied to these contracts. As in the case of the proposal of the framework contract, banks shall, by no later than a month before the application date of this Law, that means on 1 October 2015, inform all payment service users with which they have concluded the contracts that they harmonized general terms of business with provisions of the Law and shall make these terms available to such users.

    By Aleksa Andelkovic, Senior Associate, and Milos Curovic, Partner, ODI Law Firm

  • New Head of Legal at X-Media Digital

    Roland Novozhilov has become the new Head of Legal at X-Media Digital in Moscow.

    X-Media Digital is an online content distributor, active since 2006. According to the company’s website, its managers have “gained unique expertise and offer … an unprecedented amount of opportunities for monetization of video content on the internet. We have our own online cinema project, a library of exclusive VoD – rights, an antipiracy WebSheriff service and the status of No 1 YouTube partner (with over 40 million monthly video views) in Russia that altogether allows us to offer complete solutions for web sites, right holders and advertisers.”

    Novozhilov began his legal career in 2006 in the IP and TMT practice of Linklaters, in Moscow, where he spent two and a half years. In 2009 he left to spend 9 months at the Pepeliaev Group, before leaving for Hogan Lovells. In July 2012 he moved in-house, spending 16 months as the Legal Contract Manager at the Walt Disney Company, before, in March 2014, becoming the Head of Intellectual Property & Administrative Affairs Department at NTV-Plus, which he then left in September 2014.

    He obtained his degree from Lomonosov Moscow State University in 2007.

  • Moral Takes Partner From GSI

    The Moral law firm in Istanbul has announced that litigator Efe Kinikoglu has joined the firm from the GSI Law Firm.

    Kinikoglu’s experience covers the litigation and advisory sectors, and involved telecoms, real estate and real estate investment, construction, textiles, tourism, sports and entertainment, food and beverages, automotive, retail, manufacturing, and technology. In addition to his litigation experience, Moral reports, “he has represented and advised numerous international clients in connection with their day-to-day business activities and legal matters.”

    Kinikoglu’s first position was with the Birsel law firm, which he joined in 2005 and where he spent four years. He then moved in-house, for for a year at Avea, then for another year at Ozak Global Holding. In January 2012 he joined the well-known Cerrahoglu Law Firm, and after almost three years there he joined GSI in November, 2014. He is a 2004 graduate of the Faculty of Law at Bilgi University.

  • Karanovic & Nikolic Advises on Sale of Cacanska Banka to Turkish HalkBank

    Karanovic & Nikolic has advised the Deposit Insurance Agency, which represented the Republic of Serbia, the European Bank for Reconstruction and Development, and the International Finance Corporation on their joint sale of shares in Serbian Cacanska Banka.

    This was the first joint sale of this type in Serbia, which the firm claims “may set a precedent for the privatization model for the upcoming sale of Komercijalna banka, one of the largest banks in Serbia [and which has] a sell-side structure similar to that of Cacanska Banka.”

    Cacanska Banka has a 1.1 percent market share and assets of EUR 263 million. The bank has a network of 14 branches and 9 sub-branches throughout western and central Serbia. Halkbank purchased 28.49 percent of shares from the Government of Serbia, 24.9 percent of share from the European Bank for Reconstruction and Development, 19.9 percent from the International Financial Corporation, and the remaining share from bankrupt Beogradska Banka.

    Karanovic & Nikolic Banking and Finance Partner Darko Jovanovic led the firm’s team on the matter.

  • bpv Jadi Nemeth Takes Horanyi from Baker

    Hungarian Competition lawyer Marton Horanyi has left Baker & McKenzie to lead the Competition & Antitrust Practice of bpv Jadi Nemeth.

    Marton, who joins as a Partner, has 10 years of experience in competition law. He specializes in Hungarian and EU competition law and has significant experience in representing major Hungarian and multi-national companies in cartel, abuse of dominance and merger cases before the Hungarian Competition Office, the European Commission and the Hungarian and EU Courts. He has special expertise in particular in the pharmaceutical, retail, energy, IT/telecom and automotive industries.

    Prior to joining bpv Jadi Nemeth, he worked at the Budapest and Dusseldorf offices of Baker & McKenzie, and before that at the Legal Service of the European Commission in Brussels. He studied law in Budapest, Strasbourg, Saarbrucken, and at King’s College, London.  

    Horanyi is, not surprisingly, enthusiastic about his new position, and said “I am pleased to join bpv Jadi Nemeth’s enthusiastic team and further build the Competition & Antitrust Practice of the firm.” He continued: “I am also excited to be part of bpv Legal’s Central and Eastern European expert team and very much look forward to working with our clients to provide them with the highest quality business oriented advice.“   

    Managing Partner Dr Andrea Jadi Nemeth echoes Horany’s pleasure: “Our firm is committed to continuously providing premium legal services in competition law related matters, and that is why we are extremely delighted to have Marton on board. I am confident that his outstanding expertise, precision, and highly client-oriented approach will further increase the recognition and standards of bpv Jadi Nemeth’s Competition Practice.”

    Horanyi’s addition follows the departure of Balint Bassola from the firm to join the Jalsovszky Law Firm. 

  • Peterka & Partners Appoints New Directors for Prague and Bratislava

    Peterka & Partners has announced that Partner Premysl Marek — until now the Director of the firm’s Bratislava office — has agreed to take over as Director of the firm’s Prague office, where he replaces outgoing Director and Partner Zdenek Beranek, who steps back to focus on his practice and “development of the strategic clients.” Premysl will lead the office together with local deputies — Partners Adela Krbcova and Ondrej Majer.

    Premysl will be replaced as Director in Bratislava by Partners Andrea Butasova and Jan Makara, working closely with newly-appointed Managing Associate, Elena Chorvatova, as their deputy.

    Marek  launched the first Peterka & Partners foreign office in Slovakia in 2001 and served as its Director since (stepping aside briefly from 2004 to 2007). 

    Adela Krbcova has worked with Peterka & Partners since 2001, and she has been involved in the management of the Prague office since 2013. She focuses predominantly on corporate, M&A, and labor law matters.

    According to the firm, Ondrej Majer joined PP in 2001 and co-managed the office of the law firm in Bratislava for several years. He has been involved in the management of the Prague office since 2013.

    According to Peterka & Partners, Jan Makara specializes “in the areas of mergers and acquisitions, real estate, development and construction, corporate, labour, and antitrust. Before joining Peterka & Partners in 2004, he worked at the Slovak Antimonopoly Office. He has been involved in the management of the Peterka & Partners office in Bratislava since 2009.”

    The firm says of Andrea Butasova that she focuses “on customer-supplier relationships and related disputes. She has been cooperating with Peterka & Partners since 2003. Between 2005 and 2006 she worked as lawyer for the European Court of Justice in Luxembourg. She has been involved in the local management since 2015.”

    Elena Chorvatova has been with the firm since 2004. According to Peterka & Peterka, “between 2010 and 2011, she worked as a lawyer at the European Commission Directorate-General for Justice in Brussels. Focusing mainly on employment matters, including foreign aspects of them and deals with collective bargaining agreements she has also a deep experience in corporate and M&A.”

  • Chadbourne Has New Managing Partner in Moscow

    Chadbourne & Parke has announced that Andrei Baev — formerly a Partner with Berwin Leighton Paisner — has joined the firm as a Partner in the Corporate Department, resident in the London and Moscow offices. Baev will also serve as the Managing Partner of Chadbourne’s Moscow office.

    Baev received a diploma jurist from Sverdlovsk Law Institute, an LLM from the UCLA School of Law, and a JSM and JSD from the Stanford University School of Law. He started his career with three years at Mayer Brown in Los Angeles, before joining Sullivan & Cromwell in New York in June, 1999. After two years there he moved to Allen & Overy in New York, Moscow, and London, where he spent the next 10 and a half years. In December 2011 he joined BLP in London, where he stayed until joining Chadbourne in March of this year. 

    Baev specializes in international project finance transactions and international joint ventures. He advises on the development and financing of oil and gas upstream, midstream and downstream projects, independent power projects, nuclear power projects, mining, telecommunication, and infrastructure projects, with a focus on emerging markets, particularly those in Russia and Eastern Europe. According to Chadbourne, he has been involved in most of the high profile energy, oil and gas, and infrastructure projects in Russia, and he has recently led teams of lawyers on several large projects involving Russian state-owned energy companies. Transactions he has been involved in include: the South Stream Gas Pipeline, Trans-Balkan Oil Pipeline, BTC Pipeline, TAP Pipeline, Kovykta Pipeline, OCP Pipeline, concession of the gas transmission system in Kazakhstan, Akkuyu nuclear power plant, Belene NPP, Shtockman LNG, PNG LNG, Shakh Deniz and South Caucasus gas pipeline, Taneco refinery, South Yoloten, Baku IPP, Tumen IPP, Bozshakol mine, Antamina copper mine, Kumtor gold mine, Julietta gold mine, Nadex PPP, Pulkovo airport, Samara airport, six airports in Dominican Republic, Yanino waste PPP, Moscow-St. Petersburg road PPP, Ust-Lug Sea Port, Azeri PSAs, South Tambey, Maly-Yamal, Tyco Submarine cable system, Americas Region Caribbean Ring System, a coal gassification plant in North Dakota and various M&As, joint ventures and strategic alliances in Europe and Russia. 

    Baev is enthusiastic about the move. “I am very excited to join Chadbourne, which has a market-leading reputation in the energy and infrastructure sectors and in emerging markets,” he said. “Chadbourne’s London and Moscow offices have strong and experienced teams capable of serving clients throughout the EMEA region, and I look forward to working with my colleagues here and around the world to grow the practice.”

    His new colleagues seem pleased as well. Andy Giaccia, Chadbourne’s Managing Partner, said: “We have grown strategically by focusing on our firm’s strengths in the energy sector and in emerging markets, and we are committed to the Russian market, notwithstanding some of the recent economic challenges, and continue to see great opportunities there. We are pleased to add Andrei to our firm, where he will not only contribute significant corporate experience and expertise in the energy sector, but also play an important role in strengthening the connection between our London and Moscow offices.” 

    “Andrei is a talented business developer who has grown strong relationships with senior management at some of the largest Russian companies, and his work and experience maps well with our geographic footprint as well as our practice strengths in energy and international projects,” said Ayse Yuksel, Chadbourne’s EMEA Liaison Partner. “Not only will Andrei help grow our Russian practice, but he will also drive growth across the entire EMEA region.”