German businessman has won another legal victory over Russia

German businessman, Franz Sedelmayer, has won another legal victory over Russia.  He is currently striving for the sequestration of Russian property abroad due to the expense of lost investments in St. Petersburg.

The First Instance Court of the French town of Draguignan had refused to recognize and implement the decision of the St. Petersburg court with regard to the extraction of taxes and fines from Sedelmayer totaling an amount of 65.6 million dollars.  This was reported by the Kommersant newspaper on the 9th of February with reference to Sedelmayer himself, as well as to a copy of the decision of the French court.

On the 26th of June 2006, the Petrograd Court of St. Petersburg ordered Sedelmayer to compensate the Russian Federation for material damages which had been caused as a result of non-payment of taxes to the budget in the amount of 65.6 million dollars.  Of this amount, the tax arrears only add up to 3 million US dollars.  The rest of the amount consists of fines and penalties.

The Bavarian businessman objected to the execution of this judgement.  He referred to it as an attempt to recover from him an amount that was disproportionate to the inflicted damage.  In addition, he also stated that he had been notified about the meeting at the St. Petersburg court only a week before it occurred.  This deprived him of an opportunity to obtain a visa and to attend the hearing.

The Court of the French town of Draguignan agreed with Sedelmayer.  The main reason for this agreement was that fact that Sedelmayer, by the findings of the court, was actually deprived of the right to appeal.  The decision of the St. Petersburg court stated that the verdict entered into legal force on the 27th of June 2006, while in the resolution pronounced a day earlier, there was an indication as to the right of a defendant to appeal against the verdict within 10 days.  On this basis, the French court concluded that the actions of the Russian judicial authorities contradicted international law.

Sedelmayer had been trying for many years to achieve the sequestration of Russian property abroad.  In 1998, he won a case against Russia in the Stockholm International Commercial Arbitration Court.  The court then ruled that he receive compensation in the amount of more than 2 million euros for losses incurred in 1990 while trying to organize a security business in St. Petersburg.  In addition to this, he obtained Russian rental income from the former Soviet Trade Mission in Cologne, and from the sale of the residential home of the Trade Mission of the Russian Federation in Stockholm.

In his own words, he has already successfully sued Russia for approximately five million euros and the only remaining amount he feels that is owing to him is one million euros for court expenses.

  Russia, lawsuits