"Piterlend" lost the fight with Smolny. Comments Mikhail Ilyin on Business FM

12 March 2013
The fight is about strengthening of the Gulf of Finland coastline near the Park of the 300th anniversary of St. Petersburg, where the "Strömberg" develops a multifunctional shopping and leisure centre "Piterlend". The company agreed to become an investor of coastal fortification constructions, and the Administration of St. Petersburg, in its turn, promised to compensate the costs incurred. President of the company Alexander Kozhin concerns the decision of the city officials as a political one, and promises to continue the fight in court. Mr. Kozhin said that the company fails in the suits because "there was a command given" on non-returning of the budget funds. "In fact, the customer is the city, the executor is the contractor, and we have nothing to do with them. We paid money for the whole thing, which, unfortunately, we can not return now", said the head of the company. Mr. Kozhin also noted that the his company has all the necessary supporting documents - letters and protocols. Another issue is that the government promised to return the money without court proceedings, and the company was waiting in the hope that this promise will be fulfilled, said the businessman. According to him, Valentina Matvienko, Governor of St. Petersburg being, advised to go to the court, and this was finally done in spite of the lost time.

Expert on corporate conflicts, attorney at law of the “S&K Vertical" Mikhail Iliin underlines that the procedure of compensation of costs is to be stated in advance in the correspondent agreement, which the parties must conclude before the start of the work. Iliin said that this situation is typical for Russia because of the close connection between the power and the construction business. Often, due to the lack of time the builders start working without any agreement, hoping to draft the necessary documents later. In case they fail, the companies are turning to the courts for the recovery of cost of the additional work performed.

Let us remind that the defendants in the said case were the Committee on the improvement which has been transformed into the Committee on the development of transport infrastructure, and the KUGI. Unfortunately, the press services of both the two committees did not comment this issue. The representatives of the"Strömberg," however, believe that they still have a chance, as the Higher Arbitrazh Court refused to hear the case because of an error in the paperwork. The company plans to correct the deficiencies and re-apply to the court.

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