Sergey Budylin Damages in Lieu of Injunction, or The Iranian Oil Case
Commentary to the Case Pell Frischmann Engineering Ltd v. Bow Valley Iran Ltd
 UKPC 45
Damages are usually calculated by representing in economic terms the aggrieved party’s loss
due to a breach of contract by the other party. But what if the breach is non-material, breach of a
confidentiality provision in particular? In that case the Privy Council laid down clear guidance on how
to assess damages: by reference to a «hypothetical negotiation» whereby reasonable parties would
agree to allow for breach of the relevant contractual provision entailing compensation. And the fact
that the parties would never have reached a deal in reality is irrelevant as it merely demonstrates that
both parties are not acting reasonably.
England, Jersey, confidentiality agreement, damages, injunction, international sanctions, Wrotham Park
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Anton Ilyin Compound Interest and Litigation Costs
In its ruling, the Supreme Court answered the questions of whether interest can accrue under article 395
of the Russian Federation Civil Code on the annual interest recovered earlier under the same article
(no, it cannot) and on the awarded costs (yes, it can) for a period between the pronouncement of the
court order and actual payment. The article examines the Supreme Court’s arguments. Based on the
annual interest ratio analysis under article 395 of the Civil Code, the indexation of court awards and
the legal nature of litigation costs, the author argues that the Supreme Court’s conclusion allowing
interest to be calculated de lege lata under article 395 on litigation costs, which are satisfied yet
unpaid or not paid in due time, is not correct. It can be supported, however, from the constitutional
perspective. The author shares the view that the article 395 interest accrued on the annual interest
that was recovered earlier by the court under the said article due to untimely execution should be
treated as compound interest.
compound interest, litigation costs, execution of court order, indexation
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Arina Vorozhevich Antitrust vs Patent Rights: Why the Interference of the Antimonopoly Service Will Affect Innovations
In November 2017, Russian Federal Antimonopoly Service (FAS) again came out with a legislative
initiative to extend antimonopoly regulation to the use of intellectual property. The author of this paper
proves that implementation of such initiative will lead to destructive consequences for innovation
market. The functions of exclusive (IP) rights must be taken into account when assessing rightholder’s
conduct. In the patent sphere these functions are referred to as inducing inventions, investments in their
commercialization and providing consumers with high-tech products. In some markets (for example,
pharmaceutical), the implementation of such functions is impossible without maintaining the exclusive
dominance of patent holders over their invention. In others (digital markets, telecommunications) it
requires the interchange of inventions among different entities through licensing agreements. Such
agreements may contain various restrictive conditions, tying arrangements. Antimonopoly regulation,
with its emphasis on prices and increasing number of competing entities, cannot be sufficiently
sensitive to such needs of innovation turnover. There is a risk that most of the licensing agreements
will be declared illegal by the Russian FAS.
The author defines civil law instruments (exhaustion, patent misuse, compulsory licensing) which help
suppress various unfair strategies of patent holders, without resorting to antitrust laws. Furthermore,
she proves that the FAS assertion that antimonopoly legislation is widely applied to the sphere of IP
rights in foreign jurisdictions is not correct.
exclusive right, antitrust, FAS Russia, competition, license agreements
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Victoria Korotkova Foreseeability of Contractual Damages
The article analyses foreseeability (the foreseeability rule) as a method of limiting contractual damages.
It gives a comparative overview of foreseeability rule in different jurisdictions (France, England,
Germany) and also considers CISG as an example of international regulation. It is demonstrated that
the main trend is the recognition of parties’ will as a key factor for determination of foreseeability.
In accordance with the will centered approach, the court, through contract interpretation, must find
direct or indirect acceptance by the debtor of the liability for extraordinary consequences resulting
from a breach of contract. If debtor’s will to expand its contractual liability is absent or impossible to
establish, the risk of extraordinary losses is born by the creditor. The article explores the reasons
for the foreseeability rule: idea of justice, law and economics arguments, will of the parties. The
author finds the first two reasons unconvincing and believes that the latter is not a justification for
foreseeability rule but an alternative to it. Author also analyses relation between foreseeability, fault
and causation as well as proposes criteria for distinguishing these concepts.
limitation of contractual damages, foreseeability, fault, causation
Ekaterina Fetisova Ambush Marketing as Exemplified by Sporting Events
The present article overviews the ambush marketing phenomenon as exemplified by sporting events.
The author studies various ways of protection against it alongside the correlation between ambush
marketing, unfair competition and violation of intellectual property rights. In conclusion, the author
gives practical recommendations for counteracting this phenomenon.
ambush marketing, intellectual property rights, unfair competition, false advertising
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Egor Kondratenko Review of Arbitrazh Cassation Courts Judgments Imposing Subsidiary Liability on Controlling Persons for Causing Bankruptcy of LLC
The subject-matter of this review are conclusions that were reached by arbitrazh courts of the
cassation instance in cases where the issue of bringing persons controlling the limited liability company
to subsidiary liability was at dispute. The review reflects the specifics of courts’ understanding of
the grounds sufficient to establish the fact of controlling persons’ guilt in company’s bankruptcy.
Court practice indicates that bringing controlling persons on the basis of the aforementioned ground
is quite a challenge for a claimant. One should assemble rather solid evidence in order to prove
the casual link between actions of controlling persons and negative consequences that led to the
company’s bankruptcy. It is important to make a reservation that the author did not aim to consider
cases concerning special presumptions of guilt which are set out in the Russian Federation Law on
bankruptcy, subsidiary liability, casual link
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