Sergei Bakeshin has evaluated for Novy Prospect the issues of contesting tenders for the privatisation of land

Sergei Bakeshin - Counsel

The Ministry of Economic Development has amended Resolution number 860, which regulates the procedure for conducting privatisation sales through a public offer. The new law allows participants to bid in an open auction. According to the Head of the Dispute Resolution and Insolvency practice at Maxima Legal, Sergei Bakeshin, the new law “can be interpreted in two ways: does it relate to a participant who has confirmed the price, or is it about a participant who confirmed the price previously set by the participant mentioned in the previous paragraph”.

It should be noted that the previous rules of procedure led to the contesting of results. The well-known St Petersburg entrepreneur, the owner of the First Furniture Factory, Alexander Shestakov, in court is trying to invalidate the results of an auction for the privatisation of a property on Kamenny Island. According to the businessman, when a single application was received during the bidding to lower the site, the time for submitting proposals from other potential bidders should have been extended. The court sided with Alexander Shestakov only in the issue of applying interim measures, namely until a final decision in the dispute is made, against a contract of sale and register the transfer of ownership of property being made. The dispute has not yet been considered at appeal, or even in the first instance, said Sergei Bakeshin.

“The defendant’s legal position seems more convincing to me, since the changes made to Resolution number 860 are not retroactive and should not affect the resolution of the question of the legitimacy of tenders held under the previous law”, commented Sergei. “Otherwise, we may expect a raft of disputes about the results of previous tenders held long ago.”

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