Sergei Bakeshin has assessed for the Novyi Prospect the consequences of a dispute about the return of the advance payment under the defense contract

JSC Zvezda, the producer of engines for military ships in St Petersburg, is being sued for more than 200 million rubles, of which about 160 million rubles are being attempted to recover from JSC Zvezdochka, the Shiprepairing Center located in Arkhangelsk region. The companies are in a lawsuit because of an advance payment made by Zvezdochka to Zvezda to perform part of repair and modernization of a nuclear submarine. The final customer was the Russian Defense Ministry, which later decided to terminate the work. However, Zvezdochka and Zvezda have actually started execution of the contract, which has never been executed.

Sergei Bakeshin, Head of Dispute Resolution and Insolvency practice at Maxima Legal, explained to the Novy Prospect online publication that if the decision is made in favor of the Arkhangelsk company, Zvezda’s financial standing may be undermined.

At the same time, one of the creditors has filed an insolvency petition against JSC Zvezda. However, according to the market players, the government will not let the plant go bankrupt since it is the only Russian manufacturer of engines for small battle ships of project 22800 (Karakurt).

To read the full article (in Russian) please see the Novy Prospec online publishing  >>>