Lawyers wary despite TNK-BP deal

BP has resolved its dispute with Russian shareholders of its TNK-BP joint venture, signing a memorandum of understanding last week (4 September) that will result in embattled chief executive Bob Dudley stepping down before the end of the year.

Partners in Moscow have warned that the publicity, along with the ongoing tensions, could still have a negative impact on the country’s deal market.

The news comes as the International Bar Association (IBA) last week urged the Russian Government to ensure the protection of lawyers’ rights following raids on law firms by Russian police last month.

A host of international firms took roles on the TNK-BP dispute, with Linklaters and Egorov Puginsky Afanasiev & Partners acting for BP, and Herbert Smith advising Dudley and the joint venture’s management.

The four Russian oligarchs making up the Alfa-Access-Renova consortium owning the other half of the joint venture have turned to firms including Lovells and SJ Berwin.

UK lawyers based in Russia argue that although the resolution of the TNK-BP dispute is welcome, the publicity, combined with increasing political tensions between Russia and the West, could have already damaged perceptions of Russia as a place to do business.

CMS Cameron McKenna Moscow managing partner David Cranfield said: “There is a lingering perception that the Government was behind the dispute. This is damaging to business confidence. There are ongoing worries about country risk and if the message being sent out is that a corporate’s fortune is tied to the Kremlin, that will be of concern to investors.”

Another Moscow managing partner of a City firm added: “The damage is already done, but the Russian Government may have found this embarrassing and may not let this happen again. The raiding of law firms is a concern because it is the climate in which you operate. You do not know when the Government will interfere with your business.”

More international news, comment and analysis