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Winning a Dispute before the FAS over a Claim to Include Our Client into the Register of Mala Fide Suppliers

Task

Preventing a state customer from causing our client to be included into the Register of Mala Fide Suppliers for a minor violation when delivering equipment

Client
Metal-working equipment manufacturer and supplie
Industry
Machine Building

Background

Our client supplied coil-winding machines to a defence-sector enterprise under Federal Law No. 44-FZ. The manufacturer made insignificant changes in the make name of the equipment while keeping all its technical characteristics intact.

During the adjustment and alignment works, the state customer discovered that the equipment differed from the contract specifications, returned it to the supplier and filed a complaint with the Russian Federal Antimonopoly Service asking that the supplier be included into the Register of Male Fide Suppliers.

Under Russian laws, a deviation from contractual specifications does constitute a formal but valid reason for prohibiting the deviating company from working with state customers.

Including our client into the Register of Mala Fide Suppliers would jeopardise the operation of its business focusing on supplying defence-sector enterprises.

Outcome

Less than three days before the decisive meeting at the FAS, RussianLegal managed to collect the necessary documents and to prepare the legal arguments showing that the proposed penalty for the breach of the contract would be excessive.

The FAS made a decision finding the state customer’s complaint unsound.