14 March 2023
EPAM Lawyers Successfully Defended AB InBev Efes in a 730 Million Roubles Dispute, Significant for the Entire FMCG Market

On 14 March 2023, the Commercial cassation court of the Moscow Region upheld the previous decisions to dismiss the claims of food distributor Palmira Volga, in a case concerning recovery of more than RUB 730 million in "under-received discounts" and "incentive payments" provided by the distributor to retail outlets from one of Russia's leading brewing companies, AB InBev Efes JSC.

The case is of fundamental importance for the entire Russian FMCG market and further development of relations between manufacturers and distributors, as EPAM team managed to prevent unfair use of the well-established pattern of interaction between counterparties.

In 2021 the distributor filed a lawsuit against the manufacturer for recovery of debts under a marketing services agreement, claiming that it had not received a 'discount' on the sales of beer products, which, in the distributor's view, the manufacturer was obligated to provide.

The court of first instance and the court of appeal found the claims meritless and dismissed the lawsuit. However, the distributor disagreed with the rulings and filed a cassation appeal.

During the proceedings in the Commercial court of Appeal, the Firm's attorneys succeeded in dismissing Palmira Volga's complaint and in upholding the rulings, despite opponent’s numerous attempts to disrupt the proceedings and send the case for retrial on formal grounds.

Vera Rikhterman, EPAM Partner leading the case, stated: "The judgment in the AB Inbev Efes case is significant for all business areas operating under the distribution model as it protects rights of manufacturers and prevents distributors from making "super profits" by selling products to end consumers at a reduced price and refunding the "discounts" at the expense of the manufacturer. In addition to the landmark economic impact on the market, the court rulings support the crucial approach established in disputes involving major companies: the distributor has no "right to claim" a discount, since it is granted at the manufacturer's will, as well as on the legal allocation of risks between counterparties in similar contracts".

The team working on the project was led by Partner Vera Rikhterman and included lawyers from EPAM's Litigation Practice: Senior Associates Alexey Artemenko and Alexandra Mednikova, Associates Dmitry Konovalov, Larisa Garmashova and Oleg Kurin

The project was recognized as one of the most significant court cases of 2022 according to Kommersant Publishing House in the "commercial disputes" category.