FBK Legal’s Lawyers Defend Oil Company Against Unjustified Claims from Department for Natural Resources

Over the past four years, the Department for Natural Resources, Forestry, and Oil and Gas Regulation of the Yamalo-Nenets Autonomous District has filed multiple claims against an oil company. The subject matter of the dispute is contracts for lease of forest land on which oil wells are located.

Because of a tough economic environment, the company sometimes delays its lease payments. But the land is being used, and its subsoil use license is valid until 2025. However, the department claims that 11 lease contracts should be terminated and 184 plots of forest land should be returned with soil remediation. That situation practically paralyses our client’s operations, so the dispute is extremely important for the company.

Head of Practice Elizaveta Kapustina and Lawyer Anna Zelenskaya won in the dispute with the Department for Natural Resources and proved that a valid subsoil use licence permitted the company to use the land even in case of contract termination. Thanks to the lawyers’ efforts, the court of first instance dismissed a claim to terminate three lease contracts and reduced an astreinte by 80% (it had been supposed to exceed RUB 27 million a month).

FBK Legal’s lawyers did not stop on that. The ninth commercial court of appeal cancelled the decision to return the land plots and impose the astreinte.

The decision was cancelled based on FBK Legal’s argument that the existence of a valid licence issued to the defendant to use subsoil resources precluded vacation of the land as until the licence was revoked its holder was entitled to use the land to the extent necessary to develop the field.