A case involving royalties being included in the customs value

The lawyers of the practice represented in court one of the largest wine making companies in Russia in connection with royalties paid by the company for the use of trademarks being included in the customs value of imported natural corks used for capping wine and souvenir products. With the involvement of another consultant who had drawn an incorrect conclusion that the criterion of relevance had been met, the company lost in the first instance court, but won the court of appeal and court of cassation. Our team joined the case on a pro bono basis at the stage of the customs office’s complaint being transferred to the Russian Supreme Court’s Judicial Board for Economic Disputes, which in most situations results in the cancellation of judgments handed down at lower levels in favour of the party that has filed an appeal with the Supreme Court.

The lawyers of Pepeliaev Group convinced the client and its external consultants that the legal position they had developed was insufficiently strong and would most likely result in the claims of the company being rejected. The client agreed to file the response that our specialists had prepared and instructed Alexander Kosov to represent its interests in court.

As a result, the Russian Supreme Court’s Judicial Board for Economic Disputes cancelled not only the judgments issued in favour of the company, but also the judgment issued in favour of the customs authority and referred the case for a new trial. Taking account of the legal position of the Russian Supreme Court’s Judicial Board for Economic Disputes, during the review of the case, the courts will most likely reduce the amount of additional assessments to a minimum. In fact, taking account of the interest charged for customs payments collected in excess, which is payable in favour of the company, this will allow the company to have reimbursed all the expenses it has incurred.