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15.2.2020

Business support: gas pipeline construction

Project manager:

Managing partner
Corporate practice, Litigation, Investment projects
February 15, 2020

Business support: gas pipeline construction

Case description

We were approached by an international construction corporation with a request to provide legal and accounting support during the implementation of a major gas pipeline project in the northern region.

BBNP specialists approved a set of agreements for the supply of equipment and materials to the construction site, the main construction contract, the agreement for the use of roads and infrastructure, etc., provided accounting and personnel support, as well as legal support in obtaining the necessary permits, resolving migration issues and organizing the workflow, and advised on current issues.

In the process of approving the project and its implementation, problems were identified due to the fact that the schemes of organizing work and mutual settlements familiar to the Russian construction sector are not applicable in international practice, and foreign methods cannot be directly used when working with a Russian state customer due to a number of legislative restrictions.

In order to overcome the difficulties of integrating foreign systems and work management mechanisms (such as lump sum, mutual settlements and value formation, prepayment and advance payment mechanisms, etc.) with the Russian system of project accounting for work and payment, BBNP lawyers needed to conduct lengthy and complex negotiations with the customer. Issues of periodic reporting acceptable to both parties, limiting the liability of the contractor and its employees, and the justification and accounting for advance payments and advances were considered. BBNP specialists regularly held meetings and negotiations with local authorities and customer representatives at the construction site to form a project implementation plan and minimize possible risks. The main drafts of agreements with subcontractors and service providers, rental agreements for premises for employees were developed and approved with the head office, the issues of organizing a shift settlement were worked out, and local acts were prepared and adopted to organize work on a rotational basis.

Fluency in English allowed BBNP lawyers to successfully conduct the negotiation process. This is extremely important because most of the contractor's representatives did not speak Russian, just as most of the customer's technical specialists, accountants and engineers were not ready to negotiate in English. The accuracy of the translation and explanation of technical, legal and accounting terms to the client is one of the key factors that determine the quality of decisions made during negotiations and the success of international projects in general.

Result

During lengthy and difficult negotiations, BBNP lawyers were able to develop and agree on a system of cooperation with a foreign contractor that is new to Russian practice, a set of documents necessary for the implementation of the draft documents, a legal component when working on a rotational basis, as well as conduct a number of consultations on migration, tax, labor and other areas of legislation.

Information

The main activity of the BBNP team is supporting foreign businesses in Russia. The firm's specialists have been successfully working with international businesses and large, long-term projects for a long time. Construction projects related to government customers or companies with state participation require particularly serious support at all stages. At the stage of concluding a tender agreement, many stringent requirements must be met, and in the process of implementing the project, many questions arise about labor and migration legislation. The success of the entire project depends on the coordinated work of lawyers, managers, accountants and HR specialists.

Project team

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