“Foreign Law is not a Panacea”. FBK Partner at the IIDF Group of Experts Meeting on the “Early Stage Investment Transactions”

Alexander Ermolenko, FBK Legal partner, took part in the panel discussion on the “Early stage investment transactions” carried out by the Internet Initiatives Development Fund (IIDF).

The conference is one of the preparatory events to the Russian Forum of Internet Entrepreneurs section to be conducted on May 13 with the participation of RF President.

The panel discussions was attended by the leading lawyers in corporate law, representatives of investment companies engaged in sowing and venture investing of internet projects, representatives of the state authorities.

One of the topics the participants dwelt on, in particular, was the application of Russian laws in the investment arrangements.

“It’s not a secret that now when implementing the investment projects the participants use more often than not the foreign jurisdiction and foreign legislation. There is a whole range of reasons for that, but in a nutshell – if there are no mechanisms to protect the interests of the parties in the domestic law the choice is made in favor of the foreign”, says Alexander Ermolenko. The FBK Legal partner believes that at the present stage of the investment business development the experts, law-makers and community representatives should focus on how to make Russian law more attractive for use.

“Our practice shows that in fact the foreign jurisdiction and arbitration are not at all an optimal way at least due to the growth of costs of litigation, complication of the court judgement execution procedure, the court practice is not always in favor of the “strangers”, believes Alexander Ermolenko. The mere use of foreign law does not give you any guarantees. That is why the national law should necessarily be developed”.

The Internet Initiatives Development Fund (IIDF) - a public organization aiming to promote the development of internet business in Russia – provides funding and expertise resources to the online start-ups at different stages of development. The IIDF established and maintains the start-up accelerator in Moscow and plans to establish similar sites in other cities of Russia. Among the IIDF priorities there are educational, legislative and infrastructural projects to make for the development of a full-fledged market of small and medium sized internet businesses in Russia.