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LCF Law Group: Leading to a Triumph

One of the most high-profile cases of the past year (All-Ukrainian network of people living with HIV/AIDS against Yagodyn Customs) has given grounds to qualify LCF Law Group beyond their established reputation of highly-skilled lawyers. The accurately chosen tactics of client’s interests defense virtually saved the lives of thousands Ukrainians.

We talk with Anna Ogrenchuk and Artem Stoianov, founding partners of LCF Law Group, about this precedent, litigant’s advantages, experience of conducting court disputes with fiscal structures andspecificity of proceedings between creditors and debtors.

- Termination of the criminal case against the charity organization All-Ukrainian network of PLWH has established a precedent in Ukrainian judicial practice. It may be said that your company has already left its mark in history…

Anna Ogrenchuk: It is our mutual win. I will be honest with you – it is the result of thorough preparation and serious work. It really was a meaningful proceeding – both from in terms of professional experience but also the level of emotional stress. To remind you of what had happened - in July this year a cargo with medicine for 5 thousand Ukrainians with AIDS, for the total amount of 15.5 million UAH, was delayed on the customs. This batch was financed by The Global Fund to fight AIDS, Tuberculosis, and Malaria (our government has no means of purchasing this medicine). The State Customs Service had spread untruthful information that it had allegedly taken the wraps off criminal group and that “30 million of budget money was transferred for this medicine to unknown accounts”. The medicine was found contraband and might have been utilized. Customs legislation, moral norms and human values formed a rigid joint. As complex as the litigation process was, the ultimate result is the crucial point. Our adequately chosen strategy and tactics led to the timely termination of the case against All-Ukrainian network of PLWH and consequently the medicine was delivered on time to the patients. It is certainly a victory, but it is too early to draw the line.Currently we represent the interests of this client in the proceeding with The State Customs Service of Ukraine on rebuttal of untruthful information and on compensation of [nonmaterial / moral?] damage to the amount of more than 16 million UAH. This case is extremely important and resonant. If the untruthful statements of the Customs are not rebutted, the next delivery to Ukraine of the HIV/AIDS medicine for the amount of 3.5 million USD will be under threat. Moreover the negotiations on the provision by The Global Fund to fight AIDS, Tuberculosis, and Malaria of humanitarian aids for an overall amount of 300 million USD will be terminated. We are putting a great effort in supporting these charity organizations in giving people a chance of recovery, and as such always work with maximum efficiency given that time is of essence.

The main activity is in courts

- It is probably not a coincidence that the name of your company stands for Litigation Corporate Finance (LCF), so if I understand correctly you specialize in judicial practice, corporate and financial law, is this right?

Artem Stoianov: Litigation cases constitute70-80 % of our work. Long before the company was created we realized the lack of companies with juridical specialization in the market. And going further, in my opinion, judiciary practice is not even systematized in our state. There are strong individual litigants but universal law firms with a couple of court experts are not able to provide quality handling of 7-10 processes simultaneously. In this context our company is unique: we created a perfect team of professional litigants, who ensure high-quality intermediation of client’s interests in courts. It fundamentally differentiates us from the other law firms.

- In other words you are something like an emergency aid?

Artem Stoianov: Surely! Clients come to us, professional litigants, with delicate situations, problems and conflicts. And every new time it is a battle. We use all instruments in lawyer’s arsenal. If there is even a minor chance of winning, we will fight for it!

Anna Ogrenchuk: In addition our goal is not only to win an action, but to prevent a conflict. For this very reason alongside the judicial practice we provide professional services in the sphere of corporate and financial law. We want client’s business to prosper, and want to become long-term partners.

- So consulting has not been left behind?

Artem Stoianov: Of course. Litigation experience is a great advantage for us and our clients. We have faced in courts numerous legislation traps, quack methods, faulty contracts against which our clients are trying to insure themselves by asking for consultation. We are not limiting ourselves to the corporate and financial segment though, other advisory spheres in demand are antimonopoly legislation and tax consulting which are also included into our services.

- Why have you chosen the judicial practice as your main focus, given it is the most complex and time consuming area of legal advisory?

Anna Ogrenchuk: This is what we like do and can do best. Each of us joined the firm being an established and successful legal practitioner. Artem and I were hurled together by fate in court. It was a very unusual trial, where both of us won, having secured acquittals for our clients.

Artem Stoianov: Following this case we had common clients, mutual projects and the main thing –commonality in professional approach. When «the critical mass» of common projects reached its peak we took a decision to create a joint company. We have been successfully and dynamically developing during the last two years, but it is the judicial practice which is our strongest point.

– How much do the services by LCF Law Group cost?

Artem Stoianov: We almost never use the bill-per-hour approach. As a rule we agree a fixed sum plus royalty paid after the successful termination of a case. It is a sort of the golden mean. To the extent that «golden» refers to the work quality, and a «mean» – to its price (smiling). We sell not the process but the result.

– What are the constituents of your wins?

Anna Ogrenchuk: The judicial tactic is based on many compounds. On one hand it is the knowledge of the process, on the other hand –of the case materials, precise understanding of what you are talking about. The most crucial thing is thorough preparation, awareness of technicality of the case. For instance, when preparing a defense in court we try to predict opponents’ questions and arguments and to model attack and defense. We should think over the weakest and the strongest sides, to play in advance. Unfortunately, sometimes lawyers pay no regard for dispute details and limit themselves only to the study of normative base. But when the case materials are scrupulously considered and not a single document or circumstance has been overlooked – then a specific internal sense of confidence appears: both in client’s rightness and in victory.

The customs service and tax authority could and should be challenhged

– With what problems do the clients come to you most often?

Artem Stoianov: I would emphasize three most critical problem areas: disputes in tax and bank spheres and corporate conflicts between company stakeholders.

- Nowadays tax issues become much more relevant. Adoption of a new Tax Code and inadequate explanatory work of tax officials directed towards its norms put entrepreneurs in pie.

Anna Ogrenchuk: There cannot be such a thing as good tax by nature. J. Newman said that those who run away abroad from taxes make not less than those running from dictators. But you are right: businessmen feel rather uncomfortably in nontransparent legal environment. Our legislation too often interprets one norm in different manners and, unfortunately, legislators not always use a sound mind in their judgments. Usually only professionals are aware of it. People who are not acquainted with the principles of work of our legal framework, sometimes even do not realize that they are acting beyond its legal boundaries. And if a person does not know that he/she has a problem, then there is no reason to take the situation as a problem. Or on the contrary, there is a risk of underestimating the level of rights’ violation by fiscal authorities. A person, who is not deeply wrapped up in legal environment sometimes has a hard time to estimate future risks, especially if there is a problem that needs urgent action. A highly qualified lawyer in this situation is the best advisor.

- The tax office and the customs are very difficult opponents. Do you and the fiscal system often find yourselves on the different sides of the fence?

Anna Ogrenchuk: Unfortunately government leads a rather aggressive policy towards business, trying to mend the holes in budget at entrepreneurs’ cost. Our positive judicial practice herewith witnesses that rights could and should be asserted, at all levels of this system. In everyday battles with tax authorities and customs officials we gain experience which enables us to prepare documents for our clients that take into account not only legislative and tax peculiarities but also judicial practice. Ukrainian reality is that rules of the game change as you play. We take this into consideration. Our practical recommendations allow clients to sleep well.

Artem Stoyanov: The Tax office and security could and should be challenged. One more supportive example - we represented in court interests of SvitLand Ukraine (a big developer, which is a part of Fishman Group – one of the largest investment groups in Israel) vs tax inspection. As a result of the ruling in our favor, the client obtained the right for repayment of VAT amounting to over 4 million USD!

Anna Ogrenchuk: We also represented a big pharmaceutical company in a case connected with the customs. During the clearance in Kyiv Regional Customs the code of goods according to the classifier of goods was changed into the analogous one but requiring VAT to be accrued. We demanded to annul this decision. As the result a multimillion sum of tax exemption was granted to the client and the actions of Kyiv Regional Customs in this case were declared illegal.

- In other words, a journey of thousand miles begins with a single firm step?

Anna Ogrenchuk: Undoubtfully. In our case a great number of victories and a growing number of loyal long-term clients are the bases for our confidence. Creditors vs. debtors: who will be got round

– You touched on the conflicts in bank sphere. What are the current reasons for bank disputes?

Artem Stoianov: For the most part - the relations between creditors and debtors. Starting from 2008 we have monitored how judicial practice connected with credit activities has been changing and how the banks defend and creditors attack. Trying to avoid shouldering responsibility the debtors demonstrate extraordinary inventiveness when selecting the grounds for claims adjustment that partially leads to absurd judicial decisions. Our company has a successful experience of such proceedings and we managed to effectively advocate banks’ interests.

The cases of illegal actions of creditors towards debtors are non infrequent either. We even created a new term - “dishonest creditor”. I will cite an instance. Our client having taken in a bank credit on very expensive exploration equipment got into an awkward situation. The bank assigned its rights to a natural person, a citizen of Lithuania without prior notice to the debtor. The bank did not stop to accrue interests and insisted on credit repayment. Finally with our assistance the client won the case, in which several court institutions in different countries were involved. Moreover, a criminal case against negligent bank officers who committed the breach was recently initiated. Multimillion equipment was returned to the client.

Based on our successful experience, by foreseeing the problems that may arise, understanding the arguments that may be used by opponents, acting deliberately and professionally, having developed necessary proceeding strategy and tactics, resisting unfair actions of the opposite party - one may obtain a satisfactory judgment in the most complicated cases even facing the toughest opponents.

– According to the experts, your profession is one of the most stressful, as you always stand in the epicenter of conflict. Where does your strength lie? How do you refuel your energy?

Artem Stoianov: We are happy that we do our thing. As Alfred Montapert said – “The happiest and most contented people are those who each day perform to make the best of their abilities” but on top of this, we are also lucky enough to have beloved families and kids - source of force, energy and optimism. [ And if to add to well-known Winston Churchill’s words that «the happiest people on the Earth are those who get pleasure from their work» a beloved family – that will be a source of force, energy and optimism.] Besides, two of us are fond of sports – tennis and swimming. It helps to restore the strength.

– New Year holidays are coming. What would you like to wish yourselves and your company?

Anna Ogrenchuk: Prosperity, of course! Ourselves we wish to conquer new heights in the profession and to learn new practices, and wish new victories for our clients. As we, the lawyers, depend on the economy in general, surely, we wish prosperity to our country.

About company: LCF Law Group was founded by the partners Anna Ogrenchuk and Artem Stoyanov, who have been practicing since 2002.

Area of business: judicial practice, corporate and financial law, taxation, antimonopoly and insurance law, mergers and acquisitions.

LCF Law Group is in the TOP 50 of leading Ukrainian law firms; according to Kyiv Post Artem Stoyanov is one TOP 10 lawyers of Ukraine, Anna Ogrenchuk is recognized the best corporate lawyer on the annual contest, held by The Jurist Union of Ukraine;

Among the clients: Alfa Bank, Svitland Development Limited (part of Fishman Group), QBE Ukraine Ins.Co., Allianz Ukraine, Ins.Co., Kyivguma, Brovary plant of building constructions, UkrSibinvest, Vikoil, Nibulon.

During 2011 the LCF team participated in more than 150 lawsuits for a total of 400 million $ and accompanied M&A deals amounting to 500 million $.

Anna Ogrenchuk

Managing partner of LCF LAW GROUP, attorney

Education: Kyiv National Taras Shevchenko University, diploma of Master of Law with honours; Kyiv National University named after Vadym Getman, diploma of Master of international economy, in 2006 obtained the Certificate in Advocacy.

Career: since 2002 worked in the law firm Aries Ltd., where since 2003 she has been a senior partner. In 2007 she founded and headed a law company Legal Group Griffon Ltd., which in 2009 was joined by a law firm Center of Private Law.

Regalia : Anna Ogrenchuk is a member of:

· Is a Deputy Head of a Civil Council of State Registration Service of Ukraine;

Marital status: married

Artem Stoianov

Senior partner of LCF LAW GROUP, attorney

Education: Kyiv National Taras Shevchenko University, Institute of International Relations, diploma of specialist of international law, translator of the English language.

Experience: worked as lawyer in the Baibarza and Volkov LF and The Master and Partners LF. In 2005 he founded and headed a law company The Centre of Private Law. In 2009 a law firm The Centre of Private Law joined with the legal group Griffon and the legal group LCF was founded on their base. He has the Certificate in advocacy, 2007.

Regalia:

Marital status: married

Hobby: tennis