Russian companies ripped off billions from Hewlett Packard and Oracle

Foreign vendors have been awarded large compensation for interrupted supplies of software and equipment.

Russian distributors and integrators who provide wholesale supplies of software and hardware to Russian customers have achieved recoveries from foreign manufacturers who have left the country in the amount of more than 4.7 billion rubles. on 43 claims. Such conclusions were made by specialists from the MEF Legal law firm after analyzing the statistics of the arbitration court file (CA) since February 2022.

The largest amount is almost 2 billion rubles. – on two claims for 1.4 billion and 550 million rubles. requires the Russian distributor of computer equipment OCS Distrubution (OSC Center LLC) with Hewlett Packard Enterprise LLC. This is a Russian subsidiary of the American manufacturer of servers and data storage systems Hewlett Packard Enterprise (HPE). At the end of July 2023, the court fully satisfied both claims, but in early September the Americans filed an appeal, they wrote earlier.

Integrator LLC Talmer demands 778 million rubles from the Russian legal entity of the American computer equipment manufacturer Dell (Dell LLC). The decision was also made not in favor of the foreign supplier, but on appeal the parties entered into a settlement agreement and the original decision was overturned.

Two large claims were filed by the integrator of software and hardware solutions, FORS Distribution LLC, in the amount of 431.7 million rubles. and the developer FORS Development Center LLC in the amount of 111.4 million rubles. to the structure of the American supplier of Oracle database management systems JSC Oracle Computer Equipment. In both cases, at the end of December 2022, the claims were partially satisfied.

“We do not plan to waive our claims and will continue to participate in the bankruptcy procedure of Oracle Corporation in Russia,” commented the general director of FORS – Development Center Evgeniy Efimenko on further steps.

Also, claims were filed against Oracle by the distributor Marvel CT, integrators Croc Incorporated, Jet Infosystems and Alfa Bank. Several dozen lawsuits with demands of up to 100 million rubles. was submitted to three large IT companies from the USA – computer manufacturer IBM (IBM Eastern Europe/Asia LLC), network equipment vendor Cisco (Cisco Solutions LLC) and office software supplier Microsoft (Microsoft Rus LLC).

Representatives of Marvel CT and Jet Infosystems declined to comment. A representative of Croc Incorporated said that the company is taking “all necessary and legally required measures aimed at collecting debt.” Alfa Bank did not respond to the request.

The range of claims made by the plaintiffs ranged from 175,000 to 1.4 billion rubles; on average, 115.3 million rubles were recovered from foreign companies, lawyers calculated. In almost all of the 43 cases considered, the court sided with the plaintiffs and satisfied the claims in full, i.e. the stated claims amounted to 4.7 billion rubles. close to recovered.

According to the rating of the largest IT companies in Russia from TAdviser, in 2021 the total revenue of foreign manufacturers that left the Russian market (Dell, HP Inc, SAP CIS, Cisco, IBM, HPE, Oracle, Microsoft, Intel) amounted to 231.3 billion rub. For the same companies in 2022, due to leaving Russia, although their income fell threefold to 72.6 billion rubles, they amounted to almost 3% of the country’s entire IT budget.

About 4 billion rubles.

amounted to the sum of already satisfied claims against departed foreign IT companies in Russian courts, according to information from the law firm MEF Legal. In total, Russian consumers of IT solutions filed 43 claims in the amount of 4.7 billion rubles.

In most cases, lawsuits were related to issues of failure to provide services provided for under existing contracts, or solutions that were prepaid but not delivered, it follows from the CAD. Therefore, after the suspension of the activities of foreign suppliers in Russia, clients began to en masse turn to manufacturers with claims for the return of prepayments for services that were not provided, explains Rimma Malinskaya, partner in the commercial disputes practice at MEF Legal. Consumers of IT solutions are interested in long-term software support, so contracts with integrators and distributors were concluded, as a rule, for a long period, she adds. Such contracts most often require full or partial prepayment, the expert clarifies.

These 43 cases do not take into account claims filed by Russian legal entities against the integrators and distributors themselves, who acted as intermediaries between foreign manufacturers and end consumers, according to the MEF Legal analytics. According to Malinskaya, now a second wave of claims is coming, when plaintiffs will be able to file claims for large sums – for example, for lost profits that have arisen since foreign companies refused to undertake obligations. In this case, the potential amount of disputes can be calculated from the integrators’ profits from the sale of services of departed manufacturers for a six-month period, the lawyer warns.

Until February 2022, cases of violations of obligations for the supply of computer equipment or support services were rare cases, notes Alexander Zhuravlev, managing partner of the EDB law firm. Therefore, the current number of lawsuits is a record in recent years, he emphasizes.

The trend to recover lost profits from foreigners does exist, confirms Forward Legal lawyer Lyudmila Lukyanova. “The change in the nature of claims is due to the fact that previously distributors assessed the risks associated with disruption of delivery. Now, after a while, more input has appeared in order to assess the economic effect of terminating contracts with such suppliers. Therefore, claims for the return of advances have been supplemented by claims for the recovery of damages and lost profits,” she says.

Recovery of lost profits looks like a fairly promising course of action, believes Efim Kazantsev, an expert at the educational platform Moscow Digital School. “The lost profit here is not so difficult to calculate – you can take the company’s profitability over the past few years as a basis and derive average values, or calculate the profitability for those contracts with Russian users that had to be terminated due to the unilateral refusal of foreign partners. The chances of actually receiving an award are not exactly zero, but will greatly depend on a number of factors, such as the jurisdiction in which the defendant is registered,” says Kazantsev.

However, claims for recovery of lost profits are traditionally one of the most difficult to prove in Russian judicial practice, warns Gleb Sitnikov, partner at the law firm Yurlov and Partners. Typically, the main challenge is to prove a causal link between the defendant’s actions and the specific amount of lost profits, i.e., “the income that the plaintiff would have received but for the defendant’s actions.” The practice of collecting lost profits existed before 2022, but did not have such wide distribution and resonance, summarized lawyer, partner of the Sotnikovs and Partners law firm Elena Sotnikova.