Effectiveness of the escrow account system
Marina Tokmakova, Head of Investment and Real Estate Practice at Duvernoix Legal, shared the case details when shareholders managed to win in court against Petrostroy with the help of an escrow account system.
"Individuals made a payment under the apartment reservation agreement, and the company had to transfer this money to pay the price of the contract of participation in shared construction. The judicial board rejected the argument that the notification and the letter of guarantee could not be proper evidence confirming payment under the equity participation agreement in the absence of funds in the escrow account. The court of cassation sided with individuals," the expert explained.