Compensation for Losses: Features of National Indemnity

The doctrine of loss compensation under Russian law celebrated its tenth anniversary last year (as did the doctrine of representations and warranties, which we recently wrote and spoke about).

Over this period, Article 406.1 of the Civil Code of the Russian Federation has been shaped by judicial precedent, which has defined the boundaries of what is permissible for market participants. At the same time, businesspeople and lawyers have been developing approaches to the practical application of loss compensation, particularly in the context of M&A transactions.

The KKMP team offers an overview of the past 10 years of the institution of loss compensation under Russian law and invites anyone interested in this topic to participate in the webinar. We will examine the most interesting (and sometimes controversial) positions from judicial practice, as well as the market standards for using loss indemnification that have emerged, with a focus on pressing issues. Among other things, we will discuss:

• In what circumstances is indemnity an appropriate method for allocating risk between the parties, and in which cases is it better to consider other mechanisms?


• The relationship between indemnity and representations and warranties, insurance, independent guarantees, and suretyships.


• Similarities and differences between indemnity under English law and indemnification under Russian law.


• What circumstances may be specified in a contract as grounds for indemnification?


• Is it possible to claim indemnification for the inaccuracy of representations and warranties provided?


• What is the difference between indemnification and damages?


• Is it necessary to specify the method for calculating recoverable losses in the contract, and if so, how?


• What may and may not be included in recoverable losses?


• How does the recovery of losses work over time (statute of limitations, duty to notify of the occurrence of a basis for recovery, occurrence vs. claims basis, etc.)


• How is the creditor’s fault taken into account in the occurrence of the basis for loss compensation?