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Legal outsourcing

Business Advice: Gas Pipeline Construction

15 February 2020
BBNP specialists advised a foreign construction company on a project related to laying a gas pipeline: approval of a supply contract and a construction contract, advising on the organization of the working process, approval and advising on current issues, obtaining permits, solving migration issues, accounting and HR support.

Case Description


We were contacted by an international construction corporation that needed legal and accounting advice on implementation of a large project to lay a gas pipeline in the Northern region.

BBNP specialists advised on the approval of a set of equipment and materials supply contracts for the construction site, the general construction contract, the contract for the use of roads and infrastructure, etc., provided accounting and personnel advice, as well as legal advice on obtaining the necessary permits, solving migration issues and organizing the work process, and advised on current issues.

In the process of having the project approved and implemented, problems were identified due to the fact that the usual work organization and payment schemes specific for the Russian construction sector were not applicable in the international practice, and foreign techniques could not be directly used in working with the Russian government as a customer due to a number of legislative restrictions.

In order to cope with the difficulties related to integration of foreign systems and mechanisms of work organization (such as lump sum, mutual settlements and cost formation, prepayment and advance payment mechanisms, etc.) with the Russian system of design and estimate accounting of work and payment, BBNP lawyers had to conduct long and complicated negotiations with the customer. The issues on periodic reporting acceptable to both parties, limitation of liability of the contractor and its employees, justification and book-keeping of prepayment and advance payment were worked out. BBNP specialists regularly held meetings and negotiations with local authorities and customer representatives at the construction site to form a project implementation plan and minimize possible risks. The basic draft contracts with subcontractors and service providers, premises lease agreements for employees were developed and agreed with the head office; issues of organizing a village for rotation employees, were worked out, bylaws for organizing work on a rotation basis were prepared and adopted.

Fluency in English allowed BBNP lawyers to successfully conduct the negotiation process. It was extremely important, since most of the contractor's representatives did not speak Russian, as well as most of the technical specialists, accountants and engineers of the customer were not ready to conduct negotiations in English. The accuracy of interpreting and explanation of technical, legal and accounting terms to the client is one of the key factors that determine the quality of decisions made during negotiations and the success of international projects in general.

Result


During long and complicated negotiations, BBNP lawyers were able to develop and have a new system of cooperation agreed with the foreign contractor, a set of draft documents required for the project implementation, a legal component when working on a rotation basis, as well as to conduct a number of consultations on migration, tax, labor and other branches of legislation.

For Reference


The main business of BBNP team is the advising foreign businesses in Russia. The company's specialists have been successfully cooperating with international business and large, long-term projects for a long time. Construction projects connected with government customers or companies with government participation in them especially require serious support. At the stage of entry into a tender contract, it is necessary to meet a lot of strict requirements, and in the process of project implementation, many questions arise about labor and migration legislation. The success of the entire project depends on the well-coordinated work of lawyers, managers, accountants and HR specialists.
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