A legal ruling by the Moscow Arbitration Court in a dispute between the company Vimpelcom over its lease in the Tizpribor building could have wide-ranging impacts on the commercial real estate market. The company had demanded new terms be set for its rental agreement with the company Eastern Property Holdings (which owns its HQ building) because of the devaluation of the rouble. Many expect there to be a move for massive revision of leases.
Vimpelcom insisted on changing rental agreement due to substantial change of circumstances in the form of devaluation and the actions of the Central Bank in November 2014, which led to the abandonment of the exchange rate of currency regulation mechanisms and to a fall in the value of the rouble. Most rents are denominated in US dollars, which is now far more expensive than it was a year ago. The court rejected the plaintiff’s argument, however, saying that a court of law did not have jurisdiction over such a matter and that other means would have to be pursued to force through a change of the contract.
