Cases of Forfeiture by the Russian Federation of Shares (Interests) in “Strategic” Companies Due to Non-Compliance with Federal Law No. 57-FZ dated April 29, 2008
In the last year and a half, a line of Russian court decisions has been actively developing on the forfeiture of shares (interests) of companies “strategic to national defense and state security” by the Russian Federation due to non-compliance by their shareholders (controlling persons) with the requirements of Federal Law No. 57-FZ dated April 29, 2008 “On the Procedure for Making Foreign Investments in Business Entities of Strategic Importance to National Defense and State Security” (hereinafter, “Law No. 57-FZ”). The development of this line of court decisions was reflected in the amendments to Law No. 57-FZ, which entered into force on May 9, 2023. According to the amendments, invalidity of void transactions (actions) executed by a foreign investor intentionally in violation of Law No. 57-FZ may result in direct forfeiture by the Russian Federation of shares (interests) of the “strategic” company and its fixed production assets, or income derived by the parties as a result of such transactions (actions).
In this overview, we present a selection of court cases related to the forfeiture of shares (interests) of “strategic” companies by the Russian state. The overview will be updated periodically as the relevant court practice develops.
 I.e. engaging in one of the “strategic” activities listed in Law No. 57-FZ, such as nuclear waste handling, transport, and disposal; activities involving infectious agents (except for the cases when such activities are carried out by a company whose core business is related to food production); arms and military technology research and development, design and manufacturing; fishing and development of the continental shelf; aerospace industry; aviation security; cryptography and encryption services and dealing in encryption devices (except if such activity is carried out by banks in which the Russian Federation does not hold an interest); media and publishing, including television and radio broadcasting covering territories or population exceeding certain thresholds; subsoil use on specified subsoil plots of federal significance, etc.
 The selection includes cases related to violation of Law No. 57-FZ. Cases related to violations of privatization, anti-corruption, and other laws, which resulted in the foreclosure of shares (interests) of companies by the state, are not considered in this overview.