BGP Litigation counsel Sergey Lisin speaks with Izvestia about the legal grounds for participating in public procurements when the item to be supplied is as-yet unavailable, clarified by the FAS and upheld by the Supreme Court

"The question of whether an item has to be available to the bidder at the time when it submits a bid goes back a long way, says Sergey Lisin, counsel at the law firm BGP Litigation. And the FAS's position is consistent with Russian civil legislation.

"That approach is based on the principles of a market economy, in which business reputation and the need to honor agreements are important," explains Lisin. "It's considered sufficient if the supplier has worked out where to get the 'promised' item from", he says. 

Expanding on his earlier comments, Sergey Lisin added that under Russian civil legislation a supply contract is categorized as a so-called 'consensual contract', under which the supplier assumes only the obligation to supply the item. And at the time the contract is concluded the supplier need not necessarily have the item in its possession.

Sergey Lisin points out that the Russian Supreme Arbitrazh Court has gone even further in its decree No. 54 rendered by the Presidium on 11 July 2011, extending a similar principle of 'trust' to the sale and purchase of real estate. As a result, agreements on sale and purchase of real estate in Russia can now be entered into on the part of the seller by a person other than the owner of the property. 

Therefore, notes the BGP Litigation counsel, the clarifications provided by the FAS of Russia in letter No. IA/44536/16 are legally sound, and attempts to challenge them in court should end up an utter fiasco.  

The full article (in Russian) is available here: "Верховный суд разрешил продавать государству отсутствующий товар".