Massimo Dutti will pay 140 million rubles for the closure of the flagship store in Moscow

The Ninth Arbitration Court of Appeal upheld the decision of the first instance on the recovery of 140 million rubles from the retailer Massimo Dutti. debt for renting premises in a building on Kuznetsky Most in the center of Moscow. His ruling was published on 31 January. Thus, the decision of the court entered into force.

The Cypriot Hartney Enterprises Limited, which owned premises on Kuznetsky Most, filed a lawsuit against Massimo Dutti in the summer of 2022. The building itself housed the retailer’s flagship store with a total area of ​​almost 1,000 sq. m. m. But in March last year, the owner of the Inditex brand announced the temporary closure of retail outlets in Russia and tried to get a discount from landlords. Hartney Enterprises Limited refused to change the terms of the contract. She terminated the agreement unilaterally due to non-payment of rent, evicted Massimo Dutti from the premises, and also filed a lawsuit against the retailer demanding to pay off debt, penalties and a penalty in the amount of 140 million rubles. It was eventually satisfied by the Moscow Arbitration Court in October 2022.

Massimo Dutti, in turn, filed a counterclaim, insisting that the unilateral termination of the lease was illegal. The company explained this by the fact that due to the military operation that had begun, the sanctions imposed and the refusal of logistics companies to transport containers to Russia, the operation of the network in the country became impossible. That is, according to the representatives of the company, it was about force majeure circumstances, follows from the case file. Both instances ultimately refused her.

The court decision looks logical: the owners of the building that Massimo Dutti rented are not on the list of sanctions, and supply failures can be considered technical problems, says Marina Malakhatko, head of the CORE.XP retail department. According to her, the stock of goods at that time was enough to continue operations. “Closing stores in protest is more of an international image story than a commercial one, and the tenant understood that there were risks of paying large compensations,” she concludes.

Difficulties that have arisen for various foreign companies due to the military operation are not considered by the courts as force majeure circumstances, says Sofya Volkova, lawyer at Asterisk law firm. She recalls that earlier Massimo Dutti lost a similar lawsuit from the Cypriot Lindcom Investments Ltd (the owner of the Zelenopark shopping and entertainment complex in the Moscow region, the case is now being considered in the appellate instance). Referring to force majeure was initially pointless, everyone learned this lesson perfectly during the pandemic, says real estate consultant Anna Savenko. According to her, international retailers leaving the country tried everywhere to settle the issue of termination of contracts with the help of settlement agreements.

Hartney Enterprises Limited could not be reached for comment; the ultimate beneficiary of this firm is unknown. According to SPARK-Interfax, Aysel Trudel is the head of its branch in Moscow. A woman with the same name and surname is the creator of the Aizel multi-brand boutique, which sold many luxury clothing brands such as Gucci, Burberry, Loewe and so on. Trudel did not respond to Vedomosti’s request. The owner of the building on Kuznetsky Most has already changed. In December 2022, it was bought out by the structure of the retailer Henderson for 1.2 billion rubles.