For the lawyers of the Houthoff office, located on the Amsterdam Zuidas, Russia is not just the country that invaded Ukraine a week ago. It is also an important customer. For 17 years, the office has assisted the Russian state in a protracted legal dispute with three former shareholders of energy company Yukos, who are demanding more than $50 billion over the alleged Kremlin’s wrongful expropriation of Yukos.
The invasion of Ukraine and the severe economic sanctions that followed last week are no reason for Houthoff to stop providing that service, says partner Rob Meijer in conversation with NRC† “The general feature of these types of sanctions is that they almost never focus on providing assistance in pending legal proceedings. Nor do we think that sanctions will now be imposed that will prohibit us from assisting the Russian Federation. He must be able to litigate.”
The Amsterdam Court of Appeal postponed the next hearing in the Yukos case last Monday until mid-May. The Ukraine war is not the main reason for this: Russia submitted the request earlier to have more preparation time. Meijer: “We will now also use that time to consider the sanctions up to now.”
Russian customer portfolio
In recent years Houthoff has assisted a large number of Russian clients in addition to the Russian government. Like this belong the banks Sberbank and VTB, telecom company VEON and energy company Gazprom to the customer portfolio. Four museums in Crimea, annexed by Russia in 2014, tried with Houthoff’s support to prevent a collection of art treasures from being transferred to Ukraine – without success, incidentally.
“Houthoff is really Russia’s house lawyer in the Netherlands,” says a former employee with knowledge of the matter. “They do everything from lawsuits to setting up structures for Russian companies. Vodka was drunk extensively with clients in the office. Partners discussed the Crimean treasures with the Russian culture minister. The Russian government is the largest and most profitable customer.”
In criminal law, everyone has the right to a defense. That also applies here
Russian customers pay the top rate of 795 euros per hour at Houthoff, according to an internal cost overview that NRC has seen. In recent years, the firm has hired two Russian-speaking lawyers, among others, to serve clients from the home country. According to former employees, Houthoff is sometimes referred to internally as the ‘Kremlin office’.
A spokesperson for Houthoff would not say to what extent the services to clients other than the Russian government have come under pressure as a result of the sanctions: “We do not make any announcements about clients for whom we work or have worked.”
Payments diverted
On Monday, the dean of the Amsterdam Bar, former De Brauw partner Evert-Jan Henrichs, called on offices to be alert to Russian customers who may want to try to circumvent the imposed sanctions. “This could include transactions that involve a shift of interests, appointments being changed or annulled, and payments being diverted.”
In a telephone explanation, Henrichs points to the example of Chelsea owner Roman Abramovich, a close confidant of Vladimir Putin, who transferred his interest in the London football club to a foundation last weekend, but remained indirect owner himself. “In concrete terms, lawyers must be keen on the transfer of interests, changes in the company top and the diversion of money.” Continuing to provide services to a party that is on a sanctions list is punishable by law.
Henrichs says he is in talks with the firms about the moral question of whether Dutch law firms should still assist clients who are closely linked to the Russian state. He calls the discussion “a complicated one.” “That goes one step further than whether or not you are participating in illegal activities. In criminal law, everyone has the right to a defense. That also applies here.”
Henrichs says he has received many responses to his call to the offices. “Especially from the press, not from the legal profession.”
The Russia issue poses a dilemma for many large firms, according to a tour. Houthoff may be the only office that explicitly says it will continue to provide services to the Russian state, but other offices do not say a definite no to Russian customers either. Most offices say they are “still mapping out” the consequences of the sanctions. They are complying with the announced sanctions and their legal consequences for doing business with Russian clients – but not definitively banning them.
For example, tax consultancy and law firm Loyens & Loeff states that it “maps all relevant files and relevant clients” and takes measures to „compliant deal with the sanctions”. “It is not the case that we are by definition saying goodbye to all Russian customers. That wouldn’t be right either.”
NautaDutilh says that “certain customer relationships, if any, could be affected.” De Brauw Blackstone Westbroek says he has been performing “for more than 10 years” for various parties against the Russian regime, its entourage and Russian state companies. The sanctions therefore have “little or little” consequences for the office. Stibbe office does not want to respond to questions at all.
‘Tires not broken’
Various media wrote yesterday that the Baker McKenzie office, which also has a branch on the Amsterdam Zuidas, would have severed ties with its Russian customers worldwide. The company itself denies in a response to NRC that the office is definitively severing all relations. According to a spokesperson, Baker McKenzie believes the sanctions will affect the law firm’s work: “We are not going into specific clients, but this will mean breaking existing relationships in some cases.”
Lawyer Joris van Manen of the Dutch office of Hoyng Rokh Monegier, who has been assisting Russia in a twenty-year-long case involving the rights to certain vodka brands, said when asked that he “is busy mapping out the consequences of the sanctions and the war.” in Ukraine for this case”.
The association of Dutch trust offices HollandQuaestor (HQ) is more outspoken about whether it is desirable for its members to still be active for Russian clients. HQ chairman Martin Wörsdörfer says that in principle the trade association leaves the choice with its members. “But we join the call to turn off the taps to Russia. I make that appeal to the entire sector, including the offices that are not affiliated with HQ. You should not want to work for an aggressor like Russia.”