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bne June 2017 Companies & Markets I 17
Vodka oligarch steps up Stolichnaya brand fight with Kremlin
Jason Corcoran in London
V
vodka brand Stolichnaya from the Kremlin in a battle that stretches back more than a decade.
A decision by a Rotterdam court in 2015 forced Shefler’s com- pany Spirits International (SPI) to hand over some trademark rights to the Russian government. The ruling also led to SPI having to halt the sale of Stolichnaya and Moskovskaya vodka in Holland, Belgium and Luxembourg.
SPI had been hoping to overturn that ruling with a decision on May 17 relating to 13 European jurisdictions, but the court in The Hague deferred final judgement.
This is the first time that a European court has weighed in on the ownership of national trademarks in both EU and non-EU countries. If the Dutch court finds in favour of Russia, SPI argues it would create a dangerous precedent for EU law and would taint the normally business-friendly reputation of the Netherlands.
The battle over the ownership of Stolichnaya vodka has the makings of an epic Tolstoy novel, with a series of skirmishes that feature a fugitive Shefler on the run, as well as allega- tions of death threats, secret distilleries, corporate spying and impounded sea freighters.
“This case represents an expropriation in the name of the Russian state, but really for the benefit of people close to the administration,” SPI’s lawyer Radboud Ribbert tells bne Intel- linews in an interview. “Somebody powerful wanted what the owner of the business has.”
But Joris van Manen, a lawyer from Hoyng Monegier handling the case on behalf of the Russian state-holding FKP, accuses SPI of trying to “politicise” the dispute. “The Dutch courts did not pay attention to these political arguments and confirmed, up and until the Dutch Supreme Court, in various thorough and well-founded judgments that FKP is the legal owner of the Stolichnaya and Moskovskaya trademarks,” van Manen tells bne IntelliNews.
odka billionaire Yuri Shefler has a thirst for a fight. The exiled Russian tycoon and his lawyers were back in a
Dutch court in May, trying to wrest full control of the
While the Dutch court found the company was not legally transformed from a state-owned entity to a private one in 1991-1992, it had yet to decide which party currenty owns the trademarks. “A number of questions still [have] to be answered,” the Dutch court said on its website, noting that, “One of [the] issues is the alleged protection of Spirits as assignee in good faith”.
The court said both parties must make statements on the remain- ing issues as well as the contents of the applicable laws of the 13 countries, after which these issues will be heard in court. After that has taken place, the court will deliver its next judgment.
“With the original case, I think there was more willingness to give Putin the benefit of the doubt”
Much is at stake for SPI. In the 13 EU and non-EU jurisdictions in question, the group says it has sales of 4mn-5mn bottles per year. Pending the outcome of the decision, the group doesn’t sell vodka in the Benelux region, but claims to have lost sales amounting to more than 400,000 bottles.
“The impact of the Netherlands making new laws for 13 differ- ent countries in respect of their national intellectual property would be dangerous,” says Ribbert. “The procedural hurdle for us is high because there is a judgement out there already – which we are fighting to overturn – and it may influence this other court in their own decisions.”
Stolichnaya, or Stoli as it is familiarly known, is a grain-based and quadruple distilled vodka. The company’s early history is cloudy. It was produced in Moscow’s State Wine Warehouse No.1, which was built in 1901 – a date which has sometimes appeared in marketing for Stolichnaya. But the trademark was only registered in 1938, and production is only docu- mented from 1948, though is may have begun a couple of years earlier.
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