Russia passes law allowing courts to block return of foreign companies

Russia's State Duma has passed a law allowing courts to strip foreign investors that exited the Russian market after February 2022 of their contractual right to buy back shares or stakes in Russian companies.

Under the new legislation, foreign companies seeking to return to the Russian market will be able to do so only through court proceedings, Caliber.Az reports, citing Russian media.

The law also allows legal action to begin regardless of whether the foreign investor has sought to exercise its buyback rights.

The new rules will apply only to transactions involving investors linked to countries designated by Russia as "unfriendly", as well as foreign entities under their control and Russian companies controlled by them.

Following Russia's launch of what it calls its "special military operation" in Ukraine, many Western companies, including McDonald's, The Coca-Cola Export Corporation, Nike Inc., Adidas AG and Inditex S.A. (owner of Zara, Pull&Bear, Massimo Dutti and Bershka), either suspended operations in Russia or withdrew from the market entirely.