Law firm Pepeliaev Group is pleased to offer its clients a new escrow agent service. Escrow is a globally recognised legal mechanism. It involves an escrow agent, a third party, holding money or property for contracting parties when, for instance, there is a deferral of payment under a contract or of a transfer of ownership title to the item that is being acquired. The escrow agent keeps the property under a contract and then transfers it to either party as long as certain conditions are met.
The approach is relevant when contracting parties want an independent third party to keep a deferred payment or other property. In our case Pepeliaev Group will act as an independent arbiter who will transfer the assets or part of the payment to the relevant party as long as the conditions occur that the parties have agreed upon. Escrow services are traditionally used in the context of transactions involving real estate, securities and goods and also when services are supplied and work is performed.
Not until a reform of civil legislation in 2014 did this legal mechanism first appear in Russia. Since 1 June 2018, changes in escrow regulation have come into effect, meaning that law firms may now act as escrow agents.
Pepeliaev Group’s services comprise: drafting escrow agreements and providing legal support when they are concluded; providing legal support during negotiations and devising the approach when contracting parties use an escrow mechanism; and providing escrow agent services direct.
Legal advisers have the edge over notaries and banks, which have traditionally acted as escrow agents, in a number of ways. Among Pepeliaev Group’s advantages are: (i) we are flexible and responsive in decision-making and the use of escrow mechanisms, at the same time complying fully with current legislation; (ii) we can handle legal matters relating to an escrow agreement ourselves, without any need to outsource; (iii) our pricing policy is flexible and takes account of the specific nature of the transaction; and (iv) we are a known quantity, with our strong reputation guaranteeing our clients integrity, impartiality and commitment to discharging our obligations properly.
“We have an advantage in that we have extensive experience in providing legal support to our clients, including in implementing complex M&A transactions and transactions to acquire significant real estate, in formalising commercial agreements during supply and distribution transactions, and so on," comments Sergei Shorin, Head of M&A Group at Pepeliaev Group. "A further plus of ours is the position we hold on the market. These factors enable us to act as a solid and reliable partner that is able to provide escrow services at the very highest level”.