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. Last Updated: 07/27/2016

St. Pete Leader Stays Clear of Subway Case




ST. PETERSBURG -- An exasperated Governor Vladimir Yakovlev says he is tired of questions about the feud between the sandwich companies Minutka and Subway.


During a visit to the Legislative Assembly on Wednesday, Yakovlev lingered to talk with reporters. As the governor enthusiastically described his efforts to attract foreign investment to St. Petersburg, he was asked about the long-running Subway-Minutka feud.


"This question just makes me angry," said Yakovlev, his face turning red. "I went to America [last week] and barely stepped off the plane, and people started to ask me questions about Subway."


The four-year legal battle began when an American-Russian joint venture to run a Subway sandwich shop on Nevsky Prospekt disintegrated with the partners trading allegations. The restaurant was left in the de facto control of the Russian partner, Vadim Bordug, who reopened it as Minutka.


On Wednesday, Yakovlev offered his own abridged history of the conflict: "Two men met each other on Nevsky Prospekt. One of them was Russian and had a restaurant, the other had the American firm Subway. Then they argued, began to steal, and split up."


The Russian Supreme Court recently backed an earlier ruling by the Stockholm Arbitration Court, and ordered Bordug to pay $1.2 million to his American partners, the company East-West Invest.


The Americans have been lobbying Yakovlev to see this ruling enforced, but Yakovlev and officials in his administration countered Wednesday that it is not yet time for the governor to get involved.


First the Russian Supreme Court ruling must arrive in St. Petersburg. A local court will then issue an order that Minutka must pay the fine. Then the matter will be in the hands of local court bailiffs.


"We normally allow five days to give a company the chance to pay what they owe the plaintiff voluntarily. If the defendant does not do so, we seize the money from their accounts. If there is no money in their account, we confiscate their property," said a local court bailiff, who spoke on condition of anonymity.


"If there is neither money nor property, we send requests to the city registration chamber, the city bureau for the registration of real estate deals, the city land committee and the tax inspectorate asking them to reveal the firm's accounts or real estate," the bailiff said.


City Hall's top legal official said Yakovlev would only have a role to play if the officers of the court were to meet resistance and the police be called in."


According to international agreements Minutka must comply with the decision of the court," said Dmitry Kozak, city deputy governor and head of City Hall's legal committee. "The officer of the court must execute the decision and if he cannot do so he must go to the police. [In such a case] the governor must assist so that the court's decision is executed."


However, the official who directly handles such matters said he does not see how the city administration has any role to play. "There are no procedures allowing the city administration to get involved," said Sergei Bobrovsky, the deputy head of the federal justice department's St. Petersburg section for the execution of court decisions.


Yakovlev returned to St. Petersburg last Thursday from New York, after a whirlwind tour of meetings with American business leaders. Those meetings included discussions of Subway's recent court victory and Yakovlev's opinion of it -- meetings that apparently left a bad taste in the governor's mouth.


On Wednesday, Yakovlev contrasted the American interest in the $1.2 million Subway ruling with other, larger business fallings out. "What about those others, InterOccidental, who ran away with $2 million -- to no reaction in America?" the governor said rhetorically.


The InterOccidental real estate firm collapsed last year after its American founder returned to the United States leaving behind $2 million in debts.