Representatives of the business sector often suffer losses as a result of not consulting with lawyers in a timely manner. We talked to Vladimir Gabrielyan, the director of “Fidelis” Law Firm, about the problems of economic entities with the state system and business recovery plan within the framework of Iravaban.net’s “Law Firms of Armenia” series of interviews. The Company was founded in 2016 and has been providing legal services for about 5 years.

– Mr. Gabrielyan, we know that the recent period was quite difficult for everyone, especially for businesses. Taking into account the coronavirus that arose in 2020 and the second Artsakh war and this is more painful for us. Can you tell us with what problems the businesses mainly address to you. It is a fact that they have both legal and economic problems.

– They applied to us mainly with consulting questions related to the restrictions conditioned by the epidemic, their legality. Many also applied to legal acts related to the mandatory requirement to wear masks, to challenge their legality and other issues.

In connection with the second Artsakh war, I can say that at the moment the problems are mainly financial, but it is too early to talk about the violations of citizens’ rights as a result of the war. As we know, thousands of our compatriots were displaced; their property remained in the territories occupied by the enemy – houses, businesses, lands, etc. In my opinion, these issues will still be raised.

– We also know that “Fidelis” is dealing with bankruptcy issues. This field is associated with various difficulties for individuals. What problems can people who want to be declared bankrupt face?

– Yes, you are right. Bankruptcy is associated with relief from debts. It seems to people that they are declared bankrupt only to get rid of debts, but that is not so. There is a recovery plan, for example, our company wrote “recovery plans” for debtors, they were approved by the court and, so to speak, the debtor has “recovered”. There are problems in this sphere, one of which I will raise. It refers to voluntary bankruptcy. The law stipulates that in case of appropriate conditions, the person must apply for bankruptcy. Thus, a person applies for bankruptcy, relevant certificates are submitted, for example, from the Cadastre Committee, the Traffic Police, stating that the person has no property and has an X obligation, for example, 3 million drams. In addition to these references, the person also submits a statement that that he has no money. In many cases, there are judges who require additional evidence, for example, to bring evidence from this or that bank. I do not agree with that approach, because if a person declares that he has no property, it must already be enough for the court to declare him bankrupt. Otherwise, if the court has doubts about its legality, that the person is lying to the court, then criminal liability is envisaged for that.

If the court thinks that there is a false or premeditated bankruptcy, then there is a set of tools provided by law: the materials may be sent to the prosecutor’s office and the prosecutor’s office will deal with that case.

We have the following situation. If the court wants to make sure with that evidence that the person does not have property, the court will never be convinced of that, because the person can have property in Moscow and Paris, that is, certificates should be demanded from all places. That is why I do not agree with this approach and I cannot understand it, in many cases it causes serious difficulties for a person who wants to be declared bankrupt.

– What solutions can you offer under these conditions? 

– There should be a general approach by the judges and appropriate rules of the game, that if the person presented that he has no property, it should be enough to declare the person bankrupt. Now we have different approaches, they must be eliminated.

– Has the number of people applying for bankruptcy increased after the coronavirus?

– Yes, they have increased. During this time, businesses that have been forced into bankruptcy, have approached us and we have represent their interests, negotiated with creditors, and initiated a recovery plan.

– Since “Fidelis” is mostly related to business people, can you tell us what issues they mainly raise?

– Many economic entities apply to us, their questions and problems are almost the same, connected with state bodies, the State Revenue Committee, community halls, the police. Problems arise mainly due to legislative gaps. We try to resolve the problems of our businesses within the framework of the existing legal regulations.

For example, the State Revenue Committee imposes an administrative fine on an economic entity, issues an administrative act and imposes fine of X amount. There are two ways to appeal this act: to submit a complaint to the Chairman of the State Revenue Committee, and the second is to apply to court.

Initially, we filed a complaint to the superiors, but after exhausting that step and receiving a rejection, we applied to the court. In 90% of the cases, due to their interests, the State Revenue Committee rejected the complaints, and we won the case in the court, the act was declared invalid. I am sure that there are good lawyers in the State Revenue Committee, who also understand that the same act that we appealed and the State Revenue Committee did not declare invalid is in fact an invalid act and we will be able to achieve that success through the court.

The State Revenue Committee must conduct an objective investigation, and if there are grounds to declare the act invalid, it must declare it invalid so that the case does not reach the court and the courts are not overburdened.

– Can we say that the business people also have their share of guilt here, because currently there is formed such a practice that the business does not turn to a specialist until it faces a serious legal problem? What is the reason for this? 

– Yes, today businesses do not turn to lawyers in our country; there is no such culture and it seems to them that it is a waste of additional funds, but in reality the picture is different. They do not apply, and as a result they have problems and further as a result of the created problems they waste more financial resources.

But I can also say that the situation is changing. Businessmen, who have no problem have already applied to our office and signed a service contract and in case of a problem they can apply to the lawyer at any time.

– How important is it to apply to a law firm with such questions ?

– The advantage of a law firm is that in case of the firm the case is dealt with by a large team, which includes lawyers of different specializations instead of only one lawyer  who may be ill, on vacation, and etc.

– What obstacles occur for law firms in Armenia, what solutions do you see for those obstacles?

– The advocacy community is a self-regulatory unit and I can say the following in this regard: every lawyer should raise the authority of the lawyer himself, as a result of contacts with the client, state bodies, should behave in such a way that the role of the lawyer increases in society. The government of any state, if it wants to have a state governed by the rule of law, if it wants to have a country of law, must be interested in having a strong advocacy community.

– The advocates’ community is a self-regulatory unit and in this regard I can say the following: every advocate should raise the authority of the advocate as a result of contacts with the client, the state bodies; should behave in such a way that the role of advocate in society increases. The government of any state, if it wants to have a state governed by the rule of law, if it wants to have a country of law, must be interested in having a strong advocates’ community.