STOCKMANN plc company announcement
Stockmann's department store located in the Smolensky Passage shopping centre in Moscow city centre is closed until further notice. The lessors of Stockmann in the said shopping centre are Mostroiekonombank and its subsidiary, the real estate company of Smolensky Passage. Stockmann has operated in the premises since 1998 and the company has a right of option under the lease agreements to extend the lease period until 2018. In accordance with the lease agreements, Stockmann has in 2006 informed the lessors that it will exercise this option. The lessors have disputed the existence of the right of option and Stockmann has, in accordance with the
agreements, submitted the matter to be decided by the International Commercial Arbitration Court of Moscow (ICAC). The Arbitration Court has found for Stockmann and stated that Stockmann has the right to continue the lease until April 30, 2018, in accordance with the terms and conditions currently in force. As to the decision regarding 10 per cent of the leased premises, it was further required that the terms and conditions of the lease agreement must comply with the peremptory provisions of the Russian legislation, which requirement the current lease agreement has already satisfied.
Despite the decisions of the Arbitration Court, the lessors have by relying on self-help partly discontinued the distribution of electricity
and have by their activities made it impossible to continue business operations of the department store as from Tuesday, May 13, 2008. The measures are in breach of the lease agreements currently in force and grossly violate the legitimate rights of Stockmann as the lessee. As a result, Stockmann will commence legal action against the lessors and present a substantial claim for damages for the prevention to use the premises.
The department store in question is one of the four Stockmann department stores located in Moscow. Stockmann will open its fifth department store in the Metropolis shopping centre in October 2008, making it the fifth store in the Moscow city area. The sixth department store in Moscow will be opened in Rostokino shopping centre either in late 2009 or early 2010.
A total of 350 Russian employees work at the department store, and their access to work is prevented by the actions undertaken by the lessors. If the situation is prolonged, Stockmann will endeavour to offer a number of them work in its other department stores located in the Moscow area.
Source Stockmann PLC.
If you want to add a comment, please login!