STANDING AS A GUARD OVER BUSINESS INTERESTS

Caspian Energy (C.E.): Mr. Baghirov, what was the goal for establishing the first private law firm in Azerbaijan?

Jamal Baghirov: BM International LLC was established in March, 1993 and in fact has been the first local law firm since proclamation of Azerbaijan independence in 1991. Adoption of new legislation, including the laws "On property", "On business activity", "On enterprises", was followed by first independent business structures that had been established by citizens on the basis of private or joint property rights either as a joint stock company or as a companies with limited liability. The legal support was an essential part for conception of such structures. Precisely at that time the necessity to establish a law firm in Azerbaijan became obvious.

Today our company has been transformed in order to meet the fast market growth. Now BM International LLC has its offices in London, UK and Salem, USA. The representative offices became necessary due to the growth of clients among foreign companies. We make it our aim to provide these companies with relevant legal services with respect to Azerbaijan legislation locally. Taking into account the fact that the company having several foreign representative is considered international we had changed its name – now the company is called BM International LLC.

Today we have very good clients portfolio. Americans have a proverb: "A lawyer works 10 years for the career, and then the career works for the lawyer". Our firm will be 13 in March. Within these years we have transformed from a small law office to a solid enough law firm, serving exclusively in business field. We are business-lawyers, we do not take part in court examinations, although, we have a small branch in Baku where some of our lawyers are engaged in court litigations in order to meet our clients’ needs and when an economic issues occur between Azeri and foreign companies. Yet, our main task is to render assistance in day to day business activity of the foreign companies. We have gained foreign clients’ confidence because of our work and high professionalism. The company has almost no clients in Azerbaijan, but it does not mean that we do not want to work with local companies. The fact is that Azerbaijan businessmen treat lawyers rather differently. For example, if a foreign company plans business activity in Azerbaijan it always starts from learning the investment climate in our country in order to be protected legally. And it will not start the registration process, not to mention the investment, until it is sure that it will be provided with qualified legal support in high-quality Azeri, English, French, Russian and other languages. Azerbaijani approach differs radically from the foreign. Our businessmen not so often turn to lawyers while starting business, evidently, thinking that they are fully informed. As a rule, alas, they turn to lawyers only shall I say, when they "collide with the reality" due to unfair partners or their own unreasoned legal behavior, rivals, and as it often happens due to Azerbaijan’s fiscal bodies. That is to say, rendering a legal support in such situations becomes very difficult because of a simple reason that many "firewood" are "chopped", as "the moment of truth", the legally competent and valid planning of the activity and documents legalization, is missed. Certain contracts, documents, agreement protocols turn out to be signed. As the lawyers say, "what has been already signed is hard to be refuted".

Overall, our firm works successfully enough at Azerbaijan market. There are both transnational corporations and private businessmen in our clients list. Moreover, we provide services to state authorities, governmental agencies and international organizations.

We have only several constant clients in Azerbaijan – legal entities of Azerbaijan Republic, however, even they have a mixed form of property: (i) Azerbaijan-Britain Joint Venture Shirvan Oil, which is the biggest onshore enterprise involved in oil refinery and extraction from Kurovdag field, (ii) Azerbaijan-Britain Joint Venture AzEuroTel, where LukOil Europe Ltd is a foreign participant with the legal status of an English company, (iii) LukOil Azerbaijan, a sub-unit of LukOil, Russian oil giant, taking part in exploitation of the contract square D-222 in the north of the Caspian Sea having wide gas stations network all over Azerbaijan. Among foreign companies it is enough to mention such big companies as Exxon Mobile, BP and LukOil.

C.E.: What fields do the company’s lawyers specialize in?

Jamal Baghirov: Today BM International LLC is a leading national law firm rendering legal services at the highest level. We specialized in the widest range of legal issues representing multinational companies that are engaged in commercial activity in Azerbaijan and local companies in their international business relations.

Our firm renders consultations on all aspects of legislation, and has unexampled experience of assisting the foreign investors implementing investment projects. We render dispute resolutions at the court and governmental offices, and provide support for the privatization processes.

Today BM International is a multiline law firm, consisting of 10 lawyers and assistants. We advise our clients on almost all issues of Azerbaijan legislation, and we have unsurpassed experience supporting foreign investors in the context of implementing their projects in Azerbaijan. Our practice includes rendering legal services to corporate clients, consultations in banking law, finances, privatization, power and natural resources, telecommunication, aviation, insurance, real estate, intellectual property, labor law, and private legal issues. Besides rendering common commercial consultations, we provide overall solutions for legal disputes and represent interests of our clients at governmental agencies of the Azerbaijan Republic.

C.E.: In what projects did the company participate in Azerbaijan?

Jamal Baghirov: We have taken part in a number of big projects. For example, in 1995 we were one of the EBRD consultants from Azerbaijan with respect to $53 million credit for reconstructing Yenikend HES. We were actively working on the project at that time – it was our first project in the power-engineering field. Then, together with the audit company Ernst&Young we won the tender and became a consultant on transfer of power-distribution networks into management: Bakielectricshebeke, Sumgaitelectricshebeke, Ganjaelectricshebeke, Ali-Bayramlielectricshebeke. Approximately for two years we, as advisers, have provided legal solutions for such matters as transfer of management to different entities, mainly, we were dealing with contracts on sale and power distribution transactions, assisted in obtaining different licenses, etc. The final decisions on these matters were taken by Azerbaijan government later on. The list of the projects where our company has taken part is long. It is important that the contracts pass legal examination by Azeri lawyers in Azerbaijan. Today practice of major banks (EBRD, IBRD, IFC) shows that besides the foreign lawyers’ advise, banks need corresponding consultations by local lawyers in their credit granting facilities.

Thus, the investors can not sign documents without Azeri lawyers, gain an understanding of the matters or support themselves qualitatively. For example, I am proud that BM International LLC is included into European legal reference book Chambers Global and Legal 500 and is one of the best law firms in Azerbaijan. We are included into this book every year, as the only Azerbaijan company, meeting the Chambers Global requirements.

We have constantly widening mutual relations with many leading international law firms and we are capable to provide legal services in any place of the world. In addition, BM International LLC is the regional partner of the well-known US law firm Chadbourne & Parke LLP.

C.E.: What are the company’s future plans?

Jamal Baghirov: Today our company is in the short list of legal companies enlisted by French oil company Total for the project establishing Kazakhstan-Azerbaijan transport corridor. It is well known that Baku-Tbilisi-Ceyhan (BTC) pipeline’s potential is much more than the extraction perspectives from Azeri-Chirag-Guneshli fields. The economic preferences outlet to the Mediterranean Sea care for the ecological problem of Bosfor – all these make BTC attractive for all Middle-Asia oil extracting republics. But on the other hand, we understand that each country has its own interests and they do not always coincide, they often come across when antagonistic positions appear. So at the moment Actau-Baku-Tbilisi-Ceyhan route is very profitable for Kazakhstan. It is safer and cheaper from economic point of view (profitability, prime cost, etc.). Kazakhstan oil transportation process that French company Total has undertaken is profitable for Azerbaijan since it will get extra profits from the transit.

It is very hard work, and we think that it will take about 2 years. However, there is a potential of the underwater pipeline too. If we win the tender now and become Total’s consultant, we can be future consultants of the underwater pipeline Baku-Actau and provide services similar to what Baker Botts LLP provided during BTC pipeline construction period.

C.E.: What must be done for improving Azerbaijan’s legislative system?

Jamal Baghirov: I think a lot must be done. The problem of any economy is the lack of good legislation. A good legislative basis is an economic development and investment guarantor. If there are no laws there will be no economy or it will be a lop-sided legally unprotected economy.

Today it is necessary to improve practical legal science. There are few lawyers and economists at Milli Majlis. Let us say, the US senate is a legislative body and a person without high legal education can not become a senator since they prepare and write the laws. The first defect is that there is no one to work on the laws. Just recently the third communication law has been passed. The beginning was good: the working group was created, our company among other major ones was asked for provision of relevant comments and proposals since our company has work experience in that field. For the above-mentioned purposes I provided three lawyers. Number of proposals was made by them but none was accepted.

It is necessary to change the officials’ attitude towards drafting laws and working thereon, to engage not only the theorists but also the experts. There are major law firms in Russian Federation that are recruited for drafting laws, for example, Borshev & Partners. Why we do not have the same practice?

I think that the state of the legislative basis is measured not by the number of laws but by quality of their drafting and by implementation mechanisms. I think, for example, the Civil Code must in complexity comprise many matters. I think there must be definite numbers of relevant codes but not immeasurable quantity of laws and other normative-legal acts. I suppose, for example it would be more expedient to have corresponding instructions of the Ministry of agriculture instead of laws about seed-growing or insemination of cattle.

Finally, as a lawyer, I would like to wish that the laws in Azerbaijan were adopted competently and stated neatly in order to develop exact monitoring mechanisms, so that no temptations would arise to seek for ways of law evasion, since a strong legislative system is the heart of a strong economy and accordingly the guarantor of the society’s economic well-being.