HOSPITALITY AND LEISURE IN

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1 HOSPITALITY AND LEISURE IN RUSSIA and CIS

2 A team that will deliver more The DLA Piper s Russian Hospitality & Leisure team works with the majority of international operators and many owners of internationally branded hotels in Russia and the CIS. We help you overcome the many unique challenges you will face with your hotel project across all areas of law. Partner Scott Antel, who heads our Russian/CIS Hospitality Practice was awarded the 2012 Leadership Award at the Russian Hotel Investment Forum for contribution to the hotel industry. Combining legal expertise, sector experience and knowledge of the Russian market street realities, we offer pragmatic solution. Our team advises Russian owner/developer clients on how the international hotel management structure works, what are best practice and key points to focus on in negotiations. From working with both owners and operators, we know the key commercial points of concern, as well as the negotiating boundaries both parties may usually allow. We can save you time and money by focusing on the key elements in negotiations. We have built a reputation for getting deals done timely and efficiently. In addition to advising on legal aspects of hotel management, our team is also active in such areas of hospitality and leisure as advising on legal aspects of design and management of golf courses, ski resorts, spa and restaurants, and on large-scale event/catering contracts. We also have represented both buyers and sellers on numerous hotel acquisitions and have structured and represented parties to multiple hotel development joint venture agreements. 02 Hospitality and Leisure in Russia and CIS

3 Our global presence With more than 200 lawyers throughout our worldwide offices, DLA Piper s global Hospitality & Leisure group advises owners, managers, franchisors, developers and lenders with respect to hotels and other hospitality and leisure businesses around the world. We offer the extraordinary breadth and depth of our core practice groups, including Corporate, Employment, Finance, Franchise and Distribution, Intellectual Property and Technology, Litigation and Regulatory, Pensions and Benefits, Real Estate and Restructuring, to serve the needs of our clients in the sector. Our industry focus and experience enable us to deliver a best-practice service to our clients in connection with their local and international hotel investments and operations. The skills, resources and attitudes you need, when and where you need them: we can help you achieve more. 03 Hospitality and Leisure in Russia and CIS

4 Areas of Expertise Management, franchising and lease agreements Acquisitions and disposals of hotel/leisure companies and assets Corporate and commercial Employment Financing and funds Health, safety and environment Intellectual property and technology Licensing Litigation and regulatory Operational legal matters Legal issues of loyalty programmes Planning and construction Public affairs and lobbying Real estate (including development) Sponsorship arrangements for events Tax structuring and litigation Areas of business Hotels, including condominium hotels, branded residences, apartment hotels and shared ownership schemes Resorts, including mixed use, leisure, timeshare, interval ownership, private residence clubs and country clubs Serviced apartments Leisure operations, including health and fitness facilities, spas, gyms, leisure complexes, golf courses, ski resorts, Olympic facilities, amusement parks, cinemas, marinas, pubs, nightclubs, casinos and gambling establishments Large event and catering contracts for sports, music and theatre events BRANDS Our experience includes projects (representing owners or international hotel operators) under the following hotel brands: Carlson Rezidor Hotel Group (Radisson, Park Inn, Park Plaza) Intercontinental Hotels Group (Intercontinental, Crowne Plaza, Holiday Inn, Staybridge Suites, Hotel Indigo) Marriott Hotels and Resorts (The Ritz-Carlton, JW Marriott, Renaissance, Courtyard) Accor (Sofitel, Novotel) Starwood Hotels Group (W Hotels, Sheraton, Le Meridien, the Luxury Collection, Four Points by Sheraton) Fairmont Raffles Hotels International (Fairmont, Raffles, Swissôtel) Hilton Hotels Group (Hilton, Hilton Garden Inn, DoubleTree by Hilton) 04 Hospitality and Leisure in Russia and CIS

5 Morgans Hotel Group (Delano, Mondrian) Capella Hotel Group (Capella Hotels, Solis Hotels, Auriga Spa Brand) Extreme Hotels (Extreme) Azimut (Azimut) Millennium Hotels & Resorts (Millennium) Jumeirah (Jumeirah Hotels & Resorts) Our experience includes representing the following major owners: OAO Krasnaya Polyana Rosa Khutor Renova StroyGroup Regional Hotel Chain Capital Partners in Russia, Kazakhstan and Turkey numerous individual hotel owners/developers SOME EXAMPLES OF OUR WORK Acquisitions and disposals of hotel/leisure companies and assets Advising the buyer of one of Russia s oldest and most prestigious hotels: the Grand Hotel Europe St Petersburg one of the most significant Russian hotel transactions in recent times. Assisting Regional Hotel Chain (VIYM group) in acquisition of Marriott Paveletskaya Moscow. Representing the Russian seller in the sale of two large St Petersburg hotels to foreign buyers for subsequent foreign branding and operation. Advising on various legal and tax due diligence projects relating to potential site acquisitions or conclusion of management contracts for hotels in Russia, Ukraine, Kazakhstan, Azerbaijan and Georgia. Multi-development hotel deals Representing the owner in the negotiation of a strategic development agreement for construction of 20 regional city hotels, the first multiple development of its kind in Russia. Negotiating the commercial terms and structuring project for a suite of trophy luxury hotels and branded residential properties in Moscow and St Petersburg. Representing the three of the four Sochi 2014 Olympic site major investors developing hotels and branded residential properties at the Krasnaya Polyana alpine sites and the Adler Main Olympic Basin sites, comprising more than 30 hotels. Advising international hotel operator on terms of multi-development agreement with a Russian developer of 7 hotels in three to four star segment in the regional cities of Russia as well as negotiating a format set of management and ancillary agreements to be replicated for specific property. 05 Hospitality and Leisure in Russia and CIS

6 Advising owners Advising owners on the type of property they should build, recommendations on the most preferable types of brands to operate the property, owner introduction to international hotel operators and how to effectively negotiate hotel management agreement terms with operators. Preparing a hotel management contract benchmark summary for a local hotel owner to assist in understanding and negotiating fee rates and terms with a potential foreign operator. We also assisted in the negotiations process and drafted specific revenue and average rate performance tests and operator guaranty clauses. Representing the owner in connection with the redevelopment of historic properties in Moscow and Sochi to be branded under the Fairmont and the Swissôtel brands as well as advising on the contract terms and agreements for the Swissôtel branded hotels in Novosibirsk, Kazan and Odessa. Representing developer in hotel management agreement negotiation for the landmark property in Kazan to be operated under Swissôtel brand. Representing the owner of a luxury beach resort (Morgans) hotel in Cesme, Turkey. Negotiating on behalf of developer with Carlson Rezidor Hotels Group management contract terms for the Park Inn branded hotel located in Novokuznetsk and Paulaner branded restaurant. Advising on an international investor s bid for several prime Moscow landmark sites for the development of luxury hotel properties as well as mixed use luxury hotel/condominium developments. Representing operators in management contract negotiations for more than two dozen three and four-star internationally branded business hotels in Russia. Advising international hotel operators in relation to hotel agreements Advising Morgans Hotel Group on the management contract terms and agreements for Delano branded hotel to be developed in Moscow. Representing an operator in the negotiation of a 1,000-room Expo Hotel in Moscow the world s largest Holiday Inn hotel. Advising international hotel operators in relation to various operational matters Legal analysis and implementation assistance for a clustered shared service facility on behalf of a large international operator. Advising several international hotel operators on optimal structure of loyalty programmes fees flow and related contractual set-up. Advising several major international hotel operators on numerous operational legal matters related to specifics of Russian regulatory, tax and accounting issues. Reviewing and structuring optimal mixed use documentation involving an internationally branded hotel complex, including branded condominium and residential properties and luxury retail facilities. Employment issues Developing standard employment contracts, including those for the employment of foreign personnel. We also drafted internal labour policies and procedures to proactively defend against potential adverse claims from employees. Advising on employment issues following corporate restructurings, including the transfer of employees, termination of various employees contracts and a step plan of action for implementation. We drafted all relevant documentation for the transfer process. 06 Hospitality and Leisure in Russia and CIS

7 Intellectual property and technology Undertook a corporate restructuring and IP migration and conversion project for a major international operator involving Russia and 5 other CIS countries. Registering intellectual property intangibles for international hotel properties and migration of these rights to favourable tax jurisdictions for tax-efficient charge back to the local operating properties. Negotiating and drafting numerous hotel franchising and license agreements to obtain patent authority registration and achieve efficient tax deductibility for the franchisee. Litigation and regulatory Acting in more than three dozen tax, trademark, labour law, liquor and related licensing disputes on behalf of various hotels, with a success rate of more than 95%. Successfully defending an owner and manager in a contrived criminal investigation and attempted security services takeover of a major Moscow hotel, including coordination of embassy and international press influence. Real estate (including development) Advising on the real estate issues relating to three luxury hotels and branded residential complexes on prime-site Moscow properties. Tax structuring Advising on tax and contract terms and agreements for the developer/ owner of the first international luxury standard property (Ritz Carlton) to be built in Moscow, Russia and Almaty, Kazakhstan (Ritz Carlton and JW Marriott). The latter project included branded residence and condo-hotel components. Drafting an improved management agreement structure for several hotel owners and foreign operators to provide tax efficiencies, owner deductibility and operator tax-free repatriation. Acting in numerous major tax disputes on behalf of owners/ international operators, relating to the wholesale challenge to the deductibility of management fees. Brand and trademark migration structuring and implementation for improving the tax efficiency of brand licensing structures. Day-to-day legal and tax advisory services for the majority of Moscow and St Petersburg hotels. Leisure operations, including health and fitness facilities, spas, gyms, leisure complexes, golf courses, ski resorts, Olympic sports objects, amusement parks, cinemas, marinas, pubs, nightclubs, casinos and gambling establishments Representing both franchisors and franchisees in various theme restaurants in Russia. Advising on the legal, tax and commercial issues relating to a EUR 1.5 billion luxury class hotel and residential resort in Kaplanskaya (Bodrum) Turkey, including five luxury resort and spa hotels and residences as well as branded golf and yacht club facilities. Structuring and drafting documentation as well as negotiating four Signature golf course design contracts, including separately branded hotel and residential components in Russia and Kazakhstan. Advising on a branded luxury hotel/spa complex in Russia and Kazakhstan. Negotiating branded spa outsource contracts for several luxury hotels. 07 Hospitality and Leisure in Russia and CIS

8 About us DLA Piper is a global law firm with 4200 lawyers located in more than 30 countries throughout the Americas, Asia Pacific, Europe and the Middle East, positioning it to help companies with their legal needs anywhere in the world. We have a well-established practice in Russia with more than 100 lawyers in our offices in Moscow and St Petersburg. DLA Piper lawyers are often quoted in the press and contribute to publications covering various practice areas, including real estate and hospitality. Our hospitality team are frequent speakers at conferences held in Russia (Russia & CIS Hotel Investment Conference) as well as abroad (International Hotel Investment Forum in Berlin). CONTACT INFORMATION Moscow St. Petersburg Scott Antel Partner, Head of Hospitality & Leisure for Russia & the CIS T +7 (495) scott.antel@dlapiper.com Denis Sosedkin Partner T +7 (812) denis.sosedkin@dlapiper.com Pavel Elnikov Senior Associate T +7 (495) pavel.elnikov@dlapiper.com Natalia Nikolaeva Senior Associate T +7 (812) natalia.nikolaeva@dlapiper.com If you have finished with this document, please pass it on to other interested parties or recycle it, thank you. DLA Piper is a global law firm operating through various separate and distinct legal entities. Further details of these entities can be found at Copyright 2013 DLA Piper. All rights reserved. JAN