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MAGENTA Legal provides legal representation in Russian courts for investors seeking to challenge unlawful refusals in procedures involving depositary receipts, forced conversion, securities allocation and related capital markets matters.

Since 2022, the Russian securities infrastructure has undergone a fundamental transformation. Many investors who held depositary receipts through foreign brokers, custodians and nominee chains faced practical barriers to exercising their rights: blocked settlement systems, suspended standard conversion mechanisms, formalistic requirements from registrars and depositaries, and refusals based on alleged deficiencies in documents confirming ownership.

In a significant number of cases, however, Russian courts have taken the side of investors. Court practice includes decisions in favour of both Russian and foreign investors, including investors from so-called “unfriendly” jurisdictions. These cases show that a refusal by a registrar, depositary, broker or other infrastructure participant is not always the final answer.

Where an investor can demonstrate that they held the relevant securities, complied with the applicable procedure, and the refusal was unlawful, inconsistent or excessively formalistic, judicial protection may be available.

MAGENTA Legal assists investors in assessing and pursuing such claims.

What types of cases we handle

Our work may include disputes relating to:

• refusal to process forced conversion of depositary receipts into Russian shares; 
• refusal to perform or recognise allocation of securities following redomiciliation;
• refusals to credit past dividends based on the application.

These matters may arise in connection with a broad range of depositary receipt and securities programmes, including, among others, TCS Group, HeadHunter, VK, CIAN, Etalon, Rusagro, EVRAZ, Ozon and other issuers whose securities or depositary receipts have been affected by conversion, redomiciliation, allocation or infrastructure restrictions.

Each case is highly fact-specific. The prospects of litigation depend on the issuer, the applicable statutory regime, the procedure used, the documents submitted, the wording of the refusal, the custody chain, the investor’s jurisdiction and the evidence available.

Our expertise

MAGENTA Legal has more than four years of focused experience in capital markets matters affected by the post-2022 transformation of the Russian securities infrastructure.

Our team has advised and represented investors in matters involving depositary receipts, forced conversion, standard conversion, dividend recovery, interaction with Russian registrars and depositaries, and evidence collection from foreign brokers and custodians.

This experience includes hundreds of successful cases involving forced conversion and standard conversion procedures, as well as complex matters where investors needed to reconstruct and evidence their rights through foreign custody chains.

Our capital markets practice has been recognised by leading Russian legal rankings. We combine this recognised expertise with practical experience in dealing with registrars, depositaries, brokers, notaries, translators, foreign intermediaries and Russian courts.

For investors facing a refusal, this combination is often critical. A successful court case is rarely built on legal arguments alone. It usually requires a carefully prepared evidentiary record, a clear reconstruction of the custody chain, proper analysis of the refusal, and a procedural strategy adapted to the specific infrastructure participant involved.

Court practice in favour of investors

Russian courts have already considered numerous disputes arising from failed or refused conversion and allocation procedures.In a number of cases, courts have upheld investors’ claims and obliged the relevant infrastructure participants to take actions necessary to recognise the investor’s rights. This includes cases where the investor was foreign, held securities through a foreign broker or custodian, or was connected with a so-called “unfriendly” jurisdiction.

This practice is important because it confirms a key point: the mere fact that the investor is from an “unfriendly” country or the securities were held outside Russia, or through a foreign custody chain, does not automatically deprive the investor of judicial protection in Russia.

A recent example illustrates the approach that Russian courts take in forced conversion disputes.

In case No. A40-165494/2023, the dispute concerned an investor’s application for the forced conversion of Polyus GDRs into ordinary shares. The application had been submitted within the statutory 120-day window under the relevant forced conversion regime. However, the depositary did not process the conversion and, according to the court’s assessment, effectively remained passive until the statutory window expired.

This case is important not only because of its outcome, but also because of the principles confirmed by the courts.

First, the courts made clear that an infrastructure participant cannot simply “wait out” the statutory deadline. Where an investor applies within the relevant period, the professional market participant is expected to act reasonably, assess the submitted documents in good faith and provide the investor with a meaningful opportunity to address alleged deficiencies where this is still practically possible.

Second, the case is relevant for the standard of proof in forced conversion disputes. The courts did not require the investor to meet an unrealistic evidentiary standard detached from the post-2022 sanctions environment. In disputes involving foreign brokers, custodians and disrupted cross-border custody chains, the evidentiary assessment must take into account the practical restrictions faced by investors.

This is particularly important for holders of depositary receipts who cannot always obtain ideal-form documents from foreign intermediaries. A registrar, depositary or broker should not be able to refuse conversion solely by relying on excessively formal deficiencies, especially where the investor has provided a coherent set of documents confirming the holding and there are no substantiated reasons to doubt their completeness or reliability.

On 16 January 2026, following the reconsideration of the case, the Moscow State Commercial Court ordered Russian Raiffeisenbank to carry out the forced conversion by opening a depo account and transferring the corresponding 40 ordinary shares of PJSC Polyus. The court also imposed a judicial penalty for delay.

For investors, this case confirms a practical point: a refusal in a forced conversion procedure is not necessarily final. If the investor applied on time, held the relevant securities and can produce sufficient evidence of ownership, there may be grounds to challenge the refusal in court.

For MAGENTA Legal, cases of this type are directly within the scope of our capital markets and investor protection practice. We are prepared to assist investors in assessing the refusal, reconstructing the evidentiary record, preparing the litigation strategy and representing them before Russian courts.

At the same time, positive court practice does not mean that every refusal can be successfully challenged. Courts assess evidence carefully. The claimant must usually show that the relevant securities were actually held, that the applicable procedure was followed, and that the refusal was not justified by law or by the specific facts of the case.

What is usually required to consider litigation

As a minimum, we normally need to see the following basic elements before assessing the possibility of filing a claim:

1. You attempted to use the relevant procedure: You must have applied for forced conversion, allocation or another applicable securities procedure through the relevant Russian institution, such as a registrar, depositary, broker or other authorised participant.
2. You received a refusal or no proper action was taken: There should be a refusal, inaction or another negative result that can potentially be challenged. The exact wording of the refusal is very important. In many cases, the court strategy depends on whether the refusal was based on missing documents, alleged defects in the custody chain, formal inconsistencies, deadlines, sanctions-related concerns or other grounds.
3. The limitation period has not expired: As a general starting point, for many relevant claims the limitation period may be assessed by reference to the three-year general limitation period. Ideally, no more than three years should have passed since the refusal or the moment when the investor became aware of the violation of their rights. If the limitation period may have expired recently, the case may still require analysis. In certain circumstances, there may be arguments for restoration or other procedural approaches, especially where the delay was caused by serious and documented reasons, such as illness confirmed by medical evidence. However, this issue must be assessed individually and cannot be assumed automatically.
4. You actually held the relevant depositary receipts or securities: The investor must be able to prove that they held the relevant depositary receipts or other securities. This may require broker statements, account statements, custody chain confirmations, transaction records, correspondence with intermediaries, notarial inspection protocols, screenshots from broker platforms and other supporting documents. These are only the initial requirements. In practice, the evidentiary package is usually broader and may require detailed reconstruction of the full custody chain from the investor to the relevant depositary or issuer-level infrastructure.

Case audit before litigation

For investors who have received a refusal, MAGENTA Legal offers a separate paid service: a legal audit of the refusal and litigation prospects.

As part of this audit, we may review:

• the investor’s holding documents;
• the application submitted for forced conversion, allocation or another procedure;
• the refusal received from the registrar, depositary, broker or other participant;
• the custody chain and available evidence;
• applicable deadlines and procedural risks;
• relevant court practice;
• possible litigation strategy and expected procedural steps.

Following the audit, we provide our preliminary view on whether the case has reasonable prospects for judicial challenge and what additional documents or evidence may be required.

The audit is a paid service. However, if following the audit we confirm that the case is suitable for litigation and the investor engages MAGENTA Legal for court representation, the audit fee may be credited against the legal fees for the relevant court proceedings.

Contact us

If you received a refusal in a forced conversion, allocation or related securities procedure, or if you believe that your rights as a holder of depositary receipts or Russian securities were not properly recognised, you may contact MAGENTA Legal for an initial review.

Please provide, where available:

• the issuer or depositary receipt programme involved;
• the number of depositary receipts or securities held;
• the broker or custodian through which the securities were held;
• the application submitted for conversion or allocation;
• the refusal or response received;
• available account statements or broker confirmations;
• your jurisdiction and current status of the holding.

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Email: adr@magenta.legal

Each case is assessed individually. This text is provided for general information purposes only and shall not be construed as comprehensive legal advice. The existence of positive court practice does not guarantee a successful outcome in any specific case. Any obligations of MAGENTA Legal shall arise only after the conclusion of a formal engagement agreement and payment of the applicable fees.