SPI Group’s appeal against Russia’s claim to Stolichnaya vodka denied

Spirits maker SPI Group has been dealt a blow in the decades-long saga to keep the rights to Stolichnaya vodka away from Russian state ownership.

In a ruling published on Monday, the Netherlands’ supreme court denied an appeal from SPI against a decision which gave the rights to the famous Russian vodka brand Stolichnaya in Benelux to a Russian state-owned company.

SPI maintains that its owner and founder, exiled Russian billionaire Yuri Shefler, bought the brand from FKP Soyuzplodoimport in 1997 when it (briefly) became a private company following the fall of the Soviet Union at the knockdown price of $300,000. The (now state-owned once again) FKPSoyuzplodoimport argues it was illegally sold to SPI, and Shefler had no right to buy the brand.

A ruling in 2018 forced SPI group to stop selling the vodka in Belgium, the Netherlands and Luxembourg, and repay Russia the profits it has made on Stoli, Stolichnaya and Moskovskaya since 1999. Thanks to the ruling, SPI owws €145,000 in damages.

In 2001, when Shefler left Russia, Soyuzplodoimport won back the trademark rights to the brand in Russia and shortly afterwards launched a legal challenge to SPI’s claim in other international markets.

The vodka is sold by the state-owned company domestically, in Benelux, and in Austria, where the supreme court has ruled in favour of Russian state-ownership twice.

Shefler is currently fighting with the Kremlin in supreme courts worldwide to keep the brand and its high annual revenues. Australia’s federal court has stayed a case against SPI Group’s brand ownership in November, in what was described by SPI’s lawyers as “the longest running Federal Court case presently on the docket in Australia. The court asked for more evidence from the Russian government to justify its own claim.

In 2015 a Dutch court ruled SPI had to cede its trademark rights to the brand across the Low Countries – the ruling upheld this month – but continues to hold it in key markets such as the US, UK and Australia. Several suits in the US, Brazil and Australia have already gone in SPI’s favour during 2016 and 2017.

SPI Group holds the rights to several Stolichnaya trademarks in 13 EU member states including the UK, Denmark, and Spain, but Shefler is preparing to defend the company’s trademarks rights in the markets in a lawsuit that will be heard at The Hague in June.

The Russian state-owned company objects to SPI’s claim on two counts. It claims that Soyuzplodoimport was unlawfully privatised by its management from 1990 to 1992, and that Shefler used intimidation to pressure shareholders into selling the brands to him.

Alexey Maklakov, the general director of FKP Sojuzplodoimport, said the latest ruling in the Netherlands is “very significant and we are sure that this decision will be used as a precedent in the pending court proceedings for Stolichnaya and Moskovskaya trademarks not only in the EU countries but around the world.”