A closed-end fund dispute rarely concerns one contract. Asset value affects NAV and unit value, manager decisions pass depositary control, and investor rights depend on statute, fund rules, unit class, register records and corporate approvals. The case therefore starts with the full decision chain, not a general allegation that the fund lost money.
- The manager is liable for actual loss caused by breach of law or fund rules.
- The appraiser may be liable for loss caused by an incorrect value, with statutory subsidiary liability of the manager.
- The depositary controls asset disposal and may be jointly liable in statutory cases.
- A poor investment is not itself a breach: duty, breach, causation and loss must be proved.
- The evidence file must cover fund documents, not only the current unit value.
01
Dispute map
- ValueAppraisal / NAV / unit
- Wrong data, method, date, assumptions, liabilities or appraiser conflict.
- TransactionPrice / authority / asset
- Ineligible asset, breach of rules, missing consent or non-market terms.
- GovernanceManager / committee / meeting
- Procedure, disclosure, conflict, voting or implementation failure.
- ExitSale / redemption / wind-down
- Refusal, wrong compensation, deadline, class or calculation.
- InfrastructureDepositary / registrar
- Control, custody, register, payment or approval failure.
02
Immediate response
- 01
Fix the event, discovery date and all potential deadlines.
- 02
Obtain current and historic fund rules, investment declaration and NAV methodology.
- 03
Obtain registrar or depositary statements for each relevant date.
- 04
Send targeted requests to the manager, depositary, registrar and appraiser.
- 05
Preserve valuations, NAV calculations, minutes, ballots, banking records and native correspondence.
- 06
Assess interim measures: transaction hold, depositary notice, meeting, independent valuation or injunction.
- 07
Build the chain: duty → decision → control → transaction → loss.
03
Valuation and NAV
- 01
Compare the valuation report, NAV methodology, fund rules and applicable Bank of Russia rules.
- 02
Review asset, date, basis, approaches, discount, debt, security and post-valuation events.
- 03
For an SPV, distinguish enterprise value from property value and include debt, tax, working capital, guarantees and disputes.
- 04
Compare valuation with transaction price, bank model, independent bids and later disposal.
- 05
Check appraiser affiliation and the source data made available.
- 06
Identify where the error became legally relevant: NAV, transaction price, issue or redemption.
- 07
Statute provides appraiser liability for actual loss and subsidiary manager liability in the specified framework.
04
Asset purchases and sales
- 01
Check asset eligibility under statute, fund category, declaration and fund rules.
- 02
Verify signatory authority, manager approvals, committee decision and depositary consent.
- 03
Compare asset and share deals, price, deferral, security, warranties and risk allocation.
- 04
Review due diligence, investment memorandum, alternatives and reasons for rejecting a better bid.
- 05
Trace buyer financing, circular payments, side letters and subsequent deals.
- 06
Separate business risk from a specific mandatory or fund-rule breach.
- 07
Calculate loss using a defensible counterfactual, not the highest appraisal.
06
Manager liability
- 01
Article 16 makes the manager liable to unit-holders for actual loss caused by breach of statute or fund rules.
- 02
Identify the precise duty, act or omission, causation and evidenced loss.
- 03
Incorrect issue or redemption compensation is expressly within the liability framework.
- 04
Management liabilities are first met from fund assets; statutory recourse to manager assets may arise on insufficiency.
- 05
Contractual, corporate, regulatory and tort grounds may overlap, but double recovery is not permitted.
- 06
A fall in unit value without a proved breach is not automatically recoverable loss.
The statutory standard is actual loss. The issue is therefore not dissatisfaction with performance, but the asset lost or expense incurred because of the proved breach.
07
Depositary control
- 01
The depositary controls compliance of asset disposal with statute, Bank of Russia rules, the declaration and fund rules.
- 02
Payment control may operate through the statutory banking process, not only a separate consent letter.
- 03
Request the control rules, manager documents and records of consent, refusal or breach.
- 04
If the breach was apparent, ask why control did not stop it.
- 05
Article 43 provides joint liability with the manager in specified custody, recordkeeping and control failures.
- 06
The control perimeter depends on statute, fund rules, contract and information actually received.
08
Investment committee
- 01
Define the committee’s exact authority; approval powers do not turn it into the licensed manager.
- 02
Check appointment, conflicts, quorum, ballots and wording of the decision.
- 03
Compare the completed deal with approved price, term, counterparty, security and budget limits.
- 04
Identify which materials were supplied before the vote and what was withheld.
- 05
A negative decision or no quorum can block a deal where fund rules make approval mandatory.
- 06
Personal liability follows role, documents and legal basis, not membership alone.
09
Unit-holder meeting
- 01
Check who could demand a meeting, the holder list and voting unit classes.
- 02
A qualifying holder demand must comply with competence and form; a manager refusal is separately reviewable.
- 03
Test notice, materials, quorum, ballots, proxies, count and voting report.
- 04
Compare the resolution wording with statutory and fund-rule competence.
- 05
Assess whether the defect affected the vote and claimant rights.
- 06
Before litigation, consider redemption rights and a properly reconvened meeting.
10
Redemption and compensation
- 01
Distinguish third-party unit sale, manager redemption and termination of the entire fund.
- 02
Check legal basis, filing window, application form, holder status and register record.
- 03
Obtain written reasons for refusal and test them against statute and fund rules.
- 04
Recalculate compensation using the correct NAV date, unit class, discounts and restricted-unit rules.
- 05
Check broker, nominee, registrar and tax-agent roles.
- 06
For meeting-related exit, preserve evidence of a vote against and timely application.
11
Replacing the manager
- 01
Confirm meeting competence, voting classes and quorum.
- 02
Before voting, line up the incoming manager, infrastructure consents, document transfer, bank access and SPV corporate rights.
- 03
Inventory originals, contracts, litigation, debt, powers and unfinished transactions.
- 04
Replacement does not extinguish claims against the former manager.
- 05
The incoming manager should perform an opening review and report discrepancies.
- 06
Transfer disputes require quick interim and regulatory action to protect asset operations.
12
Regulatory complaint
- 01
First send a reasoned complaint to the manager through its formal channel and retain the reference number.
- 02
Where appropriate, contact the SRO, depositary and Bank of Russia through official channels.
- 03
State dates, fund, rules, exact provision, evidence and requested supervisory action.
- 04
Supervision does not replace a civil claim for private loss.
- 05
Separate disclosure, valuation, transaction, register, redemption and conflict issues.
- 06
Preserve supervisory replies in the evidence file.
A Bank of Russia complaint may support supervisory review and record a breach, but a private monetary remedy usually needs a separate claim.
13
Claims and defendants
- 01
Identify proper defendants: manager, appraiser, depositary, registrar, counterparty or several parties.
- 02
Choose the remedy: damages, invalidity, performance, register correction or compensation.
- 03
Check arbitration agreement, jurisdiction, venue and all limitation periods before the pre-action letter.
- 04
For invalidity, prove the ground, counterparty knowledge and restitution impact on the fund.
- 05
For damages, prepare base and alternative models without speculative profit.
- 06
Interim relief must be proportionate and preserve fund value.
14
Evidence and experts
- 01
All relevant fund rules, amendments, declaration and NAV methodology.
- 02
Registrar or depositary statements for each relevant date.
- 03
Valuation reports, instructions, source data and correspondence.
- 04
Committee and meeting notices, lists, ballots, minutes and reports.
- 05
Investment papers, due diligence, bids, contracts, payments and side letters.
- 06
Depositary consent and control records.
- 07
NAV, unit value, compensation, fees and expense calculations.
- 08
One timeline linking breach, causation and actual loss.
15
Settlement strategy
- 01
Define the minimum outcome: payment, buyout, asset sale, manager replacement, disclosure or governance change.
- 02
Compare litigation with independent revaluation and a commercial exit.
- 03
Fix price formula, date, tax, costs and pre-closing value adjustment.
- 04
Condition releases on performance and include default mechanics.
- 05
Do not use fund assets to settle personal liability without authority and holder-interest review.
- 06
Check whether settlement requires a meeting, depositary action or fund-rule amendment.
16
Red flags
- 01
The manager answers only that all investment involves risk.
- 02
The valuation is provided without instructions or source data.
- 03
Headline price matches appraisal but payment terms and warranties are materially worse.
- 04
Affiliation is hidden through an adviser, loan or resale.
- 05
The depositary cannot show what it reviewed.
- 06
Meeting materials were late or not sent to every voting class.
- 07
Compensation uses the wrong date or class.
- 08
Historic fund rules and NAV policies are unavailable.
- 09
The new manager accepts the fund without an opening review.
- 10
The damages case relies only on the fall in unit value.