Russian trade relationships with Turkish counterparties have grown substantially over recent years, and so has the volume of disputed debts routed through intermediate holding structures. In 2026, Russian courts have begun applying a noticeably stricter evidential and doctrinal approach to unwinding shell company structures with Russian elements — a shift that directly affects the recovery options available to Turkish creditors who are attempting to reach Russian-held assets sitting behind layers of intermediate entities.
The core shift entering 2026 relates to how Russian courts assess the legal substance of intermediate holding structures interposed between a foreign creditor and the Russian-based assets that creditor is attempting to reach. Previously, the burden of demonstrating that a structure constituted a vehicle designed to insulate assets from legitimate claims fell heavily on the claimant. Courts applied a formal analysis: if the intermediate entity was properly registered, had documented corporate formalities, and engaged in at least nominal commercial activity, it was generally treated as a genuine legal person entitled to the protections that flow from separate corporate personality.
That approach has shifted. Russian courts — particularly at the appellate and cassation levels — have moved towards a substance-over-form analysis that looks behind registration and formal corporate records. The inquiry now focuses on whether the entity in question exercised genuine economic independence, maintained its own management infrastructure, bore actual commercial risk, and engaged in transactions at arm's length with the Russian operating company below it. Where those criteria are not met, courts have shown a willingness to treat the intermediate structure as transparent — effectively attributing the Russian assets directly to the creditor's claim horizon.
For Turkish creditors, this development is double-edged. It creates a pathway to Russian assets that may previously have appeared unreachable behind an offshore holding layer. It also means that Russian courts are equally capable of applying the same substance-over-form lens to structures in which the Turkish creditor's own claim is mediated through an intermediate entity — a procedural posture that demands careful pre-litigation review.
If you are a Turkish creditor assessing your recovery options against Russian-held assets in a shell structure, make an enquiry: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76
The creditors most immediately affected by this shift in Russian court practice fall into three broad categories.
The first is Turkish trade creditors holding overdue receivables from Russian counterparties — typically in sectors where bilateral trade volumes have been highest: construction materials, textiles, agricultural inputs, and light manufacturing. Where the Russian debtor has interposed a holding structure between itself and its operating assets, the 2026 doctrinal shift creates an opportunity to pierce that layer in enforcement proceedings, provided the creditor can adduce evidence of the structure's non-commercial purpose.
The second category is Turkish investors or joint venture partners who entered Russian arrangements using intermediate holding vehicles — often Cyprus, BVI, or UAE-registered entities — as the nominal party to the Russian investment agreement. Where the relationship has broken down and the Turkish party is seeking to enforce contractual rights or recover a capital contribution, the unwinding of the shell structure becomes a threshold question in any Russian proceedings. Courts are now more receptive to arguments that the intermediary was merely an instrument of convenience rather than a genuine party.
The third, and most complex, category comprises Turkish creditors involved in insolvency proceedings where a Russian debtor has already filed. Under Russian insolvency legislation, the administrator's power to challenge and unwind transactions entered into within prescribed look-back periods is well established. What 2026 practice clarifies is that this unwinding power extends with increasing confidence to transactions structured through intermediate entities — meaning that a Russian insolvency administrator may now more readily unwind asset transfers that passed through an offshore shell before they left the Russian debtor's economic orbit.
"[Quote]" — Elizaveta Razina, Senior Lawyer, Practice Lead — IP Enforcement & Asset Protection, Vetrov & Partners
Turkish creditors who delay initiating recovery action risk finding that the Russian insolvency administrator's unwinding claims have already consumed the assets they intended to reach — a scenario that Russian courts have shown they will countenance even where the Turkish creditor holds a prior contractual entitlement.
The 2026 development does not render recovery straightforward — it removes one significant doctrinal obstacle while introducing others. A creditor who proceeds without careful pre-litigation analysis of the specific structure in question risks challenging an intermediate entity that turns out to have sufficient economic substance to survive scrutiny, or pursuing a Russian claim that prejudices parallel enforcement in another jurisdiction.
The practical steps for Turkish creditors at this stage are as follows.
First, conduct a structured asset and corporate tracing review covering all entities between the Turkish creditor's claim and the Russian-located assets. This requires gathering corporate registry records, beneficial ownership data where available, and — critically — evidence of actual economic activity at each corporate level. The substance-over-form analysis adopted by Russian courts is only as useful as the evidence the creditor can place before the court.
Second, assess the insolvency risk of the Russian operating entity before committing to an enforcement strategy. If the Russian debtor is already technically insolvent or is likely to file within the relevant look-back period, the creditor's most effective route may be through the insolvency proceeding rather than independent enforcement — particularly given the administrator's augmented unwinding powers. See the firm's analysis at Unwinding shell company structures with Russian elements — practitioner briefing and the comparative analysis at Comparative analysis: unwinding shell company structures — jurisdictional approaches.
Third, consider whether any interim preservation measure is available in Russia or in a third jurisdiction that can freeze assets at the Russian operating level pending full proceedings. Russian courts can, in appropriate circumstances, grant interim relief in connection with pending claims — a step that becomes increasingly important as the 2026 practice developments make the doctrinal pathway clearer but the asset recovery timeline longer.
For Turkish creditors navigating this landscape, early instruction of Russian counsel with asset tracing and recovery experience is the precondition for any of these steps to be effective. The firm's Asset Tracing & Recovery practice handles cross-border mandates of this nature, with direct partner involvement from instruction through to enforcement. Matters involving related insolvency questions are handled in coordination with the firm's Restructuring & Insolvency team. For a record of representative engagements, see the firm's Matters page.
To discuss a recovery matter involving shell structures and Russian-held assets, make an enquiry: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76
Q: What specifically changed in Russian courts' approach to unwinding shell structures in 2026?
A: Russian courts entering 2026 have adopted a more pronounced substance-over-form methodology when assessing intermediate holding entities. Where previously courts largely deferred to formal corporate registration and nominal commercial activity as evidence of genuine legal personality, appellate and cassation practice now applies a structured inquiry into whether the entity exercised genuine economic independence — its own management, commercial risk-bearing, and arm's length dealings with the underlying Russian operating company. Where that test is not met, courts have shown increasing willingness to treat the intermediate structure as transparent, enabling creditors to assert claims directly against the Russian-held assets beneath it. This shift does not make recovery automatic, but it removes a doctrinal barrier that previously frustrated well-founded creditor claims.
Q: Which Turkish creditors are most directly affected by the 2026 developments?
A: Three groups face the most immediate practical implications. Turkish trade creditors with overdue receivables from Russian counterparties — particularly in construction, textiles, agriculture, and manufacturing — who have encountered offshore or intermediate holding structures when attempting enforcement. Turkish investors or joint venture partners seeking to recover capital contributions or enforce contractual rights where the arrangement used an intermediate vehicle as the nominal Russian counterparty. And Turkish creditors involved in Russian insolvency proceedings, where the administrator's transaction-unwinding powers have been applied with greater confidence to transfers structured through intermediate shells. All three groups should treat the 2026 shift as an opening to reassess previously abandoned or deprioritised recovery positions.
Q: What practical steps should Turkish creditors take now?
A: Three steps have the greatest practical value at this stage. First, commission a structured asset and corporate tracing review to map all entities between the creditor's claim and the Russian-located assets — including gathering evidence of actual economic activity at each corporate level, since Russian courts now require substantive evidence, not merely structural diagrams. Second, assess the Russian debtor's insolvency risk before committing to a strategy, since the administrator's unwinding powers in an insolvency may operate in parallel with or in competition with the creditor's independent claim. Third, explore interim preservation measures — in Russia or in a third jurisdiction — to protect assets during the potentially extended timeline that enforcement through the new doctrinal pathway entails. Early instruction of Russian counsel is the prerequisite for all three steps.
Vetrov & Partners is a Russian boutique law firm established in 2009, recognised by Pravo-300 — Russia's principal legal directory — for eight consecutive years, and listed as a trusted adviser by the German Consulate General in Novosibirsk.
The firm's Asset Tracing & Recovery practice advises foreign creditors — including Turkish trade creditors, institutional investors, and joint venture partners — on locating, preserving, and recovering assets held through Russian entities and intermediate offshore structures. Working closely with the firm's Restructuring & Insolvency team, the practice has handled cross-border recovery mandates across the Siberian, Ural, and Central federal districts, with direct partner involvement at every stage.
Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom
This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.
— Elizaveta Razina Senior Lawyer, Practice Lead — IP Enforcement & Asset Protection, Vetrov & Partners vetrovpartners.com/razina/