DECISIONS OF THE INTERNATIONAL COMMERCIAL ARBITRATION COURT ON THE LEASE AGREEMENTS CONCERNING STOCKMANN’S DEPARTMENT STORE IN SMOLENSKY PASSAGE SHOPPING CENTRE IN MOSCOW CITY CENTRE

STOCKMANN plc
Company Announcement
5.5.2008 at 14.15

DECISIONS OF THE INTERNATIONAL COMMERCIAL ARBITRATION COURT ON THE LEASE
AGREEMENTS CONCERNING STOCKMANN’S DEPARTMENT STORE IN SMOLENSKY PASSAGE
SHOPPING CENTRE IN MOSCOW CITY CENTRE

Stockmann’s department store has operated in leased premises in the
Smolensky Passage shopping centre in Moscow city centre since 1998. The
lessors of Stockmann in the said shopping centre are Mostroiekonombank and
the company of Smolensky Passage shopping centre. Under the lease
agreements, the company has an option to extend the lease until 2018. In
accordance with the lease agreements, Stockmann has in 2006 informed the
lessors that it will exercise this option. The lessors have disputed the
existence of the option and Stockmann has, in accordance with the
agreements, submitted the matter to be decided by the International
Commercial Arbitration Court of Moscow (ICAC).

As regards the lease agreement with the company of Smolensky Passage
shopping centre covering approximately 90 per cent of the department
store’s premises, the Arbitration Court has confirmed that Stockmann has
the right to extend the lease agreement for another 10 years under the
terms and conditions of the lease agreement currently in force. The
Arbitration Court has obliged the company of Smolensky Passage shopping
centre to sign with Stockmann a new lease agreement that adheres to these
terms and conditions and can be registered in accordance with the
requirements of the Russian law. The new lease period will be from May 1,
2008, to April 30, 2018.

A different composition of the Arbitration Court found that Stockmann has
the option to another ten years of lease under the current terms and
conditions also regarding the lease agreement with Mostroiekonombank that
covers the remaining 10 per cent of the department store’s premises. In
deviation to the other decision, this decision refers to section 40 of the
Russian tax law according to which the Russian tax authorities have, in
exceptional cases, the right to require adjusting of the rate of rent
provided that it essentially differs from the market rate. One of the
three arbitrators deciding on the case submitted a dissenting opinion in
which it was held without any reference to the Russian tax law that the
lease agreement should be continued under the terms and conditions
currently in force. Hence, the Arbitration Court delivered two partly
different decisions on the materially similar questions.

In order to become enforceable, the decisions of the Arbitration Court
must further be confirmed by the general court of first instance of
Moscow.

Stockmann believes that the recently awarded decisions enable the
operation of the department store in the current premises in accordance
with the original intent of the lease agreements.

STOCKMANN plc

Hannu Penttilä
CEO

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