Category: Ukraine

Integrites has successfully defended the interests of Farmak Public Joint Stock Company in a case involving LLC Pharmhim’s partial refusal to supply Mebhydrolin, a medical substance that was actively used by PJSC Farmak to produce the pharmaceutical product Diazolin.

Integrites demonstrated to the Ukrainian Anti-Monopoly Committee that, because the Mebhydrolin could not be replaced with any other medical substance for the production of Diazolin, Pharmhim’s refusal to supply the drug constituted an abuse of its monopoly position. “In addition,” according to Integrites, “we calculated the amount of losses caused by the anticompetitive actions of LLC Pharmhim.” As a result, on August 16, 2018, the Antimonopoly Committee of Ukraine imposed a fine on LLC Pharmhim.

Integrites describes the case as “absolutely unique because the Antimonopoly Committee of Ukraine … for the first time has conducted such an investigation of the abusive actions committed by the monopolist.”

The Integrites team consisted of Senior Partner Vyacheslav Korchev, Counsel Serhiy Shershun, and Associate Bohdan Ilchenko.

Asters has acted as local Ukrainian counsel and Quinn Emanuel Urquhart & Sullivan has acted as lead counsel to JSC Oschadbank, one of the largest financial institutions in Ukraine, in connection with its successful claim against the Russian Federation for recovery of compensation as a result of the total loss of its investments in Crimea.

The hearing was held in Paris in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law of 1976 and the Agreement between the Cabinet of Ministers and the Government of the Russian Federation on the promotion and mutual protection of investments. On November 26, 2018, the Arbitration Court awarded Oschadbank USD 1.3 billion plus interest, which will accrue from the moment the decision is made until the moment of actual compensation.

According to article 32 of the Arbitration Rules of the United Nations Commission on International Trade Law of 1976, the arbitral decision is final and binding on the parties.

According to Asters, “this award [represents] the first victory of a Ukrainian state-owned company in a matter concerning restoration of Crimea-related rights and interests through an international investment protection mechanism.”

Asters’ team included Partner Svitlana Chepurna and Senior Associates Anna Tkachova and Maryna Golovko, all working under the general supervision of firm Co-Managing Partner Oleksiy Didkovskiy.

Avellum acted as Ukrainian legal counsel to the EBRD in connection with a senior secured loan of up to EUR 1.3 million to the Kyiv Medical University.

The loan will be used by KMU to expand its dentistry and pharmacy education programs through the acquisition of a new campus building, which will accommodate additional 1,000 students per year. The loan is the first from the EBRD to an academic institution in Ukraine.

KMU is one of the largest Ukrainian private universities and the only private medical university of such a large scale (approximately 2,700 students, with 30% being foreign, from 56 countries). The primary fields of specialization for KMU are dentistry and pharmacy, taught in Ukrainian, Russian, and English. According to Avellum, “KMU is recognized as a medical academic institution by the World Health Organization, and it is listed in the World Directory of Medical Schools, IMED, and Avicenna Database.

Since the start of the EBRD’s operations in Ukraine in 1993, it has made a cumulative commitment of almost EUR 12.1 billion across some 400 projects in the country.

The Avellum team was led by Senior Partner Glib Bondar, with support from Counsel Maria Tsabal and Junior Attorney Anna Kalabska.

Former DLA Piper Head of Tax Svitlana Musienko has joined Sayenko Kharenko in Kyiv.

According to Sayenko Kharenko, Musienko “brings 20 years of professional experience advising major international companies and the largest Ukrainian business groups on domestic and international tax planning, transfer pricing, tax issues, corporate law, and investment structuring.”

After graduating from Kiev National Economics University in 1998, Musienko worked for four years at Arthur Anderson and then another four years at Ernst & Young. In October of 2006 she joined DLA Piper as Partner and Head of Tax, before leaving that firm in March of 2017.

Partner Vladimir Sayenko welcomed Musienko to the team: “We are proud to welcome Svitlana on board. She is a recognized expert in Ukrainian tax law with many years of experience leading the tax practice at a multinational law firm. We have no doubt that under Svitlana’s supervision our tax practice will continue to develop into a true market leader.”

Dentons has advised DTEK Renewables B.V. on the signing of a contract with General Electric regarding the supply of 26 modern wind turbines for the second phase of the Prymorska wind farm in Ukraine.

The additional equipment doubles Prymorska’s generating capacity to the 200 MW, and the total sum of investments is estimated at EUR 150 million.

According to Dentons, “within the project General Electric will create a full-fledged service department which will specialize in the maintenance of wind farms in Ukraine. The companies also signed long-term agreements on wind turbines maintenance for a period of up to 20 years.”

Dentons cross-border team was led by Kyiv Partner Adam Mycyk and Counsel Maksym Sysoiev and included Istanbul Partner Ian McGrath, Berlin Partner Thomas Schubert, Amsterdam Partner Marcel Janssen, Counsel David Shearer and Associate Gerard Koster.

Sayenko Kharenko has advised Industria Veneta Lavorazione Elettrodomestici S.p.A. on the application of agency agreements in Ukraine.

Sayenko Kharenko’s team advised on legal regulations governing agency relations in Ukraine and on the enforceability of the draft agency agreement to be concluded with the Ukrainian agent under Ukrainian law.

Founded in 1969, Industria Lavorazione Veneta Elettrodomestici’s line of business includes the manufacturing of household electric and nonelectric cooking equipment.

Sayenko Kharenko’s team was led by Partner Anzhela Makhinova and included Associate Victoriia Mykuliak.

PwC Legal Ukraine and Linklaters have advised Guala Closures S.p.A. on the issue of bonds for EUR 455 million, maturing in 2024 and listed on the Luxembourg Stock Exchange. Latham & Watkins assisted Credit Suisse, Banca IMI, Barclays, UniCredit, Banca Akros, and KKR Capital Markets on the deal.

PwC Legal Ukraine assisted on Ukrainian-law related matters, while Linklaters was the lead legal advisor to Guala Closures on the bonds issue.  

Guala Closures is an Italian-based multinational producer of non-refillable and aluminum closures for spirits, beverages, food, and pharmaceuticals. The company operates in five continents with 25 production facilities and a commercial structure present in more than 100 countries, including Ukraine.

The PwC Legal Ukraine team was led by Head of Transactions Oleksandra Kostrytsia under the supervision of Partner Alexey Katasonov. The team included Senior Associates Artur Chepenko and Nadiya Nazarchuk.

Linklaters’ team consisted of London-based Partner Mark Hageman and Associates Patrick McKeown and Thomas Killeen, Milan-based Managing Partner Andrea Arosio, Partners Mauro Messi and Roberto Gianelli, Counsels Linda Taylor and Ugo Orsini, Senior Associate Cesare Silvani, Managing Associate Diego Esposito, Associates Marco Carrieri and Francesco Eugenio Pasello, and Trainees Laura Tarenzi, Filippo Azzano, and Filippo Nola.

The Latham & Watkins team included Milan-based Partners Jeffrey Lawlis, Marcello Bragliani, and Antonio Coletti, and Associates Joseph Nance, Cesare Milani, Alessia De Coppi, Guido Bartolomei, Erika Brini Raimondi, and Camillo Di Donato; London-based Partner Mohamed Nurmohamed and Associates Manoj Bhundia and Siobhan Kennedy; and Paris-based Associate Roberto Reyes Gaskin.

Editor’s Note: After this article was published Redcliffe Partners informed CEE Legal Matters that it had assisted Latham & Watkins with Ukrainian law issues. The firm’s team consisted of Associates Evgeniy Vazhynskiy and Olesia Mykhailenko and Junior Associate Eduard Olentsevych.

Sayenko Kharenko has acted as Ukrainian legal counsel to BNP Paribas, Goldman Sachs, Citigroup, and J.P. Morgan Securities on Ukraine’s USD 2 billion Eurobond issue. Avellum advised the Ministry of Finance of Ukraine on the issue.

The issue consists of USD 750 million notes due 2024 and USD 1.25 billion notes due 2028. Sayenko Kharenko reports that a share of proceeds of the new issue has been used by Ukraine to redeem its USD 725 million zero coupon notes issued for the purposes of bridge financing earlier in 2018, while the remaining funds will be applied for general budgetary purposes of the sovereign.

According to Sayenko Kharenko, “the issue took place on the back of prolonged negotiations between Ukraine and IMF and gives a positive signal that international capital markets are still open for the Ukrainian debt.”

The Sayenko Kharenko team was led by Partner Nazar Chernyavsky and Counsel Igor Lozenko and included Associates Denis Nakonechnyi and Yurii Dmytrenko and Junior Associates Oles Trachuk and Vira Pankiv.

The Avellum team was led by Senior Partner Glib Bondar with support from Counsel Taras Dmukhovskyy, Tax Counsel Vadim Medvedev, and Associates Oleg Krainskyi, Anastasiya Voronova, Orest Franchuk, Anna Mykhalova, Anna Kalabska, Yelyzaveta Kravtsova, and Oles Bidnoshyia.

Editor’s Note: This article was updated to include information about Avellum’s involvement.

“Elections will definitely effect society,” says Avellum Co-Managing Partner Aminat Suleymanova, referring to the upcoming Ukraine Presidential elections scheduled for March 31, 2019, and Parliamentary elections scheduled for October 27, 2019.

However, she insists, “the direction of the country will remain the same — I don’t think the direction would shift to the Russian side. The European choice made by the nation will be upheld, not be changed.” 

Suleymanova believes the “negative spirit” that she describes as settling upon her country for many years leading up to its two recent revolutions — the 2004 Orange Revolution and 2014 Ukrainian Revolution — is a thing of the past, and that a stable optimism has replaced it. Such stability, she says, pervades the business and legal markets as well. “There might be some conflict around and during the elections,” she concedes, “and our clients are waiting for the outcome of the elections, but I do not see how it might influence our business right now.”

In the meantime, Ukraine’s judicial system continues to undergo what Suleymanova describes as “historical changes.” According to her, “earlier this year the new Supreme Court of Ukraine started its operations, and the new Economic Procedural Code, the Civil Procedure Code, and the Code of Administrative Proceedings were introduced and implemented step by step throughout 2018.” The new rules set out in the Procedural Codes, she reports, mean “much fewer possibilities to mislead the court or prolong the trial just as a main strategy.”

According to Suleymanova, the new codes represent an attempt to implement the procedural rules used in the common law jurisdictions. “From now on only those who are certified as advocates are allowed to represent clients in court,” she says, describing this as “a proper development,” because “a lawyer has to be more responsible and not everybody should be allowed to represent individuals and legal entities in the court. It is justice and it is serious.”

With this new development, Aminat Suleymanova expects further improvements to the fair trial system in Ukraine that will reflect the steady legal systems of longer-established democracies. “Previously, the idea of a fair trial in Ukraine was declared but never fully implemented,” she says. “Some of the courts were lacking clarity and transparency, and there was a clear scarcity of professional judges. Thus, my major expectation is that the introduction of the new Procedural Codes would demonstrate that we are capable of developing a system of truly fair and professional trials in Ukraine.”