Category: Ukraine

Antika Law Firm has successfully assisted Ukrainian insurance company Persha with its claim for reimbursement of legal fees from a previous dispute.

According to Antika, the Northern Economic Court of Appeal found its request reasonable and granted the claim. The firm reported that, “despite the fact that the number of court decisions on the reimbursement of costs for legal assistance is growing, it still largely depends on the judge’s discretion.”

Antika Law Firm’s team consisted of Partners Alexey Kot and Maxim Korchagin and Senior Associate Mykhailo Voitsekhovskyi.

Asters has advised Naftogaz Energoservice on the construction of a 33 megawatt solar power plant in Chudniv, Ukraine.

Financial details of the construction were not disclosed.

According to Asters, the solar power plant in Chudniv was commissioned in September 2020 and its construction is expected to reduce carbon dioxide emissions by at least 880,000 tons.

Naftogaz Energoservice is a subsidiary of NJSC Naftogaz, which is mainly focused on the extraction, transportation, and refinement of natural gas and crude oil.

The Asters team included Partner Yaroslav Petrov, Counsel Anzhelika Livitska, and Associate Olena Sichkovska.

An entity linked to Ukrainian oligarch Igor Kolomoisky has failed in an unusual attempt to halt the enforcement of a US$1.1 billion award against Russia – as it races to collect on its own treaty award compensating it for expropriated assets in Crimea.

On 10 November, the Supreme Court of Ukraine dismissed an appeal by IKB-Invest – an affiliate of Kolomoisky’s Privat Group – against the enforcement of an award in favour of Ukrainian state-owned bank Oschadbank.

IKB was part of a group of Ukrainian investors (led by Everest Estate) that won a US$159 million award against Russia in 2018 over the expropriation of real estate assets in Crimea following the annexation of the territory. Oschadbank won US$1.1 billion in a similar claim against Russia later that year over the loss of its banking operations on the peninsula.

Both awards have been enforced in Ukraine, with the Supreme Court upholding enforcement of IKB and its fellow investors’ award in February 2019 and the Kiev Court of Appeal enforcing Oschadbank’s award four months later. The Ukrainian assets of three Russian state-owned banks were attached at the request of the IKB claimants in 2018.

IKB applied in September to overturn the enforcement decision favouring Oschadbank, arguing that the Kiev Court of Appeal had erred in Ukrainian law. Fortuna, another of the investors in the Everest case, also applied to join the appeal.

However, the Supreme Court declined to rule on their merits of their claims, holding in its latest ruling that only parties to the arbitration can participate in set-aside or enforcement proceedings concerning an award.

It also refused to allow Fortuna to join the proceedings.

Counsel to IKB and Fortuna in the court action has not been disclosed. Oschadbank used Asters, which also advised the bank in the arbitration alongside Quinn Emanuel Urquhart & Sullivan. Russia was not represented.

Olena Perepelynska, head of international arbitration at Integrites in Ukraine, says IKB’s application was a “very unusual development” for an enforcement proceeding. She suggests IKB was seeking to eliminate Oschadbank from the joint enforcement proceedings to increase its share of any Russian assets attached in Ukraine.

Perepelynska says Oschadbank will be “entitled to collect the major portion of anything found by the bailiff,” as any assets attached will be distributed in proportion to the amount of the creditors’ respective awards.

While the Supreme Court took a “careful approach”, she says it departed from a general rule of civil procedure granting a right of appeal to any third party whose rights are somehow infringed by a judgment in a case in which it was not involved.

Perepelynska says the court “chose to apply a special rule for cases in arbitration-related court proceedings” by holding that only parties to an arbitration could participate.

Russia has faced various treaty claims from Ukrainian investors who lost assets in Crimea following the 2014 annexation. Russia chose not to participate in the initial wave of cases. Following a series of adverse awards, the state changed its strategy last year and is now using a co-counsel team that includes Russia’s Ivanyan & Partners, Swiss firm Schellenberg Wittmer and Dutch firm Houthoff.

The attachments issued by the Ukrainian courts at the request of the Crimea creditors led one of the targeted Russian banks, Vnesheconombank, to launch an investment treaty claim against Ukraine before the Stockholm Chamber of Commerce. In September, the Kiev Court of Appeal refused to enforce an SCC emergency award that restrained Ukraine from forcibly selling the bank’s assets.

Ukrainian media reports that an auction on 99% of the shares had already been carried out in March, with the buyers coming from Kolomoisky’s Privat Group.

By Olena Perepelynska, Partner, Integrites

Asters has successfully represented the Globus shopping center in a dispute with the Ukrainian tax authority, heard by the Sixth Administrative Court of Appeal in Kyiv.

Globus is a shopping center in Kyiv. It consists of two parts, Globus 1 and Globus 2, which cover an area of 36,400 square meters, featuring more than 200 shops and restaurants.

The dispute ensued after the tax authority demanded that the shopping center pay UAH 300 million in VAT and corporate profit tax adjustments. According to Asters, “the authority claimed that the company had to report income from discounting its loan payables, to amortize the discount, and to reimburse the VAT credit it had claimed in connection with advertising services.”

The court concluded that the claims of the tax authority were unfounded and ruled in favor of Globus.

Asters’s team included Partner Constantin Solyar and Associate Iryna Gordiyuk.

CMS has advised Discovery Life Sciences, a US-based bio-specimen, genomic sequencing, cell, and immunohistochemistry services firm, on its acquisition of East West Biopharma, a Ukraine-based human bio-specimen solutions organization.

According to CMS, “the acquisition builds on Discovery’s existing capability and creates the largest network of clinical collection sites in Europe, advancing its position as the global market leader in bio-specimen procurement.”

CMS’s team included Managing Partner Graham Conlon, Partners Tetyana Dovgan and Olga Belyakova, Counsels Olga Shenk and Kateryna Chechulina, Senior Associates Viktoriia Stavchuk, Nataliya Nakonechna, Vitalii Mainarovych, Mariana Saienko, and Orest Matviychuk, Associates Louise Cakar, Mykola Heletiy, Roman Hryshyn-Hryshchuk, Vladyslav Kurylko, and Glib Bukharin, Lawyers Ihor Pavliukov, Oleksandr Sytnyk, Sergiy Kulikov, Ivan Pshyk, Diana Pysarenko, and Olga Stetsenko, and Trainee Denys Hatseniuk.

CMS did not reply to our inquiry on the matter.

Aequo has successfully defended the rights of Ukraine’s Darnitsa pharmaceutical company to the shares of the Borshchahivskiy chemical-pharmaceutical plant in the Supreme Court of Ukraine. 

Darnitsa acquired 3,100 shares (29.95% of the charter capital) of the SIC Borshchahivskiy chemical-pharmaceutical plant from the Department of Kyiv Communal Property at a privatization auction on March 20, 2015.

According to Aequo, “on October 29, 2020, the Supreme Court granted the cassation appeal of Darnitsa and canceled the groundless resolution of the Northern Commercial Court of Appeal from August 25, 2020, concerning [the] acquisition of shares of the SIC Borshchahivskiy chemical-pharmaceutical plant by Darnitsa … and ultimately confirmed [the company’s] right to the shares.“

The Supreme Court’s decision is final and not subject to further appeal. “Earlier,” Aequo report, “the Supreme Court also confirmed the validity of the decision of the Antimonopoly Committee of Ukraine on granting Darnitsa merger clearance for its acquisition of the above-mentioned shares.”

Aequo’s team included Counsel Yevgen Levitskyi and Associate Oleksandr Zubrytskyi.

Sayenko Kharenko has advised the European Bank for Reconstruction and Development on its provision of a USD 100 million secured financing package to Novus.

Novus is a Ukrainian food retailer with a workforce of more than 5,500 employees.

According to Sayenko Kharenko, “the financing will facilitate the construction and refurbishment of more than 30 new Novus stores by the end of 2022.” The firm stated that the loan will almost double the total number of the retailer’s supermarkets across Ukraine and also be used to build the first green distribution center.

Sayenko Kharenko’s team consisted of Partner Igor Lozenko, Associates Denis Nakonechnyi, Vladyslava Mitsai, and Vira Pankiv, and Junior Associate Oleksandr Motin.

Eterna Law has helped the War Childhood Museum project open a museum in Ukraine.

According to Eterna Law, the space will represent the “world’s only museum exclusively focused on the experience of [children] affected by war.” According to the firm, “the mission of the War Childhood Museum is to continuously, and in accordance with the highest standards, document and digitize materials related to growing up [during] war, and to present the archived materials through various media channels in order to educate a broad audience about this experience.”

Eterna Law’s team included Partner Oksana Kneychuk and Associate Yuliya Zarichniuk.

Asters has advised the EBRD on its EUR 3.3 million loan to the Kormotech Group. 

Kormotech is a Ukrainian producer of pet food for cats and dogs. According to Asters the company exports its production to over 30 countries. The firm reported that “the loan is meant to provide working capital to Kormotech in response to the impact of COVID-19 and will support the Kormotech Group’s strategy to maintain and expand its operations in Ukraine and other countries.” 

Asters’ team consisted of Partner Iryna Pokanay, Counsel Gabriel Aslanian, and associates Inna Bondarenko and Viktoria Zagreba.

This transaction marks the EBRD’s second loan to Kormotech, following its EUR 10 million loan to the company in 2019, which Asters worked on as well (as reported by CEE Legal Matters on December 26, 2020). 

Ukraine local elections, held on October 25, 2020, resulted in a setback for the country’s President, Volodymyr Zelensky, whose party did not secure a single mayoral position in any of the major cities. This did not surprise Dmytro Fedoruk, Partner at Redcliffe Partners in Kyiv, who notes that Zelensky “was not elected for his experience, but rather for his good intentions.” 

Indeed, Fedoruk says, “[Zelensky] was put under a lot of pressure recently by certain Western donors, particularly the IMF, which are not very satisfied with Ukraine’s anti-corruption efforts.” According to Fedoruk, “the Constitutional Court of Ukraine recently held unconstitutional some of the provisions of the Law on Prevention of Corruption, which limited the National Anti-Corruption Bureau’s ability to fight, investigate, and pursue persons guilty of illicit enrichment.” And, he says, the unfavorable developments in the anti-corruption field “may cause the IMF to stop providing money to Ukraine.” 

Still, despite the mixed messages on corruption, not everyone is reluctant to invest in the country. In fact, Fedoruk reports that, “many foreign companies are interested in various forms of public-private partnership, such as Production Sharing Agreements and Concession Agreements with the government of Ukraine.” Should the contracts come to pass, he says, those companies are expected to invest “hundreds of millions of dollars into Ukrainian economy.” His own firm is closely involved in the process, he says, noting that “we are currently advising Aspect Energy and SigmaBleyzer, and also the Ukrainian-based UGV, on negotiating Production Sharing Agreements with the Ukrainian government.” 

Fedoruk concludes by referring to a growing trend in the Ukrainian legal market. “Some lawyers are resorting to freelance work,” he says. “That is fine for some projects, like drafting a simple contract, but you cannot handle a project meant for a team of fifteen lawyers with freelancers.”