News (#07-08 July-August 2019)

Cases

Court of European Union adopted Resolution in Adidas case

TheGeneral Court of the European Union, which is part of the Court of Justice of the European Union,has refused to recognize the Adidas logo as a trademark, which is under the protection of EU Regulations. The issue here is the logo on footwear in the form of three parallel stripes facing any direction.

The court upheld the Resolution made by the European Union Intellectual Property Office (EUIPO), by which the registration of this trademark was canceled upon a request filed by the Belgian company Shoe Branding Europe BVBA in 2016. This authority stated that such an image did not allow the Adidas logo to be clearly distinguished from other similar images. Therefore, it did not allow the companys products to be distinguished from among other brands. Earlier, Adidas tried to oblige BVBA to change its shoe logo, which presented two parallel diagonal stripes, by claiming that it was too similar to the three-stripe Adidas logo.

Supreme Court refused to oblige PrivatBank to pay back NBU refinancing

On 11 June 2019, PrivatBank was successful in the proceedings under the claim filed by Erlan PJSC, which were held in the Grand Chamber of the Supreme Court.

Erlan PJSC, which was the affiliated entity of the former bank owners, tried to prove malevolent collusion and omission to act on the part of the NBU and state-owned PrivatBank, and to oblige the bank to redeem indebtedness to the regulator through legal proceedings, and thus to terminate the mortgage and clear the property transferred by the company to secure the fulfillment of debt service obligations by PrivatBank to the NBU.

However, the Grand Chamber of the Supreme Court refused to uphold the claim. It also issued several legal opinions important for the entire banking community.

Supreme Court permitted determining the salary of Ukrainians in foreign currency

When entering into a labor contract, the parties may determine the amount of salary in UAH and establish its equivalent in foreign currency, which does not contradict the Civil Code of Ukraine. The relevant decision was adopted by the panel of judges of the Third Court Chamber of the Civil Court of Cassation.

In its Resolution of 26 June it is stated that the law establishes the obligation to make payments on the territory of Ukraine in national currency, but it contains no prohibition to express monetary liabilities in foreign currency during their calculation or to use other calculation values.

In the case considered, in the first wording of the labor contract (acknowledged by the company) it is established that the amount of salary payable in UAH is calculated according to the euro exchange rate on the date of payment. Therefore, the salary of a companys Deputy Director must be the UAH equivalent of EUR 7,872 as of the date of payment.

The Supreme Court rejected as unjustified arguments set in the cassation appeal that fulfillment of the provisions of the supplementary agreement allegedly results in violation of the Tax Code by the company and obliges it to pay fines, since entering into a supplementary agreement has not affected the algorithm for the accounting of the Deputy Directors salary throughout the period of valid labor relations between the parties, the amount of the salary payable in UAH has been determined as per the euro exchange rate on the date of payment.

Ukrtelecom lost case worth UAH 1.5 billion to Oschadbank

State-owned Oschadbank has defended its position in the Supreme Court in a dispute with Ukrtelecom on termination of the agreement of sale and purchase of bonds, indebtedness under which amounted to almost UAH 1.5 billion.

On 15 September 2015, Ukrtelecom entered into the agreement with the bank, following which Oschadbank undertook to transfer the ownership of ESU LLC (owner of the controlling stake in Ukrtelecom) bonds series C in the amount of 1 million units at a price of UAH 1 billion, plus accrued coupon profit on bonds, to Ukrtelecom, and the latter to accept and to pay for them not later than 15 March 2017.

In August 2017, in order to avoid the fulfillment of its obligations under the agreement (payment of more than UAH 1 billion due to the bank), Ukrtelecom filed a claim to the CommercialCourtofKyivon termination of the agreement and recognizing the obligations in it as resolved.

Court allowed Oschadbank to get indemnification for its assets in Crimea

On 17 July the Kyiv Court of Appeal upheld the application filed by Oschadbank and allowed it to get indemnification for the damage caused by the Russian Federation, which confiscated the banks Crimean-based assets in the amount of USD 1.1 billion, plus interest.

The court resolution was made in the pursuance of the decision issued by the International Commercial Arbitration (Paris, France) to recover USD 1.1 billion from Russia (represented by the Ministry of Justice of the Russian Federation) as indemnification for the expropriation of Oschadbank assets in Crimea.

Moreover, the Kyiv Court of Appeal issued enforcement orders to collect interest from the Russian Federation as accrued from March 2014 until the full debt repayment by the Russian Federation (at a semi-annual LIBOR rate in USD plus 2% with annual capitalization).

Earlier, Oschadbank said that the arbitration decision in its dispute with Russia could be enforced in 154 states, and noted three possible methods:

recovery of Russian state property used for commercial purposes and, accordingly, having no special immunity;

through the replacement of the lender (in relations with foreign contracting parties, where Russia acts as a lender);

at the expense of state-owned companies property (as noted, the implementation of this approach is possible in the UK, USA, Canada, France, Sweden, and a number of other countries).

The Russian Federation may initiate a procedure for the abolition of the arbitration award issued.

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