News (#12 December 2019)

Cases

Company of UkrBud group got AMCU to cancel 127 million fine imposed for collusion

The Commercial Court of Kyiv has cancelled fines running to UAH 127.45 million imposed by the Antimonopoly Committee on North Ukrainian Construction Alliance for its collusion with Spetsbud-Plus in relation to three construction tenders.

The circumstances of holding the tenders by the public utility provider Golosiyevo-budinvest and SE Amosov National Institute of Cardiovascular Surgery, following which North Ukrainian Construction Alliance won contracts worth UAH 2.74 billion, were reviewed in the judicial decision.

Having considered the legitimacy of the AMCU decision of 19 June on the said distortion of tenders, the judge rejected the regulators evidence.

The court ruled that membership of North Ukrainian Construction Alliance and Spetsbud-Plus in the UkrBud Corporation cannot be deemed as interaction and cooperation of companies, since entry into the corporation is a right of business entities for creating the association.

The court also found no cause and effect relations in provision of reimbursable financial assistance by one company to another one, given that it was the right of the relevant economic entity.

Moreover, the court rejected the argument filed by the AMCU that the companies actually operate at the same address, as it was a multi-storey building where the companies were located on different floors.

In addition, according to information in the state register, the companies-defendants have different directors, founders and different legal addresses.

The court rejected the argument filed by the AMCU that companies use common means of communication and control each others accounts, since the state register contains company pages with different contact numbers thereon.

The court also disagreed with the argument that the companies had the same employees and interacted through related parties, since the said was not prohibited by the applicable law.

The AMCU also found that the companies received bank guarantees from JSCCB Globus for taking part in the tender on the same day, and the registration numbers of these guarantees were sequential, but the court ruled that none of the companies could have influence over numbers attributed to documents by the bank following receipt of the application by the latter.

The North Ukrainian Construction Alliance asked the court to invalidate the AMCU decision in full both in the part relating directly to the company and in the part relating its competitor at the disputed tender Spetsbud-Plus LLC.

However, the court upheld the claim only partially by declaring invalid the part of the decision related to the plaintiffs liability.

Court rejected claim filed by Privatbank against Dniproavia

The Supreme Court refused to uphold the cassation appeal filed by state-owned Privatbank and refused to uphold the banks credit claims worth UAH 1.5 billion against Dniproavia owned by Ihor Kolomoiskys Privat Group.

According to court documents, Privatbank requirements included remuneration and penalties for a number of loan agreements in the period of 2011-2014.

The Supreme Court rejected these on the basis of its own rulings, declaring relevant agreements invalid in part, which had been adopted, including in view of the fulfillment of the principal debt obligation by the guarantor of the borrower.

The court also emphasized that the payment of the remuneration (fee) in the manner and amount set in the disputed agreement did not meet reasonable and equitable requirements.

The bankruptcy case related to Dniproavia was initiated by Ukrtatnafta (an enterprise that is also controlled by Kolomoiskys Privat Group).

Supreme Court sided with Supreme Court removes ban on sale of Prominvestbank

The Supreme Court of Ukraine has refused to uphold the cassation appeals brought by VEB.RF (Vnesheconombank), a Russian state-owned corporation, and its Ukrainian subsidiary, Prominvestbank.

In its claim, VEB. RF requests that judicial authorities withdraw seizure of a 99.77% stake in Prominvestbank, imposed by a regulation of the state enforcement officer in May 2019 as part of the implementation of the Hague Arbitration Court ruling of 2 May 2018 to recover USD 139 million (plus USD 20 million) from Russia, represented by the Ministry of Justice of the Russian Federation, for the benefit of a number of Privatbank-related companies as remuneration for immovable property expropriated from Privatbank-related entities in Crimea after the latter was annexed by Russia in 2014.

It was planned to hold the second auction to sell a 99.77% stake in Prominvestbank shares on the PFTS Stock Exchange on 20 September 2019.

The first auction, which was planned for 28 August 2019, with a starting price of UAH 532 million, did not take place either. The PFTS Stock Exchange said that it received no bids to acquire Prominvestbank. VEB. RF then claimed that the Arbitration Institute of the Stockholm Chamber of Commerce banned Ukraine from selling shares in Prominvestbank (so far VEB. RF has asked the Ukrainian courts to recognize the mentioned arbitration award).

On 20 September 2019 VEB. RF stated that the Supreme Court of Ukraine banned the forced sale of Prominvestbank shares. VEB. RF noted that following the decision of the Supreme Court, the new auction for the sale of Prominvestbank shares cannot be held legally until consideration of the dispute per se.

The Russian state corporation meant the decision of the Supreme Court of 16 September 2019, which suspended the above-mentioned decision of the Kyiv Court of Appeal of 27 September 2019 and thus renewed the ban on the sale of a 99.77% stake in Prominvestbank, which was introduced by the resolution of Pechersky District Court Kyiv adopted on 24 July 2019.

At the same time, by its ruling of 6 November 2019, the Supreme Court renewed the ruling of the Kyiv Court of Appeal of 27 August 2019 and, in so doing, lifted the ban on the sale of a 99.77% share stake in Prominvestbank.

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