Ukraine in international courts: refuse not pay

Visa-free access to the Schengen Area has been Ukraine’s only international achievement so far. The rest is failure - for more and more international courts have been passing anti-Ukrainian verdicts of late. Let’s examine the details.

Ukraine vs commercial structures

On Nov 29, 2016, the Court of Appeal of Paris obliged Ukraine to pay $144mn to Tatneft of Russia for having violated the Russian-Ukrainian agreement on encouragement and mutual protection of investments and for having deprived Tatneft of its stake in the Kremenchug oil refinery.

Ukraine refused to pay the sum and Tatneft asked the United States District Court for the District of Columbia to force Ukraine to do it. Later, the Russian company filed similar appeals to courts in Moscow and London.

On July 25, 2016, the Arbitration Institute of the Stockholm Chamber of Commerce ruled that the Odessa Port Plant should pay $251.2mn to Dmitry Firtash’s Ostchem Holding Limited for its overdue gas debt. In Mar 2017, a court in Odessa satisfied Ostchem’s claim thereby confirming the Stockholm court’s verdict.

Later, the State Property Fund of Ukraine appealed against that verdict to the High Specialized Court on Civil and Criminal Cases. But Ukraine is member of the New York convention and has no right to refuse to fulfill an international arbitration verdict. So, sooner or later, it will have to pay.

A few days ago, the holders of the Eurobonds of PrivatBank, a nationalized Ukrainian bank where the key beneficiary of Ihor Kolomoisky, appealed to the London Court of International Arbitration against the verdict to exchange their bonds for the bank’s additional shares. The claimants have quite good chances to win this case as PrivatBank’s losses – the key official ground for its nationalization in late 2016 – have not been confirmed by Ernst&Young.

Ukraine vs Russia

In late Mar, London’s High Court obliged Ukraine to repay $3bn plus interest lent by Russia in Dec 2013. The court dismissed the argument that it was “a bribe paid to Viktor Yanukovych for his refusal to integrate into Europe.” Ukraine’s Finance Minister Oleksandr Danyliuk, who at that time was Yanukovych’s economic reform advisor, says that on June 10, Ukraine will appeal against London’s High Court’s verdict. The tactics of the Ukrainian regime – consisting mostly of people with the mentality of time servers – are to expend time, to fill pockets with as much money as possible and to shift problems onto successors.

But the biggest failure was the UN International Court of Justice’s verdict on Ukraine’s claim against Russia concerning the application of the International Convention for the Suppression of the Financing of Terrorism (for supporting Donbass and having allegedly shot down the Malaysian Boeing) and the International Convention on the Elimination of All Forms of Racial Discrimination (for allegedly violating the rights of Crimean Tatars and Ukrainians).

President of the Court Ronny Abraham said that Ukraine’s arguments were not strong enough. And the most paradoxical thing is that no single Ukrainian court has so far satisfied the Kiev regime’s petition to recognize the Donetsk and Lugansk people’s republics as terrorist organizations.

The only foothold for Ukraine here is that the UN Court has obliged Russia to observe the rights of Crimean Tatars, to respect their organizations (including their Mejlis, an organization banned in Russia) and to guarantee teaching in Ukrainian in Crimea. As you may know, the devil is in the details: the point here is that by urging Russia to respect the rights of Crimean Tatars and Ukrainians the UN Court has de facto recognized its jurisdiction in Crimea.

On June 30, the Arbitration Institute of the Stockholm Chamber of Commerce is to pass a verdict on Naftogaz-Gazprom mutual claims concerning the contract signed in 2009. The total sum of the claims is $60bn. According to Naftogaz’s Commercial Manager Yuri Vitrenko, if Naftogaz loses the case, it will have to sell its assets, including its gas production license and its fuel stock, while the Ukrainians may face a new rise in tariffs and even gas shortages. As of Sept 2016, Naftogaz had already spent 14.5mn EUR on its Norwegian lawyers.

Ukraine vs Yanukovych’s team

In Aug 2014, Petro Poroshenko said that there were 27 former Ukrainian government officials on Interpol’s wanted list. Today, that list contains no single Ukrainian name. In Mar 2017, Interpol removed from its list Viktor Yanukovych, his son Oleksandr, former Secretary of the Security Council Andriy Klyuyev, former Energy Minister Eduard Stavitsky, former Head of the National Bank Serhiy Arbuzov and former MP Oleksandr Onychenko.

The problem is that the office of Prosecutor General Yuri Lutsenko has so far presented no serious arguments to prove the guilt of Yanukovych and his team and thereby has proved the illegitimacy of the current Kiev regime.

In Oct 2016, the European Court of Justice ruled that Ukraine had to pay Yanukovych and his son 6.3mn UAH as compensation for the money they had spent in court in order to dispute the EU’s sanctions. The Court admitted that the EU’s sanctions were groundless. But later, in Mar 2017, the EU Council prolonged the sanctions thereby giving the Kiev regime a pretext to refuse to pay the compensation.

Ukraine vs ECHR

Ukraine is the anti-leader in terms of the number of claims filed against it to the European Court of Human Rights. No surprise that the candidate for Ukraine’s ombudsman Andriy Mamalyga admits that his country has one of the poorest human rights situations in Europe.

As of Dec 31, 2016, there were 18,131 claims filed against Ukraine to the European Court of Human Rights (including 3,900 claims filed by people displaced from Donbass). That accounted for 22.8% of all the Court’s cases. A year before, Ukraine was also in the lead with 13,900 claims or 21.4% of all claims.

In 2016, the European Court of Human Rights obliged Ukraine to pay 1.2mn EUR in compensation. But the Kiev regime is reluctant to pay. As a result, each fifth unpaid verdict of the Court is an anti-Ukrainian verdict.

Summary

The incompetence and the legal nihilism of the Ukrainian authorities have already become a proverbial story. Today, Ukraine’s major problem is that it is ruled by kleptomaniacs. So, sooner or later, the country will face a bankruptcy – no matter how many claims against Russia and Gazprom its current regime is still going to lay.

Igor Federovsky, Kiev