Cases

56% stake in Motor Sich seized

The Security Service of Ukraine suspects the honorary director of Zaporizhia Motor Sich enterprise and MP, Vyacheslav Boguslayev, of illegally selling a 56% shareholding in the company to Chinese investors affiliated with Beijing Skyrizon Aviation Industry Investment Co., Ltd. It is investigating the case under part 1 Article 14 (Preparation for crime), Article 113 (Sabotage) of the Criminal Code of Ukraine.

According to the court decision, on 6 April 2016 Motor Sich received USD 100 million at 0.3% per annum from Skyrizon Aircraft Holdings Limited under a loan agreement of 29 January 2016 concluded with the Chinese company Beijing Skyrizon Aviation Industry Investment Co Ltd.

In September the Shevchenko District Court of Kiev arrested Motor Sich shares, which are on balance of the accounts of JV LLC Dragon Capital and belong to the following companies: Skyrizon Aircraft Holdings Limited, Business House Helena, Enfields Trade & Capital Corp, Waldo Trade Ltd, Granum Corporation.

The investigators found that Mr. Boguslayev (whose name is not mentioned in the register, but who is obviously referred to in it) sold a majority shareholding to foreign companies. At the same time, Mr. Boguslayev “was well aware of the fact that Motor Sich JSC was the only Ukrainian enterprise that produced aircraft engines, including ones for military use”, and was aware of the possibility of weakening the state as a result of sale in shares and the transfer of manufacturing abroad.

The court seized the 56% stake in Motor Sich sold to the Chinese. Beijing Skyrizon Aviation Industry Investment owns 100% of the authorized capital of Hong Kong Skyrizon Holding Limited (Hong Kong), which in its turn owns 100% of the authorized capital of Skyrizon Aircraft Holdings Limited.

 

Google appeals against fine imposed by European Commission

Google has lodged an appeal to the European Court of Justice on the decision of the European Commission with regard to imposition of a fine in the amount of EUR 2.42 billion.

In June the European Commission fined Google for abuse of its position, giving preference to its own shopping comparison service.

The company was supposed to stop such activity within 90 days or pay penalties in the amount of up to 5% of the average daily turnover of Alphabet, Google’s parent company. Google is also named in two other antitrust cases of the European Commission. Last year, the company was accused of using the dominant Android mobile operating system to drive out its competitors.

 

Court to review fine imposed on Intel

The European Union Court has declared that a court of lower jurisdiction should review a decision on a fine in the amount of USD 1.16 billion imposed by the European Commission on Intel, the American chips manufacturer.

In 2009 the European Commission imposed a fine of USD 1.16 billion on Intel, declaring that the company offered its customers discounts on computers, in which its own chips were used, but not with chips of its competitor AMD.

Intel then lodged an appeal to the General Court, but lost the case in 2014.

The court transferred the case to the General Court so that it determines whether such discounts could limit competition, taking into account the arguments put forward by Intel.

If the final decision is made in favor of Intel, it will be a rare defeat for the European Commission, which has not lost major antitrust cases for decades.

The decision could give hope to other American technology firms like Google and Qualcomm, which are involved in EU antitrust cases at the present time.

 

Myronivsky Hliboproduct won case against German TV channel

In June 2017 a German TV channel published a story about the activities of MHP enterprises, namely, of the Vinnytsia Poultry Farm and MHP Zernoproduct.
The information published in the story did not correspond to the facts, about which the TV channel was informed by MHP representatives.

The company demanded that broadcasting of the program be halted. The program included the mentioned story, and it also demanded removal of information from the site through the publication of a formal denial.

When the TV channel refused to comply with these requirements, MHP representatives in Germany filed a lawsuit with the Civil Court of Hamburg. During the trial, it was discovered that the TV channel made public false information, which violated two articles of the German Civil Code.
The court ordered the TV channel to remove the published information, to halt the story’s broadcasting on-air and on the site, and also to refute false information about MHP. The TV channel abided by the court’s decision in its entirety.

 

Naftogaz filed lawsuit against Russia in The Hague

NJSC Naftogaz of Ukraine and its six subsidiary companies have filed a lawsuit with the Tribunal established in the Permanent Court of Arbitration in The Hague with a demand to reimburse losses caused by the unlawful seizure of its group assets in the Autonomous Republic of Crimea by the Russian Federation.

The six subsidiary companies-plaintiffs are SJSC  Chornomorneftegaz, PJSC Ukrtransgaz, SE Likvo, PJSC UkrGasVydobuvannya, PJSC Ukrtransnafta and
SE Gas of Ukraine.

In October 2016, Naftogaz and companies that make up the group initiated the mentioned arbitration in accordance with the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the promotion and mutual protection of investments, which is more widely known as the Russian-Ukrainian bilateral investment agreement.

To ensure protection of the rights and interests of the group in this process, Naftogaz enlisted the international law firm
Covington & Burling LLP, which has significant positive experience in protecting the interests of clients in proceedings against the Russian Federation and Russian state-owned companies. In particular, the company represented the interests of investors of the oil company YUKOS in a dispute against the Russian Federation and reached a court decision on reimbursement in the amount of USD 60 billion.

On 15 February 2016, the Russian Federation was formally notified in writing by NJSC Naftogaz of Ukraine, SJSC Chornomorneftegaz, PJSC Ukrtransgaz, SE Likvo, PJSC UkrGasVydobuvannya, PJSC Ukrtransnafta and SE Gas of Ukraine on the investment dispute within the framework of the bilateral agreement on mutual protection of investments between Ukraine and Russia.

The reason for this dispute is the illegal expropriation of Naftogaz group investments in Crimea by the Russian Federation. Arbitration proceedings started on 17 October  2016. The case is being considered by the Permanent Court of Arbitration at The Hague, which is also known as the International Court of Justice.

 

Russian airline fined for flights to Crimea

A Ukrainian court has ruled to collect a fine in the amount of more than
UAH 10 million from a Russian airline, which illegally performed flights to occupied Crimea.

The offending airline, whose name is being kept a secret, did not pay for air navigation services received in the airspace over the Black Sea within the Simferopol district.

Judicial bodies of the Russian Federation were also involved in the consideration of this case. Thus, the Moscow Arbitration Court executed the letter of request of the Ukrainian court and handed the defendant a copy of the ruling on the beginning of legal proceedings and the prosecutor’s statement of claim.

 

Transparency International filed suit against Prosecutor’s Office

The Ukrainian representative office of Transparency International has filed a lawsuit against the Prosecutor General’s Office, the Military Prosecutor’s Office for ATO forces and SE Information Judicial Systems demanding to make public the ruling under which funds of the Yanukovych criminal group totaling USD 1.5 billion were confiscated.

The TI Representative Office in Ukraine is demanding abolition of illegal decisions on the secrecy of this judgment.

SE Information Judicial Systems, which is obliged to make the judgment available in the public Unified Register of Judicial Decisions, has so far failed to do this. The enterprise refers to the prohibition established by the prosecution authorities. The organization claims that the Prosecutor’s-General’s Office recognized this judgment as a state secret.

Judicial hearings on the lawsuit against the Prosecutor General’s Office, the Military Prosecutor’s Office for ATO forces and SE Information Judicial Systems will be heard in a public court.

On 28 April 2017, the NSDC press service stated that Kramatorsk Court decided to confiscate to the benefit of the state budget USD 1.5 billion, frozen on the accounts of Yanukovych’s network.

In June the Military Prosecutor’s Office prohibited publication of this judgment prior to completion of pre-trial investigations in criminal proceedings.