10 July 2018
Delaying with recognition of the Stockholm Arbitration decision on Odessa Portside Plant debt to Ostchem, Ukraine violates the New York Convention and international agreements
Group DF states that the delay by the Ukrainian courts the recognition of the Arbitration Institute of the Stockholm Chamber of Commerce decision to enforce a debt of Odessa Portside Plant to Ostchem Holding Limited company amounting over $300 million or 7.8 billion hryvnia, is a violation of the UN Convention on recognition and enforcement of foreign arbitral awards, which was ratified by 149 countries, including Ukraine.
Igor Golchenko, Group DF Compliance Director, reported this.
“Ukraine is a party to the New York Convention. This means that our state has given its consent to recognize and execute on its territory the decisions of foreign arbitration courts, including the decision of the Arbitration Institute of the Stockholm Chamber of Commerce (Stockholm Arbitration), Igor Golchenko commented. – The decision of the Arbitration Institute of the Stockholm Chamber of Commerce to recover the debt from Odessa Portside Plant for $300 million in favor of Ostchem Holding Limited is final and cannot be revised. As early as March 13, 2018, the Supreme Court of Sweden rejected the appeal of the Odessa Portside Plant in this case. What happens to our case now does not stand up to any criticism”.
According to the norms of the New York Convention, the recognition and enforcement of decisions of the International Arbitration Courts is implemented in practice through the systems of Ukrainian judicial authorities. At the same time, the recognition of the decision of the Stockholm Arbitration in the case of Odessa Portside Plant debt to Ostchem Holding Limited is a formal procedure, as the decision in fact has already been taken and cannot be disputed.
At the same time, according to the decision of the Stockholm Arbitration, the debt of Odessa Portside Plant to Ostchem Holding Limited is not static – the penalty continues to be charged for the full amount until full payment. Thus, while the state is delaying with the recognition of the decision of the Stockholm Arbitration in Ukraine, the debt of Odessa Portside Plant continues to grow day by day.
As soon as Group DF receives the text of the official decision of the Supreme Court of Ukraine, the company will decide on its further legal steps – to continue appealing in the Ukrainian courts or applying to the international courts immediately.
According to Igor Golchenko, Ukraine's failure to comply with international agreements also undermines the country's authority in the international arena and worsens the investment climate within the country.
“In the eyes of a potential investor, the current situation raises fair questions about the existence of an effective system of justice in the country, not to mention the level of protection of foreign investment. If the situation does not change, it is naively to expect investors to come to Ukraine”, Golchenko summarized.