Stockholm court refuses to hear multibillion claim of Ukrnafta minorities to Ukraine

After almost six years of litigations in Stockholm Arbitration,
the court totally dismissed the claim of three Ukrnafta (UNAF UK) minority
shareholders to Ukrainian government, Justice Minister Denys Malyuska reported
on Feb. 4. In particular, the court decided that it has no jurisdiction to hear
the claim, Malyuska wrote, calling the event as “super mega victory.”

The size of claim had exceeded USD 6 bln, which
Ukrnafta shareholders (three Cyprian companies controlled by Ihor Kolomoisky
and Hennadiy Bogolyubov, owning 40.1% stake) demanded from Ukraine. The claim
was related to compensation of minorities’ alleged losses from Ukrnafta’s
unfavorable natural gas price regulation and taxation imposed in late 2000s.
The initial size of the claim was USD 4.7 bln, as was reported in 2016.

Interestingly, according to the zn.ua news site, the
court motivated its dismissal to hear the case, among other, by the suspicion
the plaintiffs’ investments in Ukrnafta were “tainted by bribery and
corruption.”

Alexander Paraschiy: Taking into
account the size of potential losses of Ukraine from the case, this is indeed a
big victory of Ukrainian government. Besides removal of a risk of huge payments
from the state budget to Kolomoisky and Bogolyubov, the court’s ruling
increases leverage of Naftogaz in its upcoming negotiations on Ukrnafta’s
assets separation between the government and the minority shareholders.