Ukraine could settle dispute with Italian contractor in Kyiv-Odesa highway repair project with amicable agreement
The lawsuit under a claim of Italy's Torno Global Contracting S.p.A, which acted as a contractor in reconstruction and exploitation of the Kyiv-Odesa highway, against the Infrastructure Ministry of Ukraine and the State Automobile Agency of Ukraine (Ukravtodor) with the claimed amount of around $100 million is at the stage of amicable settlement, the Justice Ministry of Ukraine has reported.
"The Justice Ministry has already developed a corresponding draft resolution of the Cabinet of Ministers of Ukraine and sent it for approval to other requisite bodies. A peaceful settlement in this lawsuit will allow saving budget funds (at least $4-6 million)," the ministry said.
The ministry said that it represents the interests of the state in one more commercial lawsuit under a claim by Italy's Todini Construzioni Generali S.r.l, the contractor for the construction of the Kyiv-Kharkiv-Dovzhansky highway. This litigation concerns the application of Ukravtodor for the recovery of guarantees for an amount exceeding UAH 220 million. In November, hearings were held to review the preliminary statements of the parties, and a decision is expected in the near future, the Justice Ministry said.
As reported, in autumn of 2003, Italy's Torno Internazionale S.p.A and the Ministry of Transport of Ukraine signed a framework agreement providing for the granting of a EUR420 million loan to Ukraine for the construction of a concession section of the Kyiv-Odesa highway. As early as 2009, Torno Global and Beta Funding S.r.l. appealed to court with a demand to collect a fine of not less than EUR45 million from the Ministry of Transport of Ukraine and Ukravtodor. The latter were accused of violating the terms of the general cooperation agreement for the reconstruction and operation of the highway.
In January 2013, Ukravtodor signed a contract with Todini Costruzioni Generali S.p.A to overhaul and reconstruction of M 03 Kyiv-Kharkiv-Dovzhansky highway on the Lubny-Poltava section as part of a joint project with the World Bank. Under the contract, works were to finish in September 2014. However, the company postponed the commissioning of the road section several times and the deadline of July 30, 2016 was set.
Late April 2016, the Italian company said that it halted work. Ukravtodor on August 23, 2016 officially annulled a contract with Italy's TodiniCostruzioni Generali S.p.A.
Todini, bought by Prime System KZ early 2016, filed a claim against Ukravtodor to the High Court of Justice of England and Wales.
