Sanofi-Aventis Ukraine LLC, part of the global pharmaceutical company Sanofi, has sent a report on the international investment arbitration against Ukraine to the Ukrainian government.

Director of Sanofi-Aventis Ukraine Guilhem Granier told Interfax-Ukraine that this concerns the situation around court rulings that allowed writing off UAH 140 million from the company's accounts in favor of Hossa-Plex Ukraine LLC.

"The current situation is treated very seriously. Sanofi operates in more than 100 countries around the world, including developing countries, but none of them has faced similar events. Seeking to protect its rights and ensure unhindered work in the Ukrainian market Sanofi-Aventis Ukraine has sent a message to the Ukrainian government on international investment arbitration against the state of Ukraine," he said.

Granier recalled that in July 2017 under a ruling of the business court of Kyiv representatives of the State Executive Service wrote off more than UAH 45.995 million from the accounts of Sanofi-Aventis Ukraine. These funds were not returned to the company after the Kyiv's business court of appeals accepted the counterclaim of Sanofi-Aventis Ukraine, which was supposed to stop the ruling of the court of lower instance.

In October 2017, after the court dismissed the counterclaim of Sanofi-Aventis Ukraine, the State Service imposed an arrest on the company's bank accounts for the amount of almost UAH 140 million.

Thus, together with the funds written off in July, this resulted in the blocking of more than UAH 180 million belonged to Sanofi-Aventis Ukraine.

"On the next day after the arrest, the executor sent payment requests for recovery of UAH 45.995 million from each of the bank accounts of Sanofi-Aventis Ukraine. This happened, despite the fact that the judicial executor should have been reliably aware that the amount had already been collected in full. That is, the court ruling was executed and the amount of the executive fee was collected. As a result, UAH 45.995 million was repeatedly written off from one of the company's accounts. Thus, under the decision of the court, the double amount of the debt approved in the the court decision and the executive fee of UAH 91.992 million were collected," he said.

Commenting on Sanofi-Aventis Ukraine's return of funds, Granier said that the pharmaceutical company filed a counterclaim against the decision of the courts of the lower instance and appellate instance to the higher business court of Ukraine referring to incomplete clarification of the circumstances of the case and incorrect application of the rules of substantive and procedural laws.

At the same time, the submission of the counterclaim does not automatically stop the execution of the court ruling.

Sanofi-Aventis Ukraine is also recognized as an injured party in the criminal proceeding related to a fraud and forgery of documents, used by the courts.

"We applied to the Business Ombudsman Council and filed numerous complaints against the Ministry of Justice, other authorized bodies and senior officials of the state, and informed the international diplomatic community about the situation. The company sent a message to the Ukrainian government on international investment arbitration against Ukraine, which is provided for by the Ukrainian-French agreement on mutual assistance and mutual protection of investments signed in 1994," Granier said.

Explaining the history and causes of the conflict, Granier said that Hosse-Plex Ukraine LLC had provided marketing services for Sanofi-Aventis Ukraine LLC since 2012. In fact, the services consisted of ordering marketing activities from pharmacies to promote the company's pharmaceutical production, control the quality of these activities and pay for the services provided by pharmacies at the expense of funds received from Sanofi-Aventis Ukraine.

In 2014, Sanofi-Aventis Ukraine became aware of the unfair actions by managers of Hosse-Plex Ukraine LLC, namely - the conclusion of fictitious transactions and tax evasion, on the fact of which a criminal investigation was conducted, and the company's CEO was subsequently brought to criminal responsibility.

"Because of these actions by Hosse-Plex Ukraine LLC, in accordance with the standards of Sanofi-Aventis Ukraine, it was decided to select another provider of these services. In July 2014, a tender was held and another company was selected. In August 2014 an agreement on the provision of services was concluded with the winner.

The service agreement with Hosse-Plex Ukraine LLC ceased to be effective at the end of the third quarter of 2014, after the expiry of its validity period, and this contract was not extended, Granier said.

"However, as it became known today, the managers of Hosse-Plex Ukraine LLC, despite the termination of the agreement with Sanofi-Aventis Ukraine, continued to order marketing services in pharmacies without an order or the contract with our company, and Sanofi-Aventis Ukraine management began receiving claims to pay for these services, which, in particular, were accompanied by threats to individual employees of the company," Granier said.

He said that "during the trial, which began two years later, our opponents provided fabricated, in our opinion, copies of additional agreements and acts of acceptance and transfer of works in support of the services that were allegedly provided for Sanofi-Aventis Ukraine."

"Arguments of our company that the documents mentioned were fabricated and our request for their examination were rejected by the court," Granier said.

According to Granier, Sanofi-Aventis Ukraine after the start of the trial in 2017 and the identification of signs of fabrication of documents which were used to file a lawsuit against Sanofi-Aventis Ukraine, the pharmaceutical company revealed that the previous head and owner of Hosse-Plex Ukraine LLC was prosecuted in 2015 and sold the company in 2016. The new owner and head of the company attracted Bayer Group LLC created in November 2016, which filed a lawsuit against Sanofi-Aventis Ukraine to the business court of Kyiv. Subsequently, Financial Company Avista LLC also took part in the case.

"Sanofi-Aventis Ukraine is not familiar to any of the persons involved in the implementation of this scam. Identifying customers and executors and bringing them to justice is not our task. The goal of our company is to provide uninterrupted access of Ukrainian patients to modern and high-quality medicines. We hope that Ukrainian law enforcement agencies will properly carry out their work, find and bring to justice those guilty of fraudulent actions against a foreign investor," Granier said.

He said that Sanofi-Aventis Ukraine "has serious concerns that this attempt at the illegal seizure is only part of a larger scale scam aimed not only at capturing the company's funds, but also blocking its operation and pushing it out of the Ukrainian market."

Granier said that at present the company has not stopped any of its projects and hopes for proper protection from the state authorities.

"We hope that the country's leadership will use all its powers to stop actions that not only threaten the activities of Sanofi-Aventis Ukraine, but also damage the business climate in the country and the reputation of Ukraine at the international level. This situation may become an obstacle for the arrival of investors in Ukraine and the further development of the country in general. In addition, it can pose a serious threat to Ukrainian patients, limiting their access to the newest medications," he said.