18:46 15.09.2021

Judgment in favor of NFP in case of shutting down TIU Canada SPP to create dangerous precedent in Ukraine – attorneys

5 min read

KYIV. Sept 15 (Interfax-Ukraine) – The negative court decision in favor of Nikopol Ferroalloy Plant (NFP) in the case of disconnecting the enterprise from the TIU Canada solar power plant (SPP) in Nikopol will create an extremely dangerous precedent in Ukraine and will actually allow unjustified disconnection of consumers and electricity producers from the grid, says Kateryna Tsvetkova, attorney at law of GOLAV, representing interests of Ekotechnik Nikopol LLC (TIU Canada).

"Therefore, the attention of the entire world community is now riveted to this case, and it is extremely critical for investments in the Ukrainian energy sector," Tsvetkova said at a press conference at Interfax-Ukraine on Wednesday.

The TIU Canada power plant shutdown case will be heard at the Northern Economic Court of Appeal on October 4.

As reported, on March 2, 2020, NFP completely disconnected a 10.5 MW solar power plant from Ekotechnik Nikopol LLC (TIU Canada) from the power grid. TIU Canada noted that NFP took advantage of the fact that the SPP was connected to a substation located on its territory, and explained the need for shutdown by repair work.

As a result, Ekotekhnik Nikopol LLC (TIU Canada) filed a lawsuit against NFP, Ukrenergo and DTEK Dnipro Grids with Kyiv Economic Court, which, in turn, in January 2021 rejected the company's claims to the three listed defendants. In response to the court's decision, Ekotechnik Nikopol filed a complaint with the Northern Commercial Court of Appeal, which opened the relevant appellate proceedings in March 2021.

A court session to consider the case took place on July 26, however, a break was announced in the session due to the absence of NFP representatives. At the same time, the retrial on the "Nikopol case" on September 8 was also postponed to October 4 due to the filing by NFP of an appeal to the Northern Commercial Court of Appeal against the January decision of Kyiv Economic Court, which NFP had previously supported.

In its appeal, NFP believes that the claim of Ekotechnik Nikopol against Ukrenergo as part of the consideration of the case in Kyiv Economic Court was piecemeal and did not contain specific claims against the company, and for this reason the case should have been considered by the Economic Court of Dnipropetrovsk region.

In turn, as noted by attorney at law of GOLAV Kateryna Manoilenko, disconnecting a subject from access to the power grid requires a certain procedure and in the case of the shutdown of the TIU Canada solar power plant in Nikopol, Nikopol Ferroalloy Plant, according to the law, had to obtain preliminary appropriate permits from Ukrenergo and DTEK Dnipro Grids.

"In this case, Ukrenergo is the operator of the transmission system. Namely, Ukrenergo should have granted or not granted permission to disconnect the Canadian investor from the grid," Manoilenko said, calling the actions of Ekotekhnik Nikopol to determine the three defendants in the person of NFP, Ukrenergo and DTEK Dnipro Grids quite reasonable and eligible.

"The case should have been considered, and it was considered by Kyiv Economic Court. The Canadian investor believes that there are three participants – this is the main defendant – the one that carried out the illegal disconnection – NFP – as well as two others that did not take any action to protect the rights of the Canadian investor," the attorney said.

In addition, according to Tsvetkova, NFP, when filing an appeal to the Northern Economic Court of Appeal on September 7, exceeded the 20-day deadline for filing an appeal by a participant in the case established by procedural legislation from the moment the text of the court decision was received.

"In this case, the terms of the appeal, according to the Procedural Code, ended on February 28, 2021," Tsvetkova said.

At the same time, NFP argued for the delay in filing an appeal with the allegedly limited budget for the payment of the court fee, as well as difficulties with legal support of court cases.

At the same time, according to the annual report of PrJSC Nikopol Ferroalloy Plant for 2020, the company received UAH 456 million in net profit.

"We believe that filing such an appeal is nothing more than a delay in the consideration of the case and an abuse of one's procedural rights," the attorney says.

However, the Northern Economic Court of Appeal announced on September 8 that it was accepting the NFP's complaint to the appeal proceedings.

"In connection with such a rather controversial decision of the court, we challenged this panel of judges," Tsvetkova said.

TIU Canada has been operating in Ukraine since 2016. The company put into operation a 10.5 MW SPP in Nikopol in January 2018, an 11 MW SPP in Mykolaiv region in April 2019. In addition, TIU Canada launched a 33 MW SPP in Odesa region. The company's investments in solar energy, which became the first investor in Ukraine under the Canada-Ukraine Free Trade Area Agreement (CUFTA), amounted to over $65 million.

Nikopol Ferroalloy Plant is controlled by EastOne Group, established in autumn 2007 as a result of restructuring of Interpipe Group, and Privat Group, both based in Dnipro.