Container Terminal Illichivsk continues to fight for their rights against Illichivsk Port management controlled by oligarch Kolomoisky
Kyiv, August 11, 2015. On August 5th, 2015 Kyiv Economic Court held the second hearing at the suit of private enterprise Container Terminal Illichivsk (CTI) against the state enterprise Illichivsk Commercial Sea Port (ICSP), the Ministry of Infrastructure of Ukraine and the State Treasury claiming the return of the investor's contribution to the joint activity with ICSP and compensation of the lost profits. The court, violating the fundamental principles of equality and competitiveness and preventing CTI from taking full advantage of procedural rights, dismissed CTI’s claims in full. CEO of CTI Andriy Pavlyutin said the company was already preparing an appeal against the court ruling, despite the apparent involvement of certain persons and entities controlled by the oligarch Ihor Kolomoisky. "We are not surprised by this court ruling. Based on our previous attempts to solve the conflict with the executives of the ICSP in courts, we were well aware that this time too, a miracle would not happen. Complete violation of due process, motivated by a desire to advance the interests of individual Ukrainian oligarchs, by definition, cannot lead to a legitimate and fair court ruling," commented Andriy Pavlyutin. "In the times of omnipresent Internet, it is very difficult to conceal any important information from the public eye. And recently we were able to obtain indirect evidence that institutions connected to Ihor Kolomoisky were behind the "special operation" of pushing CTI out of Illichivsk," said Pavlyutin. Thus, ICSP was represented in courts by lawyer Dmytro Troyekurov, who is a director of a legal department at PJSC Aerobud, whose shareholders are several Cyprus companies related to one of the leaders of the Privat group Hennadiy Boholiubov. Moreover, the former head of the Odesa Regional Administration, Ihor Palytsia, business partner of Ihor Kolomoisky, has publicly acknowledged as his personal achievement the victory of Illichivsk Port in all the courts against CTI. Analyzing the statistics of container traffic at the port of Illichivsk as a whole, a sharp drop in freight turnover at ICSP becomes apparent at the same time as a rapid growth in freight volume at the private Illichivsk Sea Fishing Port is observed. 100% stake in Illichivsk Sea Fishing Port belongs to a joint-stock company Antarctica, which is a part of a business group controlled by Ihor Kolomoisky. The company with foreign investments Container Terminal Illichivsk filed a law suit against ICSP, the Ministry of Infrastructure of Ukraine and the State Treasury claiming compensation for the termination of the joint venture agreement, concluded between CTI and ICSP in 2005. CTI’s management has repeatedly stated that after investing more than 50 million U.S. dollars into the development of port infrastructure, the company was interested in continuing cooperation with the state enterprise ICSP and was willing to compromise to reach mutually beneficial conditions. This position was presented, in particular, at joint meetings in the presence of the Minister of Infrastructure of Ukraine Andriy Pyvovarsky, ICSP's management and state enterprise Administration of the Seaports of Ukraine in March 2015. Moreover, CTI has accepted all changes to the conditions of the contract, voiced by ICSP’s management and confirmed this in a letter to the Minister of 03.13.2015. Despite this fact, ICSP’s management, including the former director Yuriy Kruk, systematically insisted on the termination of cooperation with CTI and termination of the joint venture contract in the court. In 2015, ICSP’s intentions were initially confirmed by the Odesa courts and, subsequently, by the Supreme Economic Court of Ukraine. As a result of their decisions, CTI filed a claim for loss of profits in the amount of $540 million. According to the joint venture agreement, loss of profits was calculated in accordance with the envisioned capacity of 500 TEUs. Debunking the myth that cooperation with CTI was economically inefficient for the state, CTI presents the facts: contrary to the assertions of ICSP, economic indicators of port commercial activity after the termination of the contract with CTI deteriorated drastically. In particular, there has been an unprecedented decline in cargo turnover (70% in the period from January 2014 to April 2015 with an overall decline of the Ukrainian market of the freight turnover by 30%). Also, in 2015 the government has not received any revenue from the CTI, which in 2014, by comparison, accounted for UAH 98.276 million. In total, CTI has paid 91.557 million U.S. dollars in taxes to the state since company's inception in 2005. CTI was established in 2005 to enhance the infrastructure of the Illichivsk seaport and increase the freight turnover. Acting on the basis of joint venture agreement concluded between CTI and the state enterprise Illichivsk Commercial Sea Port in 2005, the company conducted a large-scale reconstruction of the container terminal. The total amount of CTI’s investments reached 51 million U.S. dollars. CTI’s foreign investors include the American investment fund Siguler Guff & Company and the German forwarding company SRR Deutschland.