Kyiv, February 17, 2012. The raider seizure of the Ukraina shopping mall, legalized by the decisions of the Kyiv City Commercial Court, was accompanied by a series of legal sensations and anti-records, which are gradually becoming common practice in the work of the Ukrainian courts. The lawyers from the Magisters law firm believe that the case of the Ukraina shopping mall has seen the use of the full spectrum of the court-brokered raiding methods and shared merely the most brazen examples of them. It will be remembered, that the Kyiv City Commercial Appeals Court announced its decision confirming the lawfulness of the exaction of $45.2 million from the Ukraina shopping mall only a few hours after the Ukraine case was officially recognized as a raider seizure at a meeting of the interdepartmental commission on countering illegal mergers and takeovers of companies. The lawyers of the Magisters law firm summarized the key tools that have been used to facilitate the raider seizure of the mall. The seizure of the Ukraina shopping mall began in April 2011, when the Yurbizneskonsulting law firm filed a lawsuit against it for the amount of nearly UAH 1.8 million (around $200,000). As a result of the interim relief granted in the abovementioned lawsuit, all shares of the public company "Univermag "Ukraina", the market value of which constituted tens of millions of US dollars, were attached. The Stanik precedent – "glitches" in the theory of probability. Five different cases connected to the shopping mall "Ukraina" have been assigned by the system of the random allocation of cases to one and the same judge – Sergiy Stanik. His further actions and decisions confirmed the suspicions that he was allocated these cases not by accident. Misuse of minority shareholders' lawsuits. The practice of lodging fictitious lawsuits by minority shareholders (one of them was the owner of just one share) was used to procure judgments that prohibited the amendment of the Unified State Registry of Companies and Private Entrepreneurs according to the decisions of the newly appointed acting director, adopted by the general meeting of the mall’s shareholders. Such lawsuits were frequently filed on behalf, but without the consent of the respective minority shareholders. In all of these cases judges immediately, within one day, granted interim relief. In contrast, repealing these decisions, after the minority shareholders revoked the lawsuits filed without their consent, took the judges very long, sometimes up to two months. A conveyor of identical lawsuits. The texts of the minority shareholders' applications in cases No 62/175, 62/185 and No 51/515 have numerous fragments, identical to those in the claims lodged earlier by two other minority shareholders (cases No 57/409 and No 25/207), which concerned the nullification of the decisions of the general meeting of shareholders of the shopping mall "Ukraina" of 1 November 2011 (which in fact never took place) and of November 7, 2011. Thus all lawsuits came off the same conveyor belt. Ignoring decisions of foreign courts relevant to the case. The judge of the Kyiv City Commercial Court Litvinova ordered the payment of $45.2 million to the offshore company Lyndhurst Development Trading S.A. even after she was informed about the decision of the High Court of Northern Ireland of December 23, 2011, which prohibited Lyndhurst Development Trading S.A. from claiming this payment, noting that the breach of this prohibition will make this company criminally liable. A similar decision was made by the court of the British Virgin Islands – the place of registration of the offshore company Lyndhurst Trading S.A. The Kyiv City Commercial Appeals Court also adopted an approach of ignoring the decisions of the foreign courts. Courts turning a blind eye to forgery of documents. The case No 35/465 concerning the recovery of $45.2 million from the shopping mall “Ukraina” was based on the series of concession agreements, the last of which was allegedly signed in favor of Lyndhurst Development Trading S.A. The last agreements were signed with a forged signature of Peter Derr Quinn, a fact he confirmed under oath. In other words, the court was told that the claim of Lyndhurst Development Trading S.A. was based on a forged document. The Kyiv City Commercial Appeals Court did not take this fact into consideration, rejected the request to forward the materials of the case to the law enforcement agencies, refused to demand Lyndhurst Development Entertainment S.A. to provide the originals of the agreements for examination, disallowed the forensic analysis of the signature and in the end endorsed the validity of the decision of the Kyiv City Commercial Court. Hearing cases in record-breaking terms. The decision on merit in the case 35/465 concerning the exacting of $45.2 million from the shopping mall "Ukraina" was made in a record-breaking 11 days. The pronouncement of the judgment with respect to the appeals took only one day of court proceedings. Such promptness was made possible, among other things, by the court's refusal to allow the interested parties (in particular the signatories of the agreement with Lyndhurst Development Trading S.A.) to take part in the proceedings. The court also chose not to summon the representatives of the claimant, Lyndhurst Development Trading S.A. to the appeals hearings, which allowed judges to pronounce the necessary decisions with the maximum speed. The judges' illness. To obtain a required decision, or, to the contrary, to slow down an unwanted one, the illnesses of the judges of the Kyiv City Commercial Court and of the Kyiv City Commercial Appeals Court were used to achieve the desired outcome. The hearing of the case NO 25/207, filed by a minority shareholder, was delayed due to the unexpected illness of judge Morozov S.M. The proceedings in the case 35/465 Lyndhurst Development Trading S.A. versus the shopping mall "Ukraina" were rescheduled a number of times due to the alleged illness of the then presiding judge Loban O.I. It is noteworthy, that the decision to reschedule the court hearing in case 35/465 to 1 February 2012 was accompanied not only by the replacement of the ill presiding judge, but of the whole panel of three judges (O.I. Loban, B.O. Tkachenko, R.V. Fedorchuk). The decision in this case was entrusted to judges P.V. Avdeev, N.M. Korshun and V.V. Kuksov. Judge Avdeev was later too replaced by judge O.M. Gavrylyuk due to the former's illness. IBRC (Irish Bank Resolution Corporation) is a financial institution that is fully owned by the Republic of Ireland and thus, indirectly, by all Irish taxpayers. Prior to a name change on October 14, 2011, IBRC was known as the Anglo Irish Bank Corporation Limited. Founded in 1964 in Dublin, the company continues to have its headquarters there today, with offices in other cities in Ireland and the United Kingdom. At the moment, the bank is being forced to actively assert its rights and lawful interests in the suits that have been initiated very recently in the Commercial Court of the City of Kyiv with the purpose of removing encumbrances on assets that have been placed under lien in the Bank’s favor. Quinn Holdings Sweden AB was founded in 2005 and is headquartered in Stockholm. Quinn Holdings Sweden AB (QHS) is the majority shareholder of PAT Univermag Ukraine, a publicly held company in Kyiv, Ukraine. Currently QHS holds nearly 93% of the company’s stock. For additional information, contact: Oleksiy Syvak, Senior Advisor, CFC Consulting +38(044) 492-75-99 or [email protected]
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