Mon, 08 Aug 2022

China takes Ukraine to The Hague court

RT.com
29 Nov 2021, 23:13 GMT+10

Kiev faces a financial penalty of as much as $4.5 billion, after a group of Chinese investors brought legal action against the country over violating the China-Ukraine bilateral investment agreement.

Beijing Skyrizon Aviation, along with several other Chinese investors, has submitted the application to the Permanent Court of Arbitration in The Hague.

The plaintiffs have demanded compensation for unfair treatment of Chinese investors by Ukraine, which has resulted in significant losses in both Ukraine and China, Skyrizon announced in a WeChat post.

Chinese investors claim Ukrainian authorities have continually implemented illegal measures against the company, and say they are ready to use all possible legal tools to defend their legitimate rights.

In 2016, Skyrizon offered to purchase a 56% share in Zaporizhzhia-based Motor Sich, one of the world's leading engine producers for airplanes and helicopters. The deal was aimed to help China fill a gap in aircraft engine manufacturing and for Ukraine to restart its own production.

Beijing Skyrizon Aviation had reportedly agreed to invest $250 million in the Ukrainian plants, and to set up an assembly and servicing plant in the southwest Chinese municipality of Chongqing.

In early 2018, the Security Service of Ukraine launched a criminal probe into Motor Sich over allegations the enterprise's equipment had been exported to China. Trading of Motor Sich shares on the Ukrainian stock exchange was halted, and the register of shareholders was seized. As a result, the previously agreed deal failed to be completed. A court in Ukraine has also frozen 41% of Motor Sich shares controlled by the Chinese firm.

In January 2021, Kiev introduced sanctions against Chinese investors. The penalties included the blocking of assets, reduction of trade operations, partial or complete termination of transit of resources, and flights and transportation through the territory of Ukraine.

In March, a court in Kiev seized the entire assets and all the shares of the aerospace company. The company was reportedly transferred to a government body responsible for managing assets obtained through corruption and other crimes. Later, Ukrainian President Volodymyr Zelensky signed an ordinance to nationalize Motor Sich.

According to a statement issued by China's Skyrizon in January, the enterprise was illegally deprived of legal rights as a shareholder of Motor Sich and as a result suffered a huge economic loss shortly after the sanctions were imposed.

For more stories on economy & finance visit RT's business section

(RT.com)

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