The court allowed Ukrtranscontainer to resume cooperation with the Ilyichevsk port

Ukrtranscontainer has achieved a review of the decision to terminate the agreement on joint activities with the Ilyichevsk port. The court used information from the Ilyichevsk tax inspectorate, which provided data on the state’s losses from breaking the agreement in the amount of UAH 150 million. The Cabinet of Ministers hopes that the renewal of the agreement will avoid a dispute that is obviously losing for Ukraine in the European Court of Human Rights, where the company appealed to protect its interests.

On August 30, the Economic Court of the Odessa Region revised its decision of May 12, 2009 to terminate the agreement on joint activities between the stevedoring company Ukrtranscontainer and the Ilyichevsk Commercial Sea Port (IMTP), the company reported. “In just one year since the contract was broken, the port has lost $440 million in investments, and the state budget has lost UAH 150 million,” said Vladimir Popov, director of Ukrtranscontainer. He expects that the port and the Ministry of Transport will challenge this decision in the appeal court. “But we have a strong position, and we are ready to prove that we are right,” added Mr. Popov. The IMTP press service declined to comment on the court’s decision.

The agreement on joint activities of the Ilyichevsk Commercial Sea Port and Ukrtranscontainer was signed in 2005. But in 2009, the Odessa regional prosecutor’s office challenged this agreement on the basis of the company’s violation of investment obligations. Later, Ukrtranscontainer appealed to the European Court of Human Rights due to the fact that the agreement on joint activities with the port was unilaterally terminated by the latter. The plaintiff demands recognition of the fact of violation by Ukraine of a number of norms of the convention and payment of compensation in the amount of $1.4 billion (see issue dated June 2).

The court decision (a copy is available to Kommersant) states that the basis for canceling the previous decision was the losses incurred by the state budget as a result of the cessation of work at the port of Ukrtranscontainer. To confirm the losses of the state budget, the court asked the State Tax Inspectorate of the city of Ilyichevsk to provide data on tax deductions from the Ilyichevsk port and from joint activities. In response to the court’s request, the tax office sent letter #22128/8/20-01 dated August 25, which states that in the first half of 2009, IMTP and Ukrtranscontainer paid VAT and income tax to the state budget in the amount of UAH 172.7 million ( 104.5 million and 68.2 million UAH, respectively). While according to the results of the second half of 2009, IMTP transferred UAH 90.1 million, according to the results of the first half of 2010 - UAH 104.4 million. According to the tax authorities, in the year after the termination of the contract, the state’s losses amounted to UAH 150 million.

The Prosecutor General's Office announced yesterday that they intend to open a criminal case into the state's tax losses. “We will study this data and initiate a criminal case. The people who were involved in breaking the contract with Ukrtranscontainer will be held accountable,” Yuriy Boychenko, head of the GPU press service, told Kommersant. Gennady Skvortsov, who held the position of port director at the time of the termination of the agreement, declined to comment yesterday.

The Cabinet of Ministers told Kommersant that the decision of the Economic Court will avoid proceedings in the European Court of Human Rights, which was obviously a losing proposition for Ukraine. Let us recall that earlier Prime Minister Mykola Azarov said that the government intends to peacefully resolve the conflict with Ukrtranscontainer, since, in his opinion, the contract with the company was terminated illegally - “at the whim of former Prime Minister Yulia Tymoshenko.”

Director of the consulting company BlackSeaTrans Valentina Mikhailova suggests that the Cabinet of Ministers will try to resolve the conflict with Ukrtranscontainer and the company will return to the port without hindrance. “In fact, the Ilyichevsk port has been in a state of stagnation for a year now - transshipment volumes are falling, financial indicators are deteriorating. The current leadership of the Ministry of Transport has not yet been able to do anything to change this situation,” said Nikolai Kovzel, a member of the Verkhovna Rada Committee on Transport and Communications.

Andrey Ledenev, Oleg Gavrish

The agreement was raised from the bottom