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Swissport, which claims to be the victim of a corporate raider attack in Ukraine, has lost its latest court battle after a court of appeal found in favour of former partner Ukraine International Airlines (UIA).
The ruling came despite a decision last October in the Highest Economic Court that cancelled all prior decisions and referred the case back to the first instance court. And in May this year, that court also ruled in favour of Swissport.
The handler called the latest judgment “surprising”, as it believed it had a “final and binding” court ruling in its favour.
The case started in 2012, when Swissport was looking to increase investment in its handling partnership with UIA, Swissport Ukraine. At the time it held a 70.6% stake. Following discussion at one meeting, UIA alleged that Swissport had agreed a capital increase against the votes of UIA and had, therefore, violated UIA´s minority shareholder’s rights. Swissport denied this and claimed there was no evidence to support the accusation.
After what appeared to be a series of irregularities in court, with judges changed at the last moment and several delays, UIA won the right to buy Swissport’s stakein the JV for just $400,000. However, Swissport maintains the value of the company was between $25m and $30m, causing it to lose some $20m.
Swissport Ukraine was then renamed Interavia.
In a statement released on Friday, Swissport claimed: “The court appeal hearings at the Highest Economic Court were postponed several times based on dubious reasons. In the meantime, UIA had unilaterally taken the decision to increase the share capital in Interavia with the obvious goal to dilute Swissport.
“By doing so UIA did the very thing, for which it sued Swissport when the company falsely alleged Swissport of a dilution attempt. The Ukrainian government and Anti-Raider-Commission were long in coming with their promised support for foreign investors and companies that lost their business through hostile takeovers.”
It also noted: “The capital increase has never been resolved by Swissport and UIA to date was never able to give evidence to their allegation.”
The Swiss handler maintains that its relationship with UIA, which had been good, changed in 2011 when UIA was sold to private investors including Ihor Kolomoyski and Aron Mayberg. The Ukraine press has reported that some observers had doubts over the valuation at the time of the deal.
In its statement, Swissport indicated that it believed there could be a political element to the latest court judgment.
“Swissport Ukraine LLC was victim of a raider attack followed by a flawed legal process led by Ukraine International Airlines (UIA), rumoured to be ultimately owned by oligarch Igor Kolomoisky, governor of the Dnepropetrovsk district.”
It added: “The fact that the Court of Appeal now ruled against Swissport in the main case is a surprise, since the verdict is not in line with Ukrainian law and contradicting Ukraine’s attempt to get closer to European legal standards and to improve its legal and political environment to protect foreign investments efficiently. The recent ruling in this context seems to be rather contradictory.
“However, Swissport is still confident that the current political developments are going in the right direction and will help to establish due process and primacy of the law. The Swiss and French embassies continue to support Swissport’s efforts to regain its business in the Ukraine, and the EU Commission is aware of the proceedings as well.”
Swissport is to appeal the decision. The Loadstar was unable to contact UIA over the weekend.