Recent Posts
- Ukraine recovery should be based on development of territorial communities, innovations, involvement of professional domestic community – results of ESUR forum 29.06.2023
- Ukraine repatriates five more seriously wounded Russian POWs 10.04.2023
- Rada intends to include history of Ukraine, foreign language in final certification for general secondary education 10.04.2023
- Rada terminates protocol on joint anti-terrorist measures in CIS territories for Ukraine 10.04.2023
- 100 Ukrainians, incl defenders of Mariupol, returned according to swap procedure – Yermak 10.04.2023
Govt allows Naftogaz to buy legal services under negotiation procedure for arbitration dispute with Ukrnafta minority shareholders
KYIV. Dec 3 (Interfax-Ukraine) – The Cabinet of Ministers of Ukraine has allowed NJSC Naftogaz Ukrainy to purchase legal services under the negotiation procedure to defend the country’s interests during the settlement of a dispute between PJSC Ukrnafta and its minority shareholders represented by Cyprus Littop Enterprises, Bridgemont Ventures and Bordo Management in the international arbitration.
The decision is enshrined in government order No. 1526-r dated November 29, 2021, the text of which was made public on the government portal.
Naftogaz is assisted by KWM Europe LLP (London, the U.K.) in the claim of Ukrnafta minorities in the London Court of International Arbitration (LCIA). The cost of the contract between Naftogaz and KWM Europe for 2017-2018 amounted to EUR 3 million, for 2019-2021 it was EUR 4 million.
As reported, in January 2010, Naftogaz and Ukrnafta’s minority shareholders associated with the Privat group entered into a shareholder agreement (SHA), in particular, determining the procedure for electing the chairman and members of the board, as well as the supervisory board and the required quorum of the largest oil company country.
According to the document, the chairman of the board should be elected from candidates proposed by minority shareholders, and six out of 11 members of the supervisory board and its head should be nominated by Naftogaz. At the same time, the quorum was achieved in the presence of eight out of 11 council members, which at that time did not contradict the law on joint-stock companies. In March 2015, after the amendments were made to this law, the quorum for supervisory board’s sittings was reduced to a simple majority of votes.
In June 2015, Ukrnafta’s minority shareholders filed a lawsuit with the LCIA demanding to oblige Naftogaz to adhere to the SHA terms, even though the rights of Naftogaz as a controlling shareholder were limited in comparison with the rights provided for by the current legislation.
The arbitral tribunal issued its partial final ruling on April 26, 2018, recognizing its jurisdiction in the dispute. The court confirmed that some of the provisions of SHA are contrary to Ukrainian law, but refused to declare it completely invalid or unenforceable. Naftogaz recently filed a counterclaim.
