THE UKRAINIAN courts have granted a $45.2 million (€34.6 million) judgment to an obscure British Virgin Islands company that threatens to frustrate Irish Bank Resolution Corporation efforts to secure a shopping mall in Kiev that has a rent roll of approximately $10 million per annum.
Following the ruling, a senior executive with the State-owned Irish Bank Resolution Corporation (formerly Anglo Irish Bank) described the Kiev courts as “a tool of legalised robbery of foreign investors”.
The Ukraina shopping mall in Kiev is one of a number of properties in central Europe and further afield purchased by the family of businessman Seán Quinn in the last decade and against which mortgages were issued to Anglo Irish Bank.
The family has been unable to repay loans of more than €2 billion to the bank and the bank is in the process of seizing properties on which it has charges.
However, it has been encountering difficulty in seizing control of the $60 million shopping mall, which is owned by way of a Ukrainian company called Univermag.
On December 26th, the Kiev courts granted the judgment to the hitherto unknown British Virgin Islands company, Lyndhurst Development Trading SA, which submitted a claim for $45.2 million against Univermag.
The judge who heard the application allowed a submission from a representative of the former director of Univermag, even though the director who replaced her and who represents Irish Bank Resolution Corporation’s interests, was in court.
The Quinn family, which is in dispute in Ireland with the State-owned bank over its efforts to seize the Ukrainian and other properties, was not represented in the Kiev court.
Senior Irish Bank Resolution Corporation executive Richard Woodhouse said he had never encountered such a cynical deprivation of property.
“We are basically facing the Ukrainian court system, which in essence acts as a tool of legalised robbery of foreign investors,” Mr Woodhouse said.
In a press release issued in Kiev, he appealed for support from the Ukrainian business community and the prime minister of Ukraine, Mykola Azarov.
The local solicitor who acted in the case for Irish Bank Resolution Corporation’s interests, Dmytro Marchukov, has also condemned the decision.
“It was clear to us from the first minutes of the hearing that the decision had already been made and the subsequent actions of judge Litvinova only confirmed this,” he said.
“We don’t understand why the representatives of Univermag “Ukraina”, who, unlike Larysa Yanez Puga, have not accepted the claims of the off-shore company, were not allowed to participate in the hearing.”
Mr Marchukov said the next step could be the forced bankruptcy of Univermag. “We continue to defend the rights of our clients by all lawful means, yet it is not the first time that we face the decisions of the commercial court concerning the shopping mall which we cannot explain from the point of view of the adherence to the rule of law,” he said.
