December 08, 2010
Magisters, a leading CIS-based law firm, together with international law firm White & Case LLP successfully defended the State of Ukraine in an arbitration dispute brought by American companies Global Trading Resource Corp. and Globex International, Inc., which was heard at the International Center for Settlement of Investment Disputes (ICSID). The award dismissing the claims against Ukraine was issued on December 1, 2010.
The Tribunal decided to dismiss the proceedings after Ukraine had raised an objection that the claims against it manifestly without merit within the meaning of Article 41 (5) of the ICSID Arbitration Rules. This was the first time in ICSID history that the arbitrators dismissed a claim after a summary review on the basis of Article 41(5) of the Rules. The Tribunal agreed with counsel for Ukraine that the claims brought in this arbitration represented nothing more than claims to payment under regular commercial transactions, and did not therefore amount, in law, to ‘an investment,’ falling outside of the scope of ICSID jurisdiction.
The Tribunal consisting Sir Franklin Berman (Great Britain), Prof. Emmanuel Gaillard (France) and J. Christopher Thomas, QC (Canada) was unanimous in issuing its award. Arbitration request was submitted by two U.S. companies on May 21, 2009 and related to the import of meat and poultry products by these companies to Ukraine. Total amount claimed was close to USD 35 million.
Magisters’ team working on this case consisted of Kyiv-based Partner Serhii Sviriba, senior associate Markiyan Kliuchkovskyi, and associate Krystyna Khripkova. The team of White & Case LLP included partners John S. Willems and Michael Polkinghorne, as well as associates Kristen M. Young, Nathalie Makowski, Olga Boltenko, and Angélica André.
Serhii Sviriba, Partner in charge of Magisters' International Arbitration and Litigation Practice, reflects on this: “Today we have seen an unprecedented arbitration decision which set out a new approach to dispute resolutions in arbitration. We are pleased to have helped protect Ukraine's national interests, and we will continue assisting the Government of Ukraine in a wide range of arbitration disputes”.
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