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The Economic Court of Kyiv has upheld a claim filed by Arab Energy Alliance UA LLC against Ukraine's largest gas producing state holding PJSC Ukrgasvydobuvannya and ruled to recover UAH 231.6 million, or US$8.8 million, owed by the gas producer to the Arab investors since 2012, according to the Dilova Stolytsia business newspaper.
Ukrgasvydobuvannya criticized the court's ruling, stating that Arab Energy Alliance UA LLC illegally attempted to seize the company's funds, as a result of which all its accounts were frozen, which could affect the company's work, Dilova Stolytsia wrote.
President of Arab Energy Alliance UA LLC Raid Bu-Khamseen in turn said that the current situation is the result of the unfair work of the Ukrainian state-owned company's former managers.
Read alsoUkrgazvydobuvannya files lawsuit against companies associated with Ukraine billionaire Firtash Hydrocarbons whose cost compensation was demanded by Arab Energy Alliance UA were produced in 2012 under a joint operation agreement. However, according to the company, Ukrgasvydobuvannya did not timely transfer them to the balance sheet of the joint activity, having appropriated the joint property. Although, after that the parties had successfully cooperated until May 2014, when the agreement validity expired. Ukrgasvydobuvannya had failed to comply with the judicial decisions of 2013 on the transfer of these resources, which remain in force today. It also ignored the enforcement proceedings initiated for their implementation. Representatives of Ukrgasvydobuvannya recognized in court that the company had already sold the said hydrocarbons, which are a joint property, depriving the participants of legal profits. At the same time, they understand that the agreement on joint activities has already ended, and therefore the transfer of hydrocarbons to the operator for the sales in the interests of the joint activity is no longer possible. However, they refuse to compensate Arab Energy Alliance for the part of the assigned joint property.
"It's not our company that is trying to seize the funds of Ukrgasvydobuvannya, but this is the state-owned company that grabbed our property and didn't want to return it over four years, ignoring the laws and the courts' decisions," Raid Bu-Khamseen said.
He also noted that he sympathized with the management of Ukrgasvydobuvannya as they need to write off the money required for the company's production activity. Nevertheless, he stressed that those debts were the lineage of unfair actions of the company's ex-management with regard to its partners.
"We welcome the court's ruling, which shows that the judicial system in Ukraine is independent, as is customary in international practice, and that in connection with the signing of the EU-Ukraine Association Agreement, international standards will increasingly operate in the country. Finally, let me say that we respect and support the work of Ukrgasvydobuvannya's new management and ready for various forms of cooperation, such as participation in joint projects, agreements on distribution of products and the like," Raid Bu-Khamseen said.
PJSC Ukrgasvydobuvannya claimed earlier that Arab Energy Alliance UA LLC had attempted to take over the company's assets estimated at UAH 231.6 million, or $8.8 million, which could damage the performance of Ukraine's largest gas producing company.