The Other Side To The Swissport Ukraine Saga

April 30, 2013
Ukraine International Airlines renames ground handler, Interavia.

There were two press conferences recently with Swissport and Ukraine International Airlines telling their respective sides of recent court action in Ukraine that ruled in favor of UIA. Up until that time, we heard more from Swissport than we did from UIA. We'll have more in our May issue on the story. In the meantime, here's a Q&A we conducted with Evgeniya Satskaya, UIA's corporate press secretary.

Q: I understand that UIA went to court based on a mere discussion of a further capital investment that would result in the dissolution of UIA’s holding.

A: It was not a discussion. On March 6th 2012 SPI held the GSM where SPI voted in favor of dilution of UIA’s shareholding in SPU, that was the default under the Participant's Agreement. UIA has subsequently sent a default notice to SPI but given the absence of any response from SPI has brought the action in court.

Q: Swissport says that the rules of the joint-venture allowed both parties to invest in the JV, but that UIA did not want to invest any money.

A: There were no such rules. Investment has always been each party’s sole right. UIA were willing to invest based on a long-term development strategy that the parties were not able to agree upon due to different visions of SPU future development.

Q: I’m not sure I’m following the legal process. If I understand correctly, the case began in the Kyiv City Economic Court. What exactly was the ruling of this court that Swissport then appealed to the Kyiv Economic Court of Appeals?

A: Kiev City Economic court has essentially satisfied UIA’s claim. SPI obviously disagreed with that ruling and brought further appeal with the Court of Appeal. However, on March 27, 2013, the Court of Appeal upheld the ruling of Kiev Economic Court.

Q: How was the decision to evaluate Swissport Ukraine at between $25 million and $30 million reached?

A: SPU was evaluated by the independent appraiser, appointed by SPI, named BDO Valuation LLC.

Q: Early reports suggested that Swissport would not appeal the case, but the company has now started an appeal as of April 16. What is UIA’s response to this latest appeal?

A: We received SPI’s cassation appeal only on April 22nd, 2013. However, it is incomplete as is fails to contain any pleading. Therefore, such appeal is either generally invalid and as such will not be considered by the Court or it is an attempt to hinder due process of law.

Q: What will be the new name of Swissport Ukraine?

A: INTERAVIA

Q: Swissport has announced that it has asked for help from the European Commission, as well as members of the Ukraine Partnership Delegation. What does UAI think will be the result of this?

A: In the meantime UIA is not aware on the essence of any such request. UIA has always trended to resolve the conflict in a legal rather than in political way. However, once relevant materials are available to UIA we’ll instruct our counsellors to evaluate those inter alia in terms of corruption shading.