Swissport Alleges Bias In Ukrainian Court

After a seventh court postponement, Swissport issues release criticizing 'inefficiencies' of Ukrainian justice system, 'silence' of government.

Swissport is very concerned about inefficiencies of Ukrainian judicial system and silence on governmental side.

  • The court appeal hearings at the Highest Economic Court keep being postponed, for the seventh time based on dubious reasons lastly on Aug. 30.
  • In the meantime UIA (Ukrainian International Airlines) took unilaterally the decision to increase the share capital in Interavia with the obvious goal to dilute Swissport. By doing so UIA did now for what it sued Swissport, when UIA falsely alleged Swissport of a dilution attempt.
  • The Ukrainian government and it Anti-Raider-Commission are long in coming with their promised support for foreign investors and companies that lost their business through hostile takeovers. 

Swissport is very concerned about the obvious delay tactics of the Highest Economic Court in the Ukraine. The court appeal hearings in the third instance keep taking place for not longer than five minutes before they are postponed again. The judges are being exchanged for the third time now. Delays of this kind were already typical for the court hearings of the first two instances. And it is also not unusual to hear about the outcome of the court appeal hearing already ahead in time, just as for the next hearing scheduled for Sept.18. Well-informed sources told Swissport that the court ruling will be against Swissport.

The delay tactics and inaction from judicial and governmental side gave the opposing party UIA and its shareholders, the time to increase its share capital in Interavia (formerly Swissport Ukraine and renamed into Interavia after the court decision in March) by $1 million, with the obvious goal of diluting Swissport´s shares in case of winning the court case and becoming shareholder again.

It is important to note that UIA had originally - falsely - accused and sued Swissport for the dilution of UIA´s shares through an increase of the share capital. The facts indeed were different. (See details below.)

The judicial system in the Ukraine still seems to allow activities that create facts difficult to reverse. These facts are typical for shareholders that intend to get as much profit out of a company as possible before selling it partially or completely without investing into the company, its people or equipment. The growing business for UIA and the lack of investment into Interavia, its staff and equipment already lead to quality problems. In addition, three experienced top managers of Interavia who had been working for Swissport Ukraine have quit their job in the meantime. This leads to additional trouble and the risk of further decreasing service quality for airline and airport customers.

The promised strong support by the Ukrainian government and the Anti-Raider-Commission of the Ukraine is long in coming. Meetings of this Anti-Raider-Commission with Swissport representatives and the Swiss and French ambassadors scheduled for the beginning and mid of July have not yet taken place.

Swissport is very concerned about the inaction and silence from the Ukrainian government that seems to remain passive in this obvious violation of foreign investment. This is even more surprising for a country that is currently negotiating a free-trade-agreement with the EU and has a strong interest in getting in closer contact with the EU and its membership states. With the experiences Swissport has made so far with investing into business in the Ukraine, other foreign companies that are considering to enter this market can only be warned to better keep hands off.

Swissport appreciates the still on-going support and active involvement of the Swiss and French Embassies in the Ukraine very much, as well as the increasing awareness of this and similar cases at the European Commission. The offices of the President of the EU Commission, José Manuel Barroso and the Vice President, Siim Kallas, are aware of Swissport fighting to get back its business in the Ukraine. And Swissport is about to send an update on its case to the EU Commission to show evidence that the promises of the Ukrainian Anti-Raider-Commission to date only consisted of promises, contradicted by the ability of the Ukrainian aggressor to dilute Swissport's share despite the pending litigation. There appears to be no effective protection of foreign investment in the Ukraine.

Swissport International Ltd. provides ground services for around 118 million passengers and 3.5 million tonnes of cargo a year on behalf of some 650 client-companies in the aviation sector. With a workforce of around 40,000 personnel, Swissport is active at 181 stations in 37 countries on five continents, and generates annual consolidated operating revenue of CHF 1.9 billion.

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