News date: 25 November 2024
Ilyashev & Partners Law Firm successfully represented one of the largest port terminals at Mykolaiv Seaport in 16 court cases over JSC Ukrzaliznytsia (Ukrainian Railways) claims for collecting fees from wagon use and storage.
The dispute between the port terminal, owned by a well-known international agricultural corporation, and Ukrzaliznytsia arose due to the actual shutdown of the sole business entity that had the exclusive right to operate the railway sidings at the Mykolaiv-Vantazhny, the nearest train station to Mykolaiv Seaport, which Ukrzaliznytsia had a conflict with in autumn of 2019.
Mykolaiv Seaport is the only state port where a private intermediary has been involved in the delivery/collection of state railway cars.
As a result, the port terminal was caught up in the conflict between Ukrzaliznytsia and the intermediary company. Consequently, it couldn’t process wagons, which resulted in the accumulation of 16 trains with dozens of wagons at the Mykolaiv-Vantazhny station and on its way there.
However, Ukrzaliznytsia decided to collect the fee for the downtime of the wagons and the storage of cargo in them from the port terminal as the final recipient, which was allegedly responsible for the shutdown of the monopoly intermediary and the inaction of the monopolist Ukrzaliznytsia, for which 16 claims totaling over UAH 17 million were filed in 2020 against the port operator.
Ilyashev & Partners’ Odesa Office represented the port terminal in 16 court cases over almost four years. In reviewing all the claims, the Commercial Court of Mykolaiv Region within different court compositions accepted the grounded legal position of Ilyashev & Partners’ team and rejected Ukrzaliznytsia’s claims.
Specifically, in its judgment dated 09 September 2024, the court agreed with the port terminal’s allegations that ‘the downtime of the disputed wagons occurred due to the claimant’s own actions. […] Under such circumstances, the court concluded that the claimant had not proved the validity of the claims, and therefore the claims should be rejected.’
By refusing to appeal the court decisions, Ukrzaliznytsia confirmed that each of the 16 court verdicts was legal and valid.
“The judgments in this case can be regarded as precedent since there is no relevant court practice in Ukraine on similar disputes,” said Sergey Nedelko, Attorney at Law, Counsel and Head of Odesa Office. “For foreign investors, the court judgments are also indicative. In times of war, Ukraine’s investment attractiveness is largely due to its guarantees of protection for private investors’ rights, particularly when dealing with state monopolies.”
The case was handled by Sergey Nedelko, Attorney at Law, Counsel, Head of Odesa Office, and Valeriia Gudiy, Partner.