Date of publication: 30 March 2016
Mykola Burtovyi, Attorney at Law
Source: Ukrainian News
Amendments to the legislation regulating privatization adopted by the Verkhovna Rada reduced the risks of legal blocking of the privatization. It was reported to the Ukrainian News by Mykola Burtovyi, attorney at law at Ilyashev & Partners Law Firm.
He recalled that in February 2016 the Parliament adopted the Law “On amendments to some laws of Ukraine regarding improvement of the privatization process”.
In the lawyer’s opinion, the main purpose of the law is removal of any legal entities or individuals – residents of the aggressor state, or entities controlled by them, as well as companies which are subjected to sanctions by Ukraine, from participation in privatization.
Thus, the Russian companies are not admitted to privatization directly or indirectly.
However Burtovyi emphasizes that the law inter alia actually changed the jurisdiction of disputes regarding privatization by adding part ten to Art. 27 of the Law, according to which disputes between the seller and the buyer in connection with the agreement on sale and purchase of the privatization object, or on the basis thereof, will be referred to the competence of the International Commercial Arbitration Court.
In this case, if the parties have not agreement on the choice of a particular court, any dispute or claim regarding conclusion of the agreement on sale and purchase of the privatization object or connected with it, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.
“Therefore, the lawmaker tried to eliminate possible risks of blocking the privatization process in the Ukrainian courts by dissatisfied or unfair participants of the privatization process. In our opinion, it must increase credibility of the international investor when deciding to take part in the privatization “in the Ukrainian style”, notes Burtovyi.
The lawyer also identified three major innovations in the law.
Firstly, now when filing the application for participation in the privatization, a prospective buyer must provide information about the financial condition – his and the persons in whose interests he intends to acquire the state-owned objects.
Secondly: to avoid division of blocks of shares and accelerate privatization processes they abolished rules on mandatory offer for sale on the stock exchanges of blocks of shares of joint stock companies of groups В and G in the amount of 5-10% of the share capital before bidding.
Finally, the rule on the possibility of engaging advisers – auditors, lawyers and other persons who prepare the object for sale was specified. The lawmaker noted that the advisers will be engaged according to the procedure approved by the government. The selection criteria and the specific functions of advisers were introduced. Engagement and appointment of advisers will also be the responsibility of the Cabinet of Ministers. It is noteworthy that services of advisers, except from the state budget, can now also be financed by international organizations.
The Ukrainian News reported that the State Property Fund expects to announce the tender for sale of 99.6% shares of Odessa Portside Plant (Odessa region, OPP) in May.