Ukrtelecom parent's asset freeze revoked in Cyprus court, but legal battles continue

14 Jun 2018

A court in Nicosia, Cyprus, has withdrawn an asset freeze on Ukrainian conglomerate SCM – parent of Ukrtelecom – imposed in December 2017, reported. The ‘arrest’ of assets had been prompted by a lawsuit from Raga Establishment (formerly Epic Telecom Invest) in relation to the plaintiff’s claims on unpaid money from SCM’s purchase of Ukrtelecom in 2013. In the latest ruling the Cypriot judges decided that as the dispute was ongoing since September 2016, the urgent freezing of assets was unjustified whilst SCM should have the right to be heard before any final decision.

Raga’s legal battle versus SCM – controlled by Ukrainian tycoon Rinat Akhmetov – continues, however. Last month SCM lost an appeal at the High Court of London against an arbitration decision related to its 2013 Ukrtelecom takeover; in June 2017 the London Court of International Arbitration ruled that SCM owed USD760 million in unpaid debt from the transaction to Raga Establishment plus USD60.4 million in interest and legal costs.

Separately, a Ukrainian court case which could ultimately lead to the renationalisation of Ukrtelecom has been suspended for an unknown period due to an Akhmetov-led petition to remove one of the judges involved on the grounds of non-impartiality, the Kyiv Post confirmed. In October 2017 the Kyiv Economic Court invalidated Ukrtelecom’s original March 2011 privatisation agreement and called for the return of the telco into state hands with no compensation to current owner SCM, which lost its Court of Appeal case against the ruling in December 2017. Following a further appeal from SCM, the case currently resides at the Supreme Economic Court of Ukraine.

Ukraine, Ukrtelecom (incl. TriMob)