You're reading: Swissport exits nation after losing legal war

On Nov. 26, Ukraine's Supreme Court on Economic Affairs legitimized Ukraine International Airlines' purchase of a 70.6 percent stake in Swissport Ukraine, an airport service and cargo handling company that used to be a joint venture of both entities. It is now named Interavia.

UIA reached a deal on paying $433,000 for the shares in 2013, following the first court decision on this case that supported its side. Industry analysts say the fair price was $25 million.

Swissport appealed the initial ruling, succeeded, but then court took UIA’s side again. Industry players say Ukraine International Airlines – which has near-monopoly status in the nation – is owned by Dnipropetrovsk billionaire Igor Kolomoisky.

After the loss, Swissport announced in a statement that it is leaving the Ukrainian market.

“The court proceedings and the outcome of these proceedings clearly show that, unfortunately, the legal system in Ukraine is not up to international standards and the decisions taken were biased,” said Mark Skinner, Swissport’s senior vice president. “This is one of the reasons for Swissport warning international companies from doing business in Ukraine until this issue is resolved so they do not become the victim of a raider attack.”

Meanwhile, Ukraine International Airlines calls the decision a triumph of justice and a “legitimate way for the minority stakeholder to protect its violated equity rights.”

Swissport tried writing letters to President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk in November, calling their attention to the case, but received no intervention.

Andriy Guk, an expert on aviation law with Marchenko Danevych firm, called the case a “shame for our judicial system and for Ukraine as a whole.”

“The parties did not have any negotiations of the terms beforehand,” he said. “It will be a pity if Swissport doesn’t appeal to the international courts. It could sue and win the case in the investment arbitrage against the state of Ukraine, whose actions led to the loss of investments by the foreign investor.”

Kyiv Post staff writer Olena Gordiienko can be reached at [email protected]