You're reading: Swissport making second high commercial court appearance to recover cargo handler from Ukraine International Airlines

Geneva-based Swissport International, a leading airport ground and cargo handling company, is heading to the nation's highest commercial court – again. 

On Sept. 25 it lost an appeals case that is going through a repetitive round
of hearings in an effort to regain its estimated $25 million local airport and
airline servicing company that it lost to its erstwhile partner, Ukraine
International Airlines.

In earlier statements to the Kyiv Post, Swissport called the takeover of
its local majority-held aviation industry service provider a “hostile raider
attack,” and suggested its alleged owner, billionaire Dnipropetrovsk governor
Ihor Kolomoisky, is behind it.

Swissport’s senior vice president Mark Skinner told the Kyiv Post over
the phone on Oct. 3 that Kolomoisky indicated to him that he was the airline’s
major shareholder during “two to three meetings” they had in Geneva.

UIA has claimed ignorance of the billionaire’s alleged ownership of the
nation’s flagship airline in numerous public statements, some of which were
given by the airline’s president,
Yuri Miroshnikov. It says it has exercised its minority shareholder rights in the corporate spat within the confines of legislation.

After losing last week’s appeals court ruling, Swissport on Oct. 3
announced it would appeal the case to the Highest Commercial Court, nearly a
year after the same judicial body cancelled lower court rulings and sent the
corporate quarrel back to the lowest court to be heard anew.

UIA took over Swissport’s 70 percent stake in local ground and cargo
handler Swissport Ukraine in a March 2013 court ruling, paying just $400,000
for it. Litigation started in late 2012. In
December of that year, after an initial court ruling, Ukraine’s anti-trust body
allowed UIA to buy the stake in the share capital of Swissport Ukraine.
In March 2013 a higher court ruled in favor of UIA, after which the airline
acquired complete ownership of the former joint venture, rebranded the company
as Interavia, and injected $1 million in what Swissport said was an “obvious
goal of diluting” its shares should the cargo handler win subsequent legal
proceedings.

Skinner said that ahead of the next court case, which should decide the
fate of their former joint venture, Swissport will go on the offensive. Skinner
said it will lobby the support of European Union bodies, as well as the Swiss embassy
and the French embassy – the company is owned by France-based private equity
firm PIA.

“We are going to do quite a bit of lobbying…there should be a different
decision in the highest economic (commercial) court,” said Skinner.

In turn, UIA has described Swissport’s lobbying efforts as applying
pressure on Ukraine’s courts. The airline has given limited responses to Kyiv
Post inquiries on grounds that legal proceedings are ongoing.

UIA corporate press secretary
Evgeniya Satskaya told the Kyiv Post in late September that the airlines “does
not comment on lawsuits prior the cases’ termination.” She added that “the
court judgment in question (of Sept. 23 regarding a side case in the corporate
dispute) is an interim stage of the economic dispute between UIA and Swissport
International. We uphold the right to possess and control the Interavia
handling operator. The contested case hearing will be continued.”

When
asked to explain the company’s lobbying efforts, Skinner said, “we think the judicial
process hasn’t been open and fair; it is about fact-based informing. We also
expect that in return, we hope that talking about it helps to get awareness. We
don’t want to play games.” 

The airlines maintains that its minority shareholder rights in the local
cargo handler that they jointly owned were violated.

The row between Swissport and UIA dates to March
6, 2012. UIA alleges on that day that Swissport had voted to dilute UIA’s
minority stake in their joint venture during a shareholders’ meeting.
Meanwhile, Swissport countered that it had merely proposed the share dilution
in exchange for pumping additional cash into their business to sustain
double-digit growth only after the airlines had refused to contribute its
respective share of the money.

“UIA
struggles from the beginning with the ability to meet their pro rata share
obligations,” stated Swissport in a Oct. 3 news release.

When
Swissport Ukraine was taken over, according to company Senior Vice President
Mark Skinner, the company was handling 50 flights a day for Kyiv’s Boryspil
International Airport and had operations in the capital’s Zhyliany Airport and
Kharkiv Airport. By the summer of 2013, the company had planned to hire an
additional 200 people, to reach 1,000 employees in Ukraine.  

Swissport still has plans to
remain in Ukraine one way or another. If it loses the upcoming court case,
according to Skinner, Swissport has plans to re-enter the market “in whatever
form.”

It has also offered
UIA to re-establish the joint venture, this time with Swissport having a 51
percent stake instead of the previous 70 percent, according to Skinner. “”They
(UIA) declined the offer,” he said. 

Kyiv Post editor
Mark Rachkevych can be reached at [email protected].