Ilyashev & Partners Successful for Danube Shipping and Stevedoring Company in Dispute with Ukrainian Sea Ports Authority

Ilyashev & Partners Successful for Danube Shipping and Stevedoring Company in Dispute with Ukrainian Sea Ports Authority

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Ilyashev & Partners has successfully defended the interests of Danube Shipping and Stevedoring Company LLC in a dispute with the Ukrainian Sea Ports Authority over the use of the berth and berthing infrastructure at the Mykolaiv Sea Port.

According to Ilyashev & Partners, "the dispute ... arose in connection with the supplement introduced by the Resolution of the Cabinet of Ministers of Ukraine No. 483 dated 07.07.2015 to the List of Specialized Services Provided in the Sea Ports by the Subjects of Natural Monopolies with a new specialized service for the port operator’s access to the berth. The tariffs for specialized service, approved by the Government and the Order of the Ministry of Infrastructure of Ukraine No. 541 dated 18.12.2015, were supposed to increase USPA revenues by 7-10 times as compared to the revenues received from the servitude agreements."

"By the end of 2015," Ilyashev & Partners reports, "at the request of USPA, most port operators switched from the servitude agreements to a specialized service. However, the Danube Shipping and Stevedoring Company refused to terminate the existing servitude agreement and sign unfavorable special service agreements. To this end, back in 2016, the USPA initiated several lawsuits demanding termination of the servitude agreement, as well as inducement to amend the agreement in terms of servitude fee increase. Based on the results of a 2-year review, the courts of three instances dismissed all claims filed by USPA as groundless.

According to the firm, "in August 2019, USPA received a recommendatory explanation from the Antimonopoly Committee of Ukraine, which concluded that the use of berths under the servitude agreement 'may lead to a violation of antimonopoly legislation,' since the servitude fee is less than the cost of a specialized service. Claiming that the execution of the servitude agreement 'may jeopardize the interests of the State,' the USPA filed a new claim to terminate the servitude. By its Resolution dated 13 August 2020, the South-West Economic Court of Appeal has again confirmed the USPA’s claims to be groundless and unproven. Upholding the decision issued earlier by the first instance court, the court concluded that the port has no right to claim termination of the servitude agreement referring to changes in the government regulation and procedure for payment of tariffs for the port services."

The Ilyashev & Partners team was supervised by Senior Partner Roman Marchenko and Partner Oleksandr Fefelov and included Counsel Andrii Konoplia, Attorneys at Law Sergey Nedelko and Oleksandr Denysenko, and Lawyers Oleksiy Gorbatyuk and Yevheniia Makarenko.