OREANDA-NEWS. October 12, 2010. During the court hearing on the lawsuit against the State Property Fund of Ukraine (SPFU) and ArcelorMittal Kryviy Rih on October 5 the main result was an appearance of a representative of one of the plaintiffs – the Cabinet of Ministers of Ukraine.

The representative stated that the Cabinet of Ministers does not support the lawsuit as there have been no violations of the interests of the Ukrainian state. The lawsuit was initiated by the prosecutor precisely in the name of the entities of the Ukrainian state.

This basically means that in the opinion of the Cabinet of Ministers of Ukraine, the additional agreement, signed by ArcelorMittal and the SPFU, that is being currently questioned in court, does not violate the interests of the state.

This basically destroys the attempts of the prosecutor to launch the reprivatization process at Kryvorizhstal.

Nevertheless, despite the fact that the prosecutor’s lawsuit was not supported by the Cabinet of Ministers, the court continued to consider the case.

ArcelorMittal wishes to point out that that this damages the legal basis for the prosecutor’s lawsuit. Moreover, as no violations were committed in signing the Additional agreement, as was confirmed both by the SPFU and the Cabinet of Ministers’ representative, it is unclear whose interest the prosecutor is protecting in this case.

In other regards the second court hearing went according to expectations: the judge rejected both motions of the defendants – about transfering the case to the International Court of Arbitration and about suspending the case because a similar case is currently being considered in the Administrative court.

The first motion was based on the Sale and Purchase Agreement provisions stating that all disputes should be handled at the International Court of Arbitration (ICA) at the Chamber of Commerce of Ukraine (CCU). Contrary to the provisions of the SPA, the General Prosecutor’s Office files its lawsuit not to the ICA, but to the Commercial court. Despite the objections of most of the parties in the case, judge Oleh Khrypun refused to cancel the case, which is a serious violation of Ukrainian and international law.

Further motions by ArcelorMittal for providing enough time to prepare and providing the foreign defendant enough time to prepare for the court hearing were also rejected or only formally noted.

In the view of ArcelorMittal a trend is becoming obvious in the way the case is being handled: the judge is consistently refusing to agree all the monitions of the defendants, regardless of the substantial proof provided about existing violations of the law.

We can only see this as evidence that the judge is following a pre-approved plan. The following national and international laws have been violated: the European convention on foreign trade arbitration, the New York convention on admitting and fulfilling of foreign arbitration decisions, the Laws of Ukraine “About international agreement of Ukraine”, “About international commercial arbitration” and of a whole list of procedural norms.

The judge announced a break until 12 of October. At the next court hearing the parties will announce their position regarding the case and will submit proof.

Judging from the speed with which the case is being handled, we cannot exclude that 12 October will start the process of launching a pre-conceived and illegal return of the enterprise into state ownership with further re-sale of it to a new owner, as well as the beginning of a totally new era in relationship with investors.