BUSINESS BEYOND POLITICS: How Arricano works to return the Sky Mall shopping centre
1. Can business in Ukraine be beyond politics?
2. Who guarantees supremacy of law in Ukraine: desirable and actual life;
3. Changes in development of business sector in Ukraine after Euromaidan – positive and negative sides;
4. Investment climate in Ukraine: past, current and future;
5. Types of approaching the decisions of the International Court of Justice in Ukraine.
To the discussion were invited real estate market traders, experts, journalists, lawyers and political scientists.
They say much in Ukraine these days about the governmental model, when business is responsible for development, generates financial currents and pays taxes, while the government guarantees the rule of law and material rights of entrepreneurs, plus politicians who conduct reforms. But what has changed recently? Is there any progress in a fight against corruption? What effective decisions have been adopted? How do the politicians encourage the realization of government reforms, for example in judicial system and registration service in order to develop business in Ukraine and to invite new foreign investments?
What do opinion leaders think concerning these questions:
Petro Poroshenko, the President of Ukraine, about the implementation of judicial system (from his speech at the National Board of anti-corruption policy).
“…In order our courts to root the corruption out mercilessly, they have to be cleansed from corrupt officials. As for today the detailed mode of life monitoring, prescribed by the law, declaration filling and submissions, declaration on sibling connections, control by Public council – all these elements let us see definitely , that in the closest future we will have effective judicial system, the one Ukrainian people will trust…”.
Chimyao Fan, the director of the World Bank concerning Ukraine, Belarus and Moldova, about Ukrainian economy perspectives, potential risks and positive factors (from the Abridgement of speech at the European business Association meeting “Investment climate of Ukraine: worldwide view”)
“Ukraine owns a third of the world’s black earth. It has a great geographical position: a proximity to solvent European market, huge transit potential. And the most important thing: Ukraine has plenty of talented and educated people. But governmental institutions work really bad.”
Mikhail Merkulov, CEO Arricano Real Estate Plc, about the research on the investment climate of Ukraine by US Chamber of Commerce
“US Chamber of Commerce while the preparation to annual issue of “Ukraine: economic outlook - 2016” made a research on investment climate of Ukraine. It was noted in the report, that the members of Chamber met a problem number one for leading an effective and transparent business in Ukraine – it’s corruption. Except for corruption, problems are caused by governance system (16%), and considerable bureaucratization (9%). The members of Chamber believe, that the way to solve the last one is in the simplification of communication system between business and government bodies via implementation of electronic services at all stages of information exchange. Namely by introducing the automation of registers and departments, information centralization and common public access. Business is to encounter alternation in taxation policy (73%), customs regulations (64%), policy of law (62%), healthcare (61%) and investment policy (53%)”.
Yaroslav Gregyrchak, deputy of business-ombudsman: “In the usage of business-ombudsman mechanism we see a definite dependence in the world: the less corrupted the country is, the better work courts and the rule of law principle, the less actual becomes the usage of ombudsman institution as a mechanism to dispute settlement. Why? Because the traditional mechanisms work better there. ”
Mikhail Merkulov, CEO Arricano Real Estate Plc, about economy and politics: “I take as primary the economic interest for the country development in comparing with the politics. The politics has to be built out of economic interests of the country, as the higher the dynamics, indexes and development perspectives, the more stable the country is. Politics is a tool for economy development. Unfortunately, Ukrainian politicians work vice verse, on the basis of their populist motivation. They quite often present modification programs, but never fulfill the promise. Double standards in politics exceed risks. And when the political risks in a country are high, investments don’t come. Business wants some guarantees as for property rights, which become impossible when the primacy belongs to political interests in the country but not to the economic objectives”.
Oksana Karel, LL.M. Senior Associate, Head of international litigation and arbitration disputes at Lawyer association Arzinger: “Practice shows that in recent years Ukrainian business more and more prefers foreign courts and international commercial arbitration, trying to protect their economic interests ant the rule of law in this way, avoiding Ukrainian legal system and justice system. It concerns both private and commercial disputes, including corporate and investment protection in accordance with interstate agreements. In particular, the latest statistics of the London Court of International Arbitration in 2015 shows that 3.1% of all new cases were the cases as for Ukrainian business. At the same time, Ukraine attempts to transform national legislation and reforms the judicial system. Today at the legislative level is in the process of automatism improvement of dispute resolution and the rule of law. "
Evgen Maleev, a lawyer, the head of the legal group Arricano Real Estate Plc, about cases of decision implementation of international courts in Ukraine:
“Objectivity and impartiality of the London international arbitration is beyond doubt in the whole world. The difficulty is in the desire of the state to prevent the execution of these decisions in Ukraine and to provide the opportunities to preserve assets for the period of the trial abroad. One of the main problems is the lack of opportunities for the period of arbitration abroad to get real security measures in Ukraine. The arbitration process lasts for months and, in some cases, can last for years. In our reality without the ability to freeze the situation and assets in Ukraine pending the arbitrator's decision to sue may be already for nothing. In this regard, our example of the Sky Mall shopping centre becomes exponential. For every positive decision abroad coincided with the movement of assets in Ukraine. The difficulty of obtaining provisional measures in the Ukrainian courts and the quality of their performance is just the opposite – it contributes to the practical impossibility of implementing the decisions of international courts. "
Vyacheslav Peskov, a lawyer: “The conflict around the Sky Mall shopping centre showed those systemic weaknesses of judicial and law enforcement system, which had to be eliminated as a result of lustration processes. Unfortunately, we continue living in the system with the dominant policy of pressure on the judiciary, the police and the prosecuting authorities. The conflict around the Sky Mall shopping centre exhibited how Ukrainian courts can arrive with a decision in favor of persons who didn’t even sue; how the investigating authorities take the officials as “hostages" of one of the conflicting sides, opening cases with criminal proceedings and then suspending them indefinitely, use it as a bargaining chip in commercial negotiations. It is difficult to imagine that Ukraine can attract foreign investors in such situation, and thus the state is obliged to make real steps aimed at improving the transparency of all state bodies, and first of all, the law enforcement system.”
Sergii Deledyvka, a lawyer, Partner of the company “Yustem”: The principles of opening a corporate veil are also cross-functional and comprehensive in the protection of rights - one of the reasons why big Ukrainian business chooses British jurisdiction”.