The High Court of Justice has upheld the LCIA ruling to permit Arricano to buy out stake in SkyMall shopping centre
On 22 October 2015 The High Court of Justice rejected the appeal by Stockman Interhold S.A. to overturn the decision previously awarded by the London Court of International Arbitration (LCIA). In its judgement on 19 August 2014, the LCIA ruled in favour of Arricano Real Estate plc in a dispute against Stockman and decided that the former was entitled to exercise its rights to a stake buyout in a joint company owning SkyMall.
On 19 August 2014 LCIA upheld Arricano’s claim and reinstated its right to buy majority stake in the project on the basis of 2010 agreement. However, already in September 2014 the ownership rights structure of the company was meddled with – 100% of the owner’s corporate rights were twice transferred to third parties; SkyMall ownership rights were turned over to Pivdenniy Bank under the clause of “due to $32 mln outstanding arrears”, finally, the shopping centre was re-mortgaged to a Dutch company. These steps were taken to obstruct the implementation of the LCIA ruling in Ukraine. The indebtedness to the Pivdenniy Bank was created artificially with the sole purpose to withdraw the sole valuable asset from the company.
Arricano’s CEO Mikhail Merkulov points out that it is of paramount importance to a foreign investor to have its rights protected by official authorities in Ukraine. “Regretfully, today the problems of corruption among Registrar officials, Public Prosecution office as well as illegitimate decisions of Ukrainian courts in SkyMall dispute mirror the deficiencies and loopholes in the Ukrainian legal system and reflect the adversities faced by foreign investors. Evidently, these facts call for the closest scrutiny by those in power, and require specific legal measures to establish a favourable investment climate in Ukraine”.