Court rejects Astarta's motion seeking USD 338 thou. seizure lifted in Agrostudio Group's lawsuit – UPDATED

The Kyiv Court of Appeal refuses a motion by Astarta-Kyiv subsidiary, Eco Energy Ukraine, to lift the seizure of USD 338,400 in a lawsuit filed by Agrostudio Group.

On 13 May 2021, Eco Energy Ukraine filed a motion with the Kyiv Court of Appeal to revoke the measures to secure a suit issued by the Court on 29 April 2021.

Agrostudio Group and Eco Energy Ukraine entered into a forward agreement on 21 February 2020 to supply 10,000 t of 3rd class corn at 162 USD/t. However, as of April 21, 2021, Eco Energy Ukraine failed to deliver the corn under the contract. Thus, the court upheld the claim of Agrostudio Group and seized USD 338.4 thou. and 10 thou. t of corn.

"Eco Energy Ukraine justifies its claim by arguing that there is currently no need to secure the claim and that there are grounds for cancelling the measures taken, as the security for the claim is unreasonable, disproportionate and not supported by any proper and admissible evidence," the court files read.

Eco Energy Ukraine states that the court's conclusion regarding the fact that the company was taking measures to sell the 2020 harvest corn was premature.

Eco Energy Ukraine's representative notes in the petition that there is indeed a dispute between the company and Agrostudio Group. The case is currently being considered by the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (the ICAC), and a final decision has not been made.

Having considered the arguments of the motion to cancel the measures securing a suit, the Kyiv Court of Appeal refused.

Astarta-Kyiv told Latifundist.com that this court decision of 18 May 2021 is interim and the company appealed to the Supreme Court.

Astarta-Kyiv statement provided by the Director for Legal Issues Liliya Timakina:

"Astarta-Kyiv, as well as all its subsidiaries, strictly complies with legal requirements, and even in cases of unfair practices on the part of our competitors. Agrostudio Group Limited application to the court to seize Eco Energy Ukraine's accounts pending resolution of the dispute is essentially a way to force the company to pay fines and penalties for violations that Eco Energy Ukraine has not committed.

Unfortunately, the Kyiv Court of Appeal, having grossly violated the requirements of procedural law by not giving an appropriate assessment of any of the evidence presented by us and not applying the counter obligation to Agrostudio Group Limited, which in this case is mandatory under the law, upheld the arrest of USD 338 thou.

This court ruling has already been appealed to the Supreme Court, which, in this case, is essentially the court of appeal and is authorised to review the lawfulness and legality of the seizure by the Kyiv Court of Appeal.

We consider the decision of the court to refuse to satisfy our application to be illegal and biased because on 6 May 2021 the Kyiv Court of Appeal (a different judicial panel) having analysed similar documents submitted by us concluded that the arrest was cancelled and there were no reasons to introduce any interim measures at the request of Agrostudio Group Limited.

I would also like to mark the fact that the Agrostudio Group Limited dispute will only be considered by the Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry. Hearings on the merits of the case have not yet started.

I consider both the account seizure and the PR campaign unfolded by Agrostudio Group Limited as abuse of its rights, an attempt to put pressure on us.

Arbitration will put an end to the dispute. I firmly believe that we have sufficient arguments to obtain a ruling in favour of our company, as well as evidence that it was Agrostudio Group Limited failure to fulfil its obligations that caused us to terminate the contract."

As a reminder, in mid-April 2021, the Kyiv Court of Appeal seized USD 434,700 in funds of Eco Energy Ukraine according to a lawsuit filed by Agrostudio Group. Astarta's Director for Legal Issues Liliya Timakina provided the company's official statement on the matter.

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