On April 22, M. Saakashvili stated during Ukrainian Infrastructure Forum’16 in Kyiv: “I proposed to initiate a mediation. Vasyl Kysil was appointed as a mediator and his decision will be the final decision for our administration and for both companies... it will have the power of an administrative decision.”
… In 2013, Swiss investor, Allseeds Black Sea company commissioned vegetable oils terminal with a 45 000 m3 capacity in Yuzhny port, and in 2015 - a multifunctional oil-extracting plant with 2400 tons per day sunflower seeds processing capacity. The next stage in the company’s large-scale investment project until 2021 would be raising capacity of processing oil crops up to 10 000 tons per day and simultaneous construction of its own berth with a terminal for exports of oils, own and partner companies’ oilcakes and grains. Total investment would account for up to $600 million.
At the opening ceremony of the enterprise on July 16, 2015, M. Saakashvili, head of Odessa Regional State Administration said: “... in Ukraine, the sea ports market is monopolized - owners of private berths work under a cartel agreement and do not let other companies enter the market. This complicates investment into the region, raises the prices of goods prices and creates problems for operational efficiency.” He demanded that Ukrainian Sea Ports Authority allow Allseeds construct berths in Yuzhny port, saying: “Please give this plant a permit for [construction of] a berth, we will find land. But please stop protecting petty mafia that had always operated here all the time. Give the berth and the opportunity to enter to those who invest real money and create real jobs.”
In July 2015, in order to implement its investment plan the company approached Odessa Regional State Administration asking to approve development of a land management project for construction of the aforementioned port infrastructure facilities.
However, in violation of the current legislation of Ukraine, Swiss investor - Allseeds Black Sea company - has not obtained such an approval, and hence an opportunity for further investment up until now. Instead, coastal land for three free berths (No. 11, 12, 12-a) were in late 2015 hastingly given by Odessa State Regional Administration to LLC Energo Product Ltd, a company affiliated with Oleh Bakhmayuk. Before that, another enterprise owned by him obtained land for construction of two berths No. 25 and 25-a in Yuzhny port.
After that, Allseeds Black Sea company, committed to transparency and openness in its actions, was forced to defend its interests through court.
Court proceedings with regard to the disputed land plots in Yuzhny port that took place in 2016, have fully proved that Allseeds Black Sea’s legal position is justified, as well as upheld its unquestionable right to obtain the land plot.
1. Upon the request filed by Allseeds Black Sea, Commercial Court of Odessa Region ruled on June 29, 2016 with regard to the case No. 916/1237/16:
To declare as illegal and cancel the decision No. 90-VII of December 29, 2015 adopted by Vyzyrka Village Council of Kominternivskyi district of Odessa region “On approving land management project and providing a long-term lease (49 years) of a land plot to LLC Energo Product Ltd for the purposes of construction, service and operation of engineering and transport infrastruture facilities of the sea transport in the territory of the village of Vyzyrka of Vyzyrka Village Council of Kominternivskyi District of Odessa Region.
To declare as null and void onwards the lease agreement regarding the land plot (cadastral No. 5122780500:01:003:0448), located in the territory of the village of Vyzyrka of Kominternivskyi district of Odessa region, of 5,4942 hectares, concluded on January 18, 2016 between LLC Energo Product Ltd (identification No. (according to the Unified State Register of Enterprises and Organizations of Ukraine): 32497213, location: 67550, 34 Odesko-Mykolayivske highway, Novi Biliari, Kominternivskyi district, Odessa region) and Vyzyrka Village Council of Kominternivskyi district of Odessa region (identification No. (according to the Unified State Register of Enterprises and Organizations of Ukraine): 04378669, location: 67543, 56 Chapayev st., village of Vyzyrka, Kominternivskyi district, Odessa region).
2. Upon the request filed by State Enterprise «Ukrainian Sea Ports Authority» (third party - LLC Allseeds Black Sea) and with participation of the Office of the Prosecutor General of Ukraine, Odessa Administrative Court of Appeal ruled on June 1 of 2016 on the case No. 815/13/16:
To cancel the order of Odessa Regional State Administrion of 13.11.2015 No. 773/A-2015 “On providing a permit to LLC Energo Product Ltd for development of a land management project on the 49-year lease of the land plot for the purposes of construction and use of buildings and sea transport facilities in the territory of village council of Novi Biliari of Kominternivskyi district of Odessa region (beyond the limits of the village).
To cancel the order of Odessa Regional State Administration of 16.01. 2916 No. 21/A-2016 “On leasing a land plot to LLC Energo Product Ltd for 49 years for the purposes of construction of buildings and sea transport facilities in the territory of village council of Novi Biliari of Kominternivskyi district of Odessa region (beyond the limits of the village).
3. In accordance with the results of the mediation proposed to the parties in the dispite by M. Saakashvili, head of Odessa Regional State Administration himself, and carried out by an authoritative Ukrainian lawyer Vasyl Kysil in compliance with the European mediation practice (Directive 2008/52/EC of the European Parliament and of the Council on Certain Aspects of Mediation in Civil and Commercial Matters, 21.05.2008), the motives for Odessa Regional State Administration’s actions when it refused to concede the land plot to Allseeds Black Sea (absence of servitude agreements), is “totally groundless and unsubstantiated”. Concession of land to LLC Energo Product Ltd that filed a similar request 1,5 month later than Allseeds Black Sea “bears signs of anti-competition actions on the part of Odessa Regional State Administration that provided LLC Energo Product with anti-competitive advantage.”
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On April 22 of 2016, M. Saakashvili said at Ukrainian Infrastructure Forum’16 in Kyiv: “I proposed to initiate a mediation, ...both parties agreed. Vasyl Kysil who, in my opinion, is the most authoritative lawyer in Ukraine, and the most integrious among those I have met, … was appointed as a mediator and his decision will be the final decision for our administration and for both companies. Mediation will produce a result and... it will have the power of an administrative decision.”
The mediator of the dispute, Vasyl Kysil who is, by a twist of fate, his professor, urges the same. In his Report, he mentions:
“Reaching a compromise and agreement between the parties is possible, but for that Odessa Regional State Administration must act not as an observer, but as a party interested in a just, legal, competitive solution of this problem, guided by the national… investment interests.”
Allseeds Black Sea hopes that M. Saakashvili, head of Odessa Regional State Administration will follow these recommendations as soon as possible, as well as fulfill the promises he gave in his bold statements.
He has got every reason to do so!
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