Archive for May 29th, 2011


A French victory in the Ukrainian courts

May 29, 2011

Just to go against the popular sentiment once again dear readers, a French company has just won a business dispute in the Ukrainian courts.

In the past year or two, foreign victories in Ukrainian courts seem to be more and more frequent despite the western media doing its very best to portray Ukraine as the wild-wild east.

This time it was French bank CIB Credit Agricole who went up against one of Ukraine’s biggest company’s, TMM Ukraine owned by the rather affluent Mykola Tolmachev. Most of us, dear readers, would be happy to be only a $ few million behind him.

The incident comes about relating to bank loans and repayments. There are various figures floating around the Ukrainian media relating to the size of the outstanding amount, from $600,000 to $750,000. I am fairly reliably informed that the actual figure is just over $800,000.

Whatever the figure, the repayment is not going to hurt TMM Ukraine when it comes to balance sheets or interruptions in operating cash availability I am told. One can only assume that it will make it harder for TMM Ukraine to borrow from banks externally of Ukraine in the future however and borrowing internally of Ukraine results in ridiculous interest rates, so maybe a longer term faux pas on behalf of TMM Ukraine.

Anyway, whilst the result is not necessarily that helpful to TMM UKraine, it will certainly be helpful to Ukraine itself as this is yet another case where the courts have ruled in favour of the foreigners.

I am not the only one to think that way either. Jacques Mounier of CIB Credit Agricole, Kyiv obviously thinks the same way. He stated “It would have been wiser for Mr. Tolmachev not to enter into such litigation against our bank, a litigation which ridiculed himself, his businesses TMM, Sintal, and that, even if, eventually, he was not successful, tarnished Ukraine. We believe that such a judgment is good news for CIB Credit Agricole, but even more for Ukraine, and is a booster for the investment climate.”

Quite right! Whilst $800,000 is not a lot of money to either party, there was a principle at stake and the rule of law came through in Ukraine without interference and with a just result.

Unfortunately this tale of justice in the Ukrainian business world will undoubtedly not make it to the western media as news like this just doesn’t sell newspapers does it. It is though, yet another case I can cite to those who are interested in coming to Ukraine to do business but are wary as they believe all they read in the press.

It seems like a good news day in the business world involving Ukraine. This comes on top of the scrapping of opaque grain quotas and the imposition of transparent export duties instead. Another little shuffle by the State in the right direction.

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