Justice Minister proposes Government and Vanco Company "to balance interests" in order to avoid hearing at Stockholm arbitration

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Interests of the Government and Vanco should be balanced in order to avoid court actions on the part of this company versus Ukraine, Justice Minister Mykola Onishchuk told a press conference.

According to N. Onishchuk, nobody can make the Cabinet to fulfill the terms of the agreement with this company concluded against its will. But risks should be also taken into consideration that may arise in case of the agreement termination related to violation of obligations by another party. Vanco then may demand satisfaction of its interests in the court, including payment of damages due to nonfulfillment of the agreement, the minister said.

Having referred to the opinion of the Interdepartmental Commission on Settlement of Differences with Vanco International Ltd., Onishchuk noted that the Government has no arguments in favor of the fact that Vanco failed to fulfill its obligations. In other words, there are no grounds for termination of the agreement.

M. Onishchuk noted that in his opinion the Government's step towards "balancing" interests of the Cabinet and Vanco will be reasonable at the present stage, "in order to avoid court mechanisms provided by the agreement, since the matter concerns the Stockholm Arbitration Institute".

As UKRINFORM reported, Prime Minister Yulia Tymoshenko did not agree to the opinion of the Interdepartmental Commission on Settlement on Differences with Vanco International Ltd. The Premier continues to assert that "the Ukrainian Government withdrew from the corruption agreements concluded by the previous Government" and that the agreement with Vanco is an "interstate corruption".

In 2006, Vanсo International Ltd. won the first public tender and concluded an agreement with the Ukrainian Cabinet in October 2007on sharing products to be produced in the Prykerchensky sector of the Black Sea continental shelf.

Vanсo International then handed over the right to develop the shelf to Vanco Prykerchenska Ltd.

On April 25, 2008, the Environmental Protection Ministry cancelled a license of Vanco Prickerchenska Ltd. to develop the shelf. Vanco then started the international arbitral procedure versus Ukrainian Government and stated that it considers annulment of the license to be unlawful.

On May 21, the Cabinet at its meeting adopted a decision about unilateral withdrawal from the agreement with Vanco on products sharing.

On June 18, the President by his decree suspended operation of the Government's instruction of May 21, which terminated the agreement, and set up an Interdepartmental Commission on Settlement of Differences with Vanco International Ltd.

The President's presentation on whether the present instruction of the Cabinet complies with the Constitution is under consideration of the Constitutional Court.

UKRINFORM