Economy 2023-01-15T08:50:08+02:00
Ukrainian news
International Arbitration Tribunal Orders Ukraine Pay UK's JKX USD 12 Million Damages

International Arbitration Tribunal Orders Ukraine Pay UK's JKX USD 12 Million Damages

Ukraine, arbitration, tribunal, gas, oil, UK, JKX Oil & Gas Plc, mining, damages

An international arbitration tribunal has ordered Ukraine to pay JKX Oil & Gas Plc (UK), which engages oil and gas mining in Ukraine, almost USD 12 million damages caused on the company by Ukraine breaching the intergovernmental agreement with Great Britain on mutual protection of investments.

Ukrainian News Agency learned this from a company's statement of February 6 on the London Stock Exchange website.

"In the interim the Company notes that the tribunal found that the Government of Ukraine was in breach of elements of the bilateral investment treaty between the Government of the United Kingdom and the Government of Ukraine and has awarded JKX damages of approximately USD 12 million," it reads.

According to the Ministry's of Justice (defendant) rationale, grounds of the JKX and its connected companies' action against Ukraine were: the Verkhovna Rada raising the rate of oil and gas royalty; the Cabinet of Ministers forbidding certain (big) companies buying gas from all suppliers but Naftogaz of Ukraine national joint-stock company (Government Resolution 647 dated November 26, 2014); the National Bank Board applying administrative measures at the forex market (NBU resolutions Nos.540 of August 28 and 758 of December 1, 2014).

JKX claimed that it had unreasonably overpaid USD 180 million in subsoil use fees.

As Ukrainian News Agency earlier reported, JKX's earnings in 2015 were USD 88.5 million, a decrease of USD 57.7 million (39.5%) from 2014 (USD 146.2 million).

JKX's main asset in Ukraine is wholly-owned subsidiary Poltava Petroleum Company, which extracts hydrocarbons in Ignatovskoye, Molchanovskoye, Novo-Nikolaevskoye, Rudenkovskoye, Zaplavskoye, Elizavetovskoye, Chervonoyarske, and Eastern fields (all in Poltava Region).

Eclairs Group (reported by the media to be connected to businessmen Ihor Kolomoiskyi and Hennadii Boholiubov) holds 27.54% of shares in the company, Proxima Capital Group (Russia) owns 19.92% and Glengary Overseas Limited 11.45%.

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