The Chinese company Skyrizon sues Ukraine for billions of dollars over the Motor Sich case.
The Chinese aerospace company Skyrizon has been trying to buy Motor Sich, a Ukrainian company making aircraft engines. They were getting close to the goal, but at the last minute, the Ukrainian government blocked the buyout. Ukraine’s Western partners, the US especially, was very concerned about the idea of letting China buy strategic infrastructure.
Nevertheless, the Chinese owners of Skyrizon disagrees strongly, and they have now sued the Ukrainian government for 4.5 billion USD as compensation for the failed attempt of buying the company, which has involved five years of work, according to Skyrizon, reports the Kyiv Independent.
According to Skyrizon, putting a pin in the sale of Motor Sich was a breach of an agreement signed by Ukraine and China shortly after Ukraine regained independence in 1992. They, founder of Skyrizon Wang Jing and the company, have taken the case to the Permanent Court of Arbitration in Hague.
The purchase was almost completed, when the Ukrainian government stopped it. They also did not return the capital, that Skyrizon had posted already. Instead they sanctioned the company and froze their assets from being transferred from Ukraine and abroad. Naturally, the Motor Sich case put a strain on the relationship between the two countries.
A permanent ghost
Still, the ghost of Motor Sich is haunting the relationship between the two countries. China has shown interest, though, in investing in several infrastructure projects in Ukraine. The bottom line is that Ukraine is struggling with finding a balance, where they get as much foreign investment from China as possible without alienating USA.
Lately, the Chinese have shown interest in mining lithium in Ukraine. Shenzhen Chengxin Lithium Group is trying to obtain a permit to mine lithium in Ukraine. Ukraine has large deposits of rare minerals such as lithium which are attracting much attention from abroad. While the Chinese company is applying for permits, it is far from the only one trying to secure those lands.
“I know that investors constantly come to Gosgeonadr in search of vacant plots, which are in particular interested in lithium facilities. And this is the job of the Service – to communicate about it. I did not know about the specific application from the Chinese company yet.”
“But I want to remind you that we are in the courts (for the right to develop the Dobra site and the Shevchenkivske deposit). And until the trials are completed, there can be no question of any auction (for the sale of rights to these objects),” said Mykhailo Zhernov, Co-founder of MillStone & Co, to Nadra Info.