The Canadian company TIU Canada produces renewable energy in Ukraine. What started great has turned out to be a nightmare. The company is currently tied up in lawsuits against a company owned by oligarch Ihor Kolomoisky.
It started great for Canadian Michael Yurkovich, who has renewable energy companies in several countries worldwide. His renewable energy company TIU Canada was doing great after its launch in the central Ukrainian city of Nikopol, making a big profit. He started a 10.5-megawatt energy station with solar panels in Nikopol in 2018.
Yurkovich and his partners soon opened another two stations with a total investment of 65 million dollars. However, the initial success didn’t last long before troubles started to emerge, and the company had to go to court, trying to fight for their investments in Ukraine. The company Ferroalloy Plant, NZF, owned by the Ukrainian oligarch Ihor Kolomoisky, was next door in Nikopol. TIU Canada was connected to an energy station placed on land owned by NZF and in 2019, NZF told the Canadian company that they will turn off the connection and the power due to repairs, TIU Canada informs Ukrainenu.
It led to a legal battle as NZF turned disconnected the Canadian company. TIU Canada has tried to receive compensation in court for lost profits after a full year without connection.
“It is clear to us this disconnection occurred deliberately and with purpose. We believe this was an effort to sabotage our operation. They used an outdated order for repairs from a now-defunct Ukrainian state body as an excuse, but no repairs were made despite our power plant being disconnected for more than one year,” writes TIU Canada in an email.
“Kolomoisky offered to buy us”
Kolomoisky’s company NZF has denied any wrongdoing, and the case is still not decided in court. TIU Canada claims that NZF cut off their power to damage the company and force them to sell the company cheaply. They say that Kolomoisky’s company offered to buy TIU Canadas company in Nikopol at a later stage, making the case even more suspicious.
“There was no official offer per se, however, he (Kolomoisky) has verbally indicated directly and through intermediaries that he would like to take over the business. However, this succession of events is best characterized by the term ‘raider-attack,” informs the company to Ukrainenu, “I will use the Transparency International definition as to where “malicious intent, corrupt practices, bribery, blackmail are in general typical and also supported by fake court decisions and the assistance of different law-enforcement agencies” and other government organs subject to malign influence. Regardless, the message received was clear, as this chain of events developed.”
TIU Canada has sought justice in court for damages of 2.2 million Canadian dollars, but it is not an easy job in a country known for problems with its judiciary. Kristian Andersson, Chairman of the Management Board at SEB Ukraine, has previously told Ukrainenu that Ukraine’s problems with corruption within the judiciary are the largest problem for attracting investments to the country. The same analysis came from the Swedish Business Association. The Swedish company Scania has also run into problems in the Ukrainian court system and is fighting to save its investment, which Ukrainenu has written about before.
In a Kyiv court, TIU Canada’s case against NZF was firstly dismissed. Kolomoiskys company argued that they had no obligation to provide or transmit the energy produced at TIU Canada and, therefore, cannot have cut it off. TIU Canada is still fighting for compensation in court and recently managed to get three judges removed, claimed to be loyal to NZF.
“The Ukrainian court system leaves much to be desired. This is not a revelation. Our experience has not been positive – but this is something all foreign investors can attest to. We have had to deal with countless administrative delays, judges calling in “sick” due to Covid. A word on that. Seems judges in Ukraine have higher per capita covid rates than the public at large. We have also had to deal with several nonsensical lower court rulings,” TIU Canada writes, “As for fairness, we certainly hope so, but the odds are against us.”
A problem for Ukraine
Ukrainian President Volodymyr Zelensky has promised to reform the judiciary and fight the Ukrainian oligarchs to create a system with transparency and fairness for citizens and investors. A reform of the judiciary is still underway. TIU Canada points out to Ukrainenu that reforms are needed if the country wants foreign investors.
“Ukraine will never meet its foreign investment goals if they do not address the systemic issues at play here. They are shooting themselves in the foot. We need to constantly remind the government and the public of this. If we fail, it will send a chilling message to other recent investors, and ultimately the Ukrainian people suffer,” the company argues and advises foreign companies in Ukraine to only deal with really trusted partners and have a good media and political outreach program.
“Our goal is to do everything in our power to prevent this. If we lose in the Court of Appeal, we intend to file with the Supreme Court. If we cannot get a fair trial in Ukraine, it will have a chilling effect on others who are considering entering the market and will harm relations with western partners. We speak to other US and Canadian businesses regularly. And where they may have been interested a year ago to undertake new projects… this is now a fantasy. We talk about hundreds of millions of dollars of new projects they have lost out on,” the company writes.