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ABH Holdings S.A. brings $1 billion claim against Ukraine

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On 29 December 2023, ABH Holdings S.A. (ABHH) filed a request for arbitration (Request) and a statement of claim against Ukraine in a case that is an acid test of the rule of law in the West.

ABHH seeks full compensation for the unlawful expropriation of Sense Bank (the Bank) by the Ukrainian authorities through enforced nationalisation. The claim has been filed with the International Centre for Settlement of Investment Disputes (ICSID), the world’s leading body for Investor/State dispute resolution under the aegis of the World Bank in Washington, D.C.

The amount claimed is more than US$ one billion. The legal basis for the claim is the Treaty between the Belgo-Luxembourg Economic Union and the Government of Ukraine on the Reciprocal Promotion and Protection of Investments.

The Request meticulously outlines Ukraine’s escalating series of arbitrary, disproportionate, unreasonable, and discriminatory steps that led to the expropriation of the Bank by forced nationalisation. By combining methods of corporate raiding and war profiteering, the Ukrainian authorities have unlawfully taken the Bank from its rightful owners, beneficiaries, and shareholders including UniCredit Bank and The Mark Foundation for Cancer Research.

The case raises vital questions around the rule of law in the West. Will the states of the Western coalition, the legitimacy of which is predicated on strict compliance with the rules of international law, obstruct international justice for the benefit of a germane but corrupt regime – or will they allow international justice to prevail? Will the rule of law be irretrievably damaged in an atmosphere of political frenzy? Will “sanctions,” whose legal foundations are at best shaky, be used to deny justice to ABHH and its shareholders?

ABHH is aware that Ukraine, having no realistic hope of lawfully prevailing in this arbitration, has engaged in a behind-the-scenes campaign alleging various invented wrongs on the part of ABHH’s shareholders. The foundations of this are the sorts of baseless and unlawful criminal accusations that have traditionally formed part of ex-Soviet States corporate raiding patterns.

ABHH has carefully recorded all instances of Ukraine’s “black PR” campaign and will consider putting them before the international arbitral tribunal.

ABHH also fails to see how the continuing egregious violation of investment treaty obligations freely contracted by Ukraine vis-à-vis European states would promote a speedy accession of Ukraine to membership of the European Union.

It is critical that all States abide by the rule of law; it cannot be conveniently suspended in war time. To the contrary, it is during such times that States are tested to see if they abide by the international rule of law or breach it. Equally, this is now a time to see if the West will allow its own institutions to freely and fairly determine the breaches of Ukraine before an international tribunal.

ABHH fully expects justice to be done and will ensure that it is seen to be done. The eyes of the world will be watching.