Europe

Recusal in the case of TIU Canada and the Ukrainian oligarch Kolomoisky

In the ongoing legal battle between TIU Canada and Ukraine’s notorious and heavily sanctioned oligarch, Igor Kolomoisky, over what seems a pretty straight-forward dispute where a company and facility controlled by the oligarch illegally, prevented TIU the use of its land be as a conduit for the transit of its solar production, a new chapter can now be added.

The most recent development was a decision of the appellate court as to who would hear the case. TIU lawyers presented a motion to the court using information that it had garnered in the public domain, arguing that the members hearing the present case, had a record of ruling in favor of Kolomoisky on a number of previous occasions. Their argument was simple: the Court, they felt, had exhibited a predisposition to rule in Kolomoisky’s favor.

Having presented their motion before the court on a Friday calling for the judge of the Court to be dismissed, and then arguing their motion on the following Monday in a short appearance before the Court, they saw their motion dismissed after 20 minutes. Intriguingly, the appellate court, in dismissing TIU’s motion to dismiss them, then recused themselves from the case.

What is intriguing is that the decision only raises further questions that invite further speculation as to the motives of the Court, and the judges, Popikovoy O.B., Korsaka B.A. and Yevsikova O.O.

Why did they first rule to deny the motion asking them to dismiss themselves, to only then recuse themselves from the case after they made the decision? Furthermore, in relation to proper and accepted Western practice: if they already knew of their decision to recuse, why did they not do so before making a decision? This action does not pass the smell test or logic.

For what it suggests is that there may have been other reasons for their recusal. Reasons that do not seem readily evident. This is not to say, nor imply “corruption” on the part of the Court, but if the Court decided to recuse itself on a Monday, only days after being presented with the motion, what new “facts”, if any, could have possibly come into play during the weekend? Did the court suddenly become aware of its need to have an established reputation for fairness and to act without prejudice?

These are important questions to ask in Ukraine as it continues to harbor a reputation for being tolerant of corrupt courts. It is not a secret, either in the country, nor outside of it, that the legal system, whether, the police, prosecutors, or judges, more often than not, fall under the influence of economic criminal interests or covert political manipulations. This is a major reason that this case is a cautionary tale for foreign investors and the future of Ukraine as a fair and rule of law jurisdiction. Again, that being said, no one is casting aspersions or accusing any participants of malfeasance in this case.

TIU’s challenge of the status quo and its unwillingness to submit to numerous legal maneuvers in a country that oftentimes exhibits xenophobic tendencies as to accepted western practices, shows the company’s resolve to find justice. Not only for its own legal claims as a foreign investor, but to ask publically, for all to see and hear, whether it is possible to get a fair legal hearing within the country.

In-country legal observers and practitioners say that the legal “experience” of TIU is not out of the ordinary. They have no problem comparing the experience of TIU, a Canadian company, with the experience of other corporate entities seeking legal remedies in the highest courts of the land. They suggest that the Court acted in this way so as to avoid further public attention and scrutiny. That it was a deliberate move to avoid unwanted and negative media public relations and that they wanted to avoid potential public complaints and potential investigations.

Trials such as this one are a test as to how Ukraine’s western partners choose to hold Ukraine to account in the development of a fair justice system, a major issue in post-Maidan Ukraine.

Western countries, if they are to aid Ukraine in its transition towards a fair and law based judicial system, cannot remain silent and neglect the tools of rhetorical persuasion. This practice, however, should by no means seek to influence the decisions of what should be the decisions of independent judges.

So how should foreign governments act upon the scenarios that emanate from such legal disputes?

Foreign governments must make public and visible their efforts to monitor the legal cases of their nationals.

They must publically state their expectations for legal fairness to government and legal institutions in addition to public media.

They must comment and provide daily scrutiny on the expectation of fairness in the process, using their pronouncements as a “teaching moment”.

They, meaning Ambassadors and ministers, must directly warn, through diplomatic mechanisms, of the potential negative effects on their relationships with Ukraine especially as to how judicial misbehavior, would impact the direct foreign investments of their nationals, as well as their governments.

In a general sense, they must apply more pressure towards the government of Ukraine in its pursuit of a fair and just legal system that would eat away at Ukraine’s reputation as a corrupt legal jurisdiction.

Increased and more sustained efforts should have the general aim of working with Ukraine to establish a more fair and just legal system, especially as it relates to the need to constantly and consistently deliver judicial legal decisions based on the highest standards of moral integrity. In time, this will become the backbone for a just society that contains a framework for a rules-based legal system and a greater rule of law society.

In a number of ways, TIU’s lawsuit against Kolomoisky is a direct challenge to the economic and legal status quo in Ukraine. The oligarch’s and Ukraine’s economic criminals know this. It is a challenge inspired by an assumption in the fundamentals of the free market, a competitive marketplace, fair competition, an expectation of a fair and unbiased judicial process, and equitable judgements. A system of law without prejudice.

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