The murky controversy surrounding the Kyiv Dynamo soccer club is common knowledge among Ukrainians, who simply see it as an attempt by the new government to take Dynamo away from Surkis. No one is under any illusions about the legal aspects of the case.
Everything began with a statement by Deputy Prime Minister for Humanitarian Policy Mykola Tomenko, who did not overlook Kyiv Dynamo among the hundreds of his other initiatives. In his view, Kyiv Dynamo may be “reprivatized.” With this statement Tomenko has, intentionally or not, expressed the government’s position regarding Ukraine’s leading soccer club. It’s too bad that before making this statement the Deputy Prime Minister did not bother to make inquiries about Dynamo’s form of ownership. The club was never state owned or privatized. Thus, there are obviously no grounds for discussing its possible “reprivatization.”
A SIGNAL CORRECTLY UNDERSTOOD
The minister’s statement had expected consequences. It served as a signal for an attack on Dynamo, this time unleashed by the infamous Pechersk Court in Kyiv. On February 21 Judge Inna Otrosh ordered the arrest of most shares of the Dynamo soccer club as a preventive measure in connection with the lawsuit brought by Pacific International Sports Clubs Limited, which is registered on the island of Mauritius in the Pacific Ocean and is a shareholder in Dynamo. The plaintiff is contesting a recent issuance of Dynamo shares, which it considers illegal.
I won’t try to delve into the nature of the Dynamo share issuance. It is up to the courts to resolve the dispute among the shareholders and hand down a legal ruling, taking into account all the evidence. The subject of this article is the way that the Pechersk Court is considering the lawsuit by the Mauritian company, which has prompted a number of questions.
Why did the disgruntled shareholder only now contest the decision by the meeting of Dynamo shareholders, held last September and attended by a representative of Pacific? And why did the rest of the Dynamo shareholders learn about the lawsuit and arrest of their shares from the press?
PECHERSK-STYLE PROCEEDINGS
Judge Inna Otrosh, who was assigned to the case, has the formal right to impose any preventive measures she may consider appropriate at any stage of the proceedings. The judge may order the arrest of shares without notifying the defendant and simply subpoena the defendant to appear at the court hearing. However, why was the plaintiff the first to learn about the preventive measure? Pacific issued a press release about the arrest of Dynamo shares, which was widely circulated by international newswires on the eve of Dynamo’s important UEFA Cup match.
Most people in Ukraine are not versed in legal matters. Television viewers may not know that it is not a court ruling but only a preventive measure they are hearing about. In fact, court proceedings on the lawsuit Pacific vs. Dynamo have not begun. But nobody has ever mentioned or explained this. Instead, the words “Dynamo” and “arrest” dominate news reports, and even schoolchildren know what they mean. The Pechersk Court has become a kind of newsmaker, prompting hundreds of speculations about the soccer club. The case that has yet to begin has already been the subject of hundreds of commentaries, and dozens of ranking officials all the way to the president have expressed their views on this matter.
A STAB IN THE BACK
The situation was supposed to be defused on March 9, when Judge Otrosh considered during an open court hearing the question of canceling the preventive measure. After announcing her decision to cancel the arrest of Dynamo shares in the presence of the interested parties and journalists, Judge Otrosh ended the hearing at around 5 p.m., but half an hour later imposed another preventive measure in connection with the lawsuit brought by Pacific. This time the judge ordered the arrest of all Dynamo shares and banned meetings of Kyiv Dynamo shareholders. The country learned about this decision from Pacific’s press release that was mailed to news services on the same day, March 9, after 6 p.m.
Why didn’t Judge Otrosh announce her new decision in the courtroom, immediately after canceling the previous arrest order in the presence of the parties’ representatives and journalists? To all appearances, the text of the new order took more than a few minutes to write. It turns out that the order had been prepared beforehand. Why was Pacific the first to learn about the new order after the court hearing ended, while the defendant once again learned about it from news reports? How does one explain the Pechersk Court judge’s predilection for a company based on the faraway island of Mauritius?
MAURITIUS ON VELYKA ZHYTOMYRSKA
It is clear that the plaintiffs have probably never been to Mauritius. Pacific is an ordinary offshore company. Thousands of Ukrainian enterprises use offshore schemes to save on taxes. In reality, the company is a front for Konstantin Grigorishyn, the former business partner of the Surkis brothers and now their sworn enemy, as well as a supporter of the new, fair, and transparent Ukrainian government. Proof of the fact that Grigorishyn, a citizen of Russia, enjoys special status in Ukraine is the events involving a number of Ukrainian regional electricity distributors that were forcefully occupied in early February 2005. For some reason there have been no news reports about any arrests of those responsible for the armed attacks on the offices of the power distributors. Meanwhile, there is more than enough information about the “arrest of Dynamo,” which is how most Ukrainians understand the reports about the preventive measures imposed by Judge Inna Otrosh.
The March 9 court hearing, during which the press was in fact led astray, provides some food for thought. First, it was mentioned in court that the lawsuit was filed in the wrong jurisdiction. According to the law, Pacific’s lawsuit should be heard by the Shevchenkivsky Court in Kyiv, since all the defendants in this case are subject to its jurisdiction. However, the lawsuit was filed with the Pechersk Court, whose decisions are easy to predict, to say the least. Second, there is a young lawyer on the team defending the interests of Grigorishyn’s company, who obviously has enough experience to participate in such high-profile court hearings, despite his young age: he is only 22 years old. The phenomenon of the influential boy wonder-lawyer is explained by his last name. The interests of the Pacific company are being represented by the son of People’s Deputy Yury Kliuchkovsky, that same Kliuchkovsky who earned wide respect and renown during the Supreme Court hearings that overturned the results of the 2004 runoff elections. I hate to think that this might be the secret why Pacific representatives are always the first to learn about the court’s decisions. Incidentally, the offices of the lawyers representing the Mauritian company are based nearby — on Velyka Zhytomyrska Street in Kyiv.
INCIDENTALLY
Late last week Deputy Prime Minister Mykola Tomenko made a number of statements regarding the Kyiv Dynamo case. It turns out that the club will now come under the scrutiny of the Prosecutor’s Office, and if one is to believe the Deputy Premier, the president himself will oversee this process. “I have reported the story to the president and arranged for all materials relating to the history of the creation of the Dynamo Closed Joint-Stock Company to be made available to the president, who will decide whether reviews by the Prosecutor’s Office and other agencies will be necessary,” Interfax Ukraine quotes Tomenko as saying. He also commented on the decisions by the Pechersk Court: “We, the representatives of the Ukrainian government, welcome everything that the courts are doing in Ukraine, because only courts may resolve economic, financial, and other disputes arising in the country.” He added that this case is “a problem of two shareholders, and it would be improper for me to side with one of the shareholders or intervene in this discussion.”
Kyiv Dynamo representatives intend to appeal the decision by the Pechersk Court, which imposed the arrest on all shares of the soccer club. Yury Romazanov, defense lawyer for Kyiv Dynamo, made a statement to this effect at a news conference last week. “We will be appealing the court’s decision. We will lodge an appeal in the next few days,” he said in an interview. According to Romazanov, Kyiv Dynamo representatives may bring a countersuit for damages. He didn’t rule out that this case may be taken to the international level. “This is possible in theory,” the defense lawyer stressed, indicating his personal view that Pacific International Sports Clubs Limited is furthering the interests of Konstantin Grigorishyn. According to Romazanov, during the share issuance in August 2004, Pacific’s representatives did not wish to buy out their stake at the new proposed price.
