Chinese investors of Motor Sich increase amount of lawsuit against Ukraine to $3.6 billion

Chinese investors of the Ukrainian aircraft engine manufacturer, Motor Sich, increased the amount of arbitration lawsuit against Ukraine by $100 million dollars, to 3.6 billion dollars.

"The increase in the amount of preliminary claims is due to the fact that the initial group of plaintiffs was expanded to include several other Chinese shareholders, who also suffered significant losses as a result of Ukraine's actions in violation of its international obligations," reads the statement on Motor Sich’s website.

The investment dispute shall be considered by an ad hoc arbitral tribunal, which the parties are now in the process of forming.

In 2016, the owner of Motor Sich, Vyacheslav Boguslaev, sold the company to Chinese investors, but the Ukrainian government blocked the acquisition.

In July 2017, the Ukrainian Security Service (SBU) opened criminal investigation into subversive activity, and on April 2018 the company shares were seized at the request of the SBU investigator in order to preserve the physical evidence.

At the end of 2020, Yaroslavsky warned that his Chinese partners intend to sue Ukrainian government for 3.5 billion dollars in damages.

In January 2021, the U.S. blacklisted the Chinese company Skyrizon, which was trying to acquire Motor Sich.

On August 27, 2020 at the press conference in Kyiv, former U.S. National Security Adviser John Bolton said that he would try to convince the Ukrainian government of the danger of cooperation with China.  The Chinese embassy then called Bolton's words "unfriendly."

In January 2021, in accordance with a resolution of the Ukrainian National Security and Defense Council, Kyiv imposed sanctions on Skyrizon Aircraft Holdings Limited (British Virgin Islands), Hong Kong Skyrizon Holdings Limited (Hong Kong), Beijing Skyrizon Aviation Industry Investment Co., Ltd (China), Beijing Xinwei Technology Group Co., Ltd (China), and Chinese tycoon Wang Jing.

Restrictions imposed by this resolution include asset freezes, restrictions on trading operations, a ban on the transit of resources and flights, a ban on funds withdrawals from Ukraine, a ban on transactions with securities of these companies, a ban on increasing the share capital of the companies they own in Ukraine, cancellation of visas and cancellation of visits.

  Motor Sich, China, Ukraine