The state protected the interests of domestic business.
2 December 2024
Igor Boyko's claims against the state of Ukraine for 100 million US dollars were rejected in full. Igor Boyko was unable to prove the legality of the acquisition of investments.
Today, the Zhytomyr Confectionery Factory is managed by its legal owners.
Igor Boyko, who illegally created the LLC "ZhL" by merging the Zhytomyrski Lasoschi confectionery factory with his controlled LLC "Budstyle-XXI", which did not conduct any economic activity, lost in the International Court of Arbitration. The Permanent Court of Arbitration in The Hague, Kingdom of the Netherlands, provided administrative support for the consideration of the case (Igor Boyko v. the State of Ukraine, case No. 2017-23). The esteemed arbitration tribunal found that Igor Boyko failed to prove either the legality of the investment acquisition or the fact of Ukraine’s violation of the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the Promotion and Mutual Protection of Investments. As a result of the case, the claims totaling 100 million US dollars were rejected in full.
Background to the conflict.
Until 2010, Zhytomyrski Lasoshchi Closed Joint-Stock Company was one of the five largest confectionery manufacturers in Ukraine, was distinguished by the highest ratings for product quality, and its wide range was known to more than 30 countries abroad.
The problems began in the 2010s, when the factory, which had been under the management of Igor Boyko for a long time, became the center of a corporate dispute. Ukrainian courts recognized that I. Boyko did not have the legal right to own the factory, having seized the company's assets in a raider manner.
As a result, the assets were returned to the shareholders of Zhytomyrski Lasoschi CJSC, whom I. Boyko illegally deprived of corporate rights by creating a new enterprise, TDV ZHL, to which the property of Zhytomyrski Lasoschi CJSC was transferred. Ihor Boyko, disagreeing with such decisions of the Ukrainian judiciary, accused the state of illegal expropriation and violation of international law.
Position of Ukraine.
The Ministry of Justice of Ukraine provided evidence that the actions of the authorities did not go beyond the framework of national legislation and international agreements. Representatives of the state emphasized that the court decisions regarding the Zhytomyrski Lasoschi confectionery factory had a legal basis, and I. Boyko's losses were caused by his own illegal actions in conducting business.
Court decisions.
During 2011-2015, ZJSC "Zhytomyrski Lasoschi" ceased to exist due to the illegal actions of Igor Boyko.
During this time, shareholders defended their rights in the courts and law enforcement agencies, which resulted in the resumption of ZJSC "Zhytomyrski Lasoschi" activities from the end of 2015, the full restoration of shareholders' rights, and a return to the traditions that the factory had followed since its foundation.
A major role in the resumption of the company's work and its protection from raiding was played by the Chairman of the Supervisory Board, Serhiy Tyshchenko.
In 2022, Ukrainian courts confirmed the legality of the state's actions, and now international arbitration has agreed with these conclusions. It was decided that compensation to I. Boyko is not subject to payment, since his rights were not violated.
International influence.
This decision became important for Ukraine in the context of protecting its interests in the international arena. It is obvious that the state can effectively defend itself in complex disputes and create mutually beneficial conditions for investors.
Further consequences.
This case is an important precedent in the protection of state interests in international courts.
This court decision finally concludes the long-standing legal dispute surrounding the confectionery factory "Zhytomyrski Lasoschi". The ownership structure is transparent and based on real investments and participation of the labor collective. Today, the business continues to function in wartime conditions, preserve jobs, and bear responsibility for the country by substantively supporting its economy.
Today, the Zhytomyr Confectionery Factory is managed by its legal owners.
Igor Boyko, who illegally created the LLC "ZhL" by merging the Zhytomyrski Lasoschi confectionery factory with his controlled LLC "Budstyle-XXI", which did not conduct any economic activity, lost in the International Court of Arbitration. The Permanent Court of Arbitration in The Hague, Kingdom of the Netherlands, provided administrative support for the consideration of the case (Igor Boyko v. the State of Ukraine, case No. 2017-23). The esteemed arbitration tribunal found that Igor Boyko failed to prove either the legality of the investment acquisition or the fact of Ukraine’s violation of the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the Promotion and Mutual Protection of Investments. As a result of the case, the claims totaling 100 million US dollars were rejected in full.
Background to the conflict.
Until 2010, Zhytomyrski Lasoshchi Closed Joint-Stock Company was one of the five largest confectionery manufacturers in Ukraine, was distinguished by the highest ratings for product quality, and its wide range was known to more than 30 countries abroad.
The problems began in the 2010s, when the factory, which had been under the management of Igor Boyko for a long time, became the center of a corporate dispute. Ukrainian courts recognized that I. Boyko did not have the legal right to own the factory, having seized the company's assets in a raider manner.
As a result, the assets were returned to the shareholders of Zhytomyrski Lasoschi CJSC, whom I. Boyko illegally deprived of corporate rights by creating a new enterprise, TDV ZHL, to which the property of Zhytomyrski Lasoschi CJSC was transferred. Ihor Boyko, disagreeing with such decisions of the Ukrainian judiciary, accused the state of illegal expropriation and violation of international law.
Position of Ukraine.
The Ministry of Justice of Ukraine provided evidence that the actions of the authorities did not go beyond the framework of national legislation and international agreements. Representatives of the state emphasized that the court decisions regarding the Zhytomyrski Lasoschi confectionery factory had a legal basis, and I. Boyko's losses were caused by his own illegal actions in conducting business.
Court decisions.
During 2011-2015, ZJSC "Zhytomyrski Lasoschi" ceased to exist due to the illegal actions of Igor Boyko.
During this time, shareholders defended their rights in the courts and law enforcement agencies, which resulted in the resumption of ZJSC "Zhytomyrski Lasoschi" activities from the end of 2015, the full restoration of shareholders' rights, and a return to the traditions that the factory had followed since its foundation.
A major role in the resumption of the company's work and its protection from raiding was played by the Chairman of the Supervisory Board, Serhiy Tyshchenko.
In 2022, Ukrainian courts confirmed the legality of the state's actions, and now international arbitration has agreed with these conclusions. It was decided that compensation to I. Boyko is not subject to payment, since his rights were not violated.
International influence.
This decision became important for Ukraine in the context of protecting its interests in the international arena. It is obvious that the state can effectively defend itself in complex disputes and create mutually beneficial conditions for investors.
Further consequences.
This case is an important precedent in the protection of state interests in international courts.
This court decision finally concludes the long-standing legal dispute surrounding the confectionery factory "Zhytomyrski Lasoschi". The ownership structure is transparent and based on real investments and participation of the labor collective. Today, the business continues to function in wartime conditions, preserve jobs, and bear responsibility for the country by substantively supporting its economy.