Ulysses Acted for Philip Morris in Settlement of Investor-State Dispute with Ukrainian Government

On March 22, 2019, the State Fiscal Service of Ukraine revoked UAH 635 million tax claims against Philip Morris Ukraine Private JSC following the Settlement Agreement between Philip Morris International Inc. (USA), Philip Morris Global Brands Inc. (USA), Philip Morris Brands Sarl (Switzerland), Philip Morris Ukraine Private JSC, on one side, and the Government of Ukraine, on the other side (“Settlement Agreement”).

The Settlement Agreement, which was approved by the Government of Ukraine on December 05, 2018, and signed on January 31, 2019, has been reached within the framework of the investor-state dispute and negotiations between Philip Morris and Ukraine under the US-Ukraine Bilateral Investment Treaty (BIT) and the Switzerland-Ukraine BIT.

It is the third publicly reported pre-arbitration settlement of investment disputes in Ukraine after previous settlements in Gilead Sciences Inc. (USA) v. Ukraine (in February 2017) and in Torno Global Contracting S.P.A. and Others (Italy) v. Ukraine (in May 2018).

All pre-arbitration settlements in investor-state disputes in Ukraine took place during the last 3 years, which is evidence that Ukraine and the Government of Ukraine have become much more open to foreign investments, and, in cases of grounded claims, Ukraine is willing to restore legitimate rights and expectations of foreign investors and resolve disputes with investors amicably.

Ulysses acted as an external legal counsel for Philip Morris in the investor-state dispute and negotiations with Ukraine and its Government. Our Dispute Resolution team, in this case, included partner Oleh Marchenko and associates Volodymyr Nakonechnyi, Nadiya Mykiyevych, Olena Kandia, and Nick Yurlov.

Previously, Ulysses acted for another U.S. company in its investor-state dispute with Ukraine concerning the infringement of valuable IP rights of the U.S. investor. In addition, we continue to act for Franklin and Lorraine McMahons, Home Group S.A., and Morgan Furniture LLC in the ongoing investor-state dispute and negotiations with Ukraine concerning unfair and expropriation penalties for the alleged violation of Ukraine’s currency control regulations.