Right here comes a full and frank disclosure: the US $5 billion greenback query is only a pretext. We used it as a place to begin for a Legislation Society roundtable about Ukraine earlier this summer season.
The Worldwide Financial Fund (IMF) had only recently authorized a standby US $5 billion financing for Ukraine to ‘protect achievements thus far, and advance a small set of key structural reforms to make sure that Ukraine is well-poised to return to progress when the disaster ends’.
We needed to debate the Ukrainian cross-border transactional market and international direct investments within the nation, in addition to the function English and Ukrainian attorneys can play. And we needed to place these inquiries to a vote amongst all of the individuals: do you agree with the IMF? Do you anticipate Ukraine to ‘return to progress’ when the ‘disaster ends’? Do you anticipate your follow to be busier then? Or are you cautious in regards to the close to future?
Amongst those that gathered for the (digital) webinar have been each British and Ukrainian practitioners who specialise or have an curiosity in Ukraine’s company and transactional panorama.
Some could also be shocked to be taught simply how a lot using English regulation (and English attorneys) in worldwide offers, joint ventures, initiatives and disputes got here to dominate the cross-border market follow not simply in Ukraine however a lot of different jurisdictions of the previous Soviet Union.
Cross-border mergers & acquisitions and fairness finance transactions with a robust Ukrainian factor (say as a result of there’s a Ukrainian ‘goal’ firm or property are situated in Ukraine) are sometimes negotiated and documented by the UK-style sale and buy agreements or related contracts. They’re ruled by English regulation with any disputes to be resolved in London – whether or not via arbitration or the English courts.
‘Tailor made’ provisions of transactional paperwork typically replicate the challenges and realities of the rising markets similar to Ukraine or different post-Soviet jurisdictions. That is notably related within the case of on-going fairness and debt investments and joint ventures. Prolonged paragraphs are drafted to mitigate ‘nation danger’. Warranties are given as to the dearth of corruption or bribery. Inside insurance policies are launched on the degree of the native operational firms to implement one of the best worldwide practices. Worldwide company governance preparations are adopted or closely used.
As dialogue progressed, a number of themes emerged. The structural reforms began a number of years in the past are lastly beginning to bear some outcomes. The land reform, permitting for some flexibility within the acquisition, possession and use is lastly taking form – albeit very slowly.
Reform and bettering the standard of the judiciary are nonetheless badly wanted. Some sectors of the financial system present indicators of restoration: agriculture and pharma. The brand new regulation will permit for the event of a gaming market in Ukraine. Hold a watch out for the emergence of an energetic playing enterprise in Kiev!
As I moderated the dialogue, I used to be considering simply how far the Ukrainian (and wider post-Soviet) markets have developed for the reason that collapse of the Soviet Union within the house of lower than three a long time. I used to be additionally occupied with the function that Ukrainian colleagues and a lot of English attorneys have performed in that.
And right here we have been. Talking English with our Ukrainian colleagues and discussing market developments. We shared experiences about pitfalls and benefits of structuring advanced multi-jurisdictional transactions involving Ukraine.
Once we voted on the query of Ukraine returning to progress and producing elevated exercise each for transactional and disputes attorneys, the outcomes of our ballot got here shut. A small majority believed the exercise would enhance, whereas a large minority have been extra cautious in regards to the prospects within the close to future.
As a member of the Legislation Society’s worldwide committee, I imagine worldwide occasions similar to these are helpful past the mere change of the newest know-how. They supply knowledgeable discussion board and permit practitioners to really feel that we’re colleagues past the borders of a jurisdiction the place we occur to follow.
They might not lead on to the following deal or directions on a dispute. However when that subsequent deal or mission or dispute come round there will probably be a particular worth for many of us in realizing extra about our colleagues and the boldness that such data brings.
And what about all these casinos quickly to open in Kiev? Effectively, if I have been a playing man, I might wager that by the point of our subsequent 2021 Legislation Society English Legislation Day in Ukraine, these institutions will probably be working at a lot of motels and different areas within the centre of city. From a lawyer’s perspective the event of such a extremely regulated enterprise might generate extra work.
Is that this one instance of the Ukrainian ‘return to progress’? Maybe. It’s troublesome to know whether or not the IMF had this in thoughts when extending its financing to Ukraine. However no matter examples of progress there could also be, the US $5 billion ought to assist the restoration of the Ukrainian market, not hinder it.
Sergei Ostrovsky is a member of the Worldwide Committee of the Legislation Society. He has been working towards with Ashurst LLP in London for over 20 years