Suspended status of "Morshynska": why the IDS Ukraine case in VAKS has been dragging on for years

Consideration of the claim to confiscate the assets of the IDS Ukraine group in the High Anti-Corruption Court has been underway for more than two years, significantly exceeding the time limits provided by law.

The case has been underway for more than 2 years At the High Anti-Corruption Court on 9 November there will be another hearing regarding the confiscation of Ukrainian assets of sanctioned Russian oligarchs held as corporate rights in the IDS Ukraine group ("Morshynska," "Myrhorodska," "Alaska"). Because the case is now at its final stage, only a few hearings remain before a final verdict is issued. The consideration of this claim highlights a significant difference in the speed of the judicial system. While the wartime economy needs quick budget replenishment, the process concerning a billion-hryvnia enterprise has stretched out to a duration that exceeds the legal limits by many times. Read also: The court blocks the transfer of "Morshynska" to a new manager How the legal rules apply to consideration of such cases The "Morshynska" case was opened back on 25 September 2024 and has been ongoing for more than two years. This means the statutory time limits have already been exceeded by 25,5 times. According to Articles 283-1 of the Code of Administrative Procedure of Ukraine, consideration of a claim to apply a sanction in the form of seizure of property in favor of the state should take up to 30 days, and consideration of an appeal up to 15 days. Until July 2023 these terms were even shorter and amounted to 10 and 5 days respectively. Overall, since the start of the full-scale invasion the Ministry of Justice has filed 83 similar claims, and in 79 cases judgments have already come into legal force. The state seized corporate rights of 135 companies, hundreds of real estate objects and vehicles, and the amount of proceeds from the sale of sanctioned property exceeded 2,7 billion UAH. Read also: ARMA’s tender for a manager of IDS Ukraine was held with gross violations What is known from VAKS practice Most sanction cases are considered by VAKS promptly. The median for the sample of completed proceedings is slightly more than 32 days: The very first claim concerning AFK "Sistema" of Vladimir Yevtushenkov was considered by the court in 8 days The case to seize two-thirds of the stake in the Ocean Plaza mall from Putin's "wallets," the Rotenberg brothers, was closed in 17 days The assets of "Tatneft" were seized in 31 days The claim regarding the company "Vinnytsiapobutkhim" was considered in 41 days Confiscation of the construction materials producer "Aeroc" took 43 days The case concerning the railcars of Stanislav Gamzalov in October 2026 the court closed the case in 13 days from the moment the claim was filed. Even if the first instance meets the time limits, delays often arise at the appeal stage, although the law allows 15 days for this. In the case concerning the assets of Oleg Deripaska and the Mykolaiv Alumina Plant the first instance issued a decision in 34 days, but the review in the VAKS Appeals Chamber lasted 4 months. Similarly, with the receivable rights to the Ocean Plaza mall loan in the Ethoder Investments case: the appellate review stretched nearly 3 months. There was also a significant delay in the case of the Kalush Pipe Plant of the company "Poliplastik," where the first instance examined the claim for more than 4 months instead of one. But the largest assets turn into multi-year proceedings. The longest is the VS Energy case regarding the confiscation of 8 regional power companies, hotels and metallurgical plants. The claim was filed in June 2023, the materials exceeded 230 volumes involving more than a hundred third parties, and the review has been going on for a third year. Read also: IDS Ukraine case: British shareholders of "Morshynska" will go to international courts The search for a manager for the assets continues A similar situation has formed around the sanctioned portion of IDS Ukraine’s assets. However, here everything is complicated by a parallel process in which ARMA is searching for an external manager, accompanied by a number of scandals and accusations. While the VAKS panel continues to consider the case on the confiscation of corporate rights and their subsequent transfer to the State Property Fund, ARMA is trying to complete the procedures to find a manager for IDS Ukraine’s assets as quickly as possible. The open question remains which will happen faster: VAKS issues a decision and the assets of IDS Ukraine are transferred directly to the SPFU with subsequent nationalization and the funds credited directly to the state budget; or the VAKS decision is delayed, and accordingly "Morshynska" is transferred to an external manager — the private company "Prioritas" — in the hope that the asset will be preserved until VAKS issues a decision. At the same time, the profile of this company itself raises a number of questions for ARMA, since its staff numbers 3 people and its charter capital amounts to 1000 UAH. According to attorney and former ARMA deputy head Pavlo Velykorechanin, transferring the asset to external management in this situation entails a number of threats for Ukraine, as it creates risks of international claims from the British bona fide shareholders of IDS Ukraine, the financial burden of which would ultimately fall on the state budget.

Earlier we wrote that ties to Mindich of the winner of ARMA’s tender for "Morshynska" became known.