Graham Stack in Berlin -

Ukraine is refusing to pay out a controversial damages award made by the European Court of Human Rights to a Ukrainian-owned company linked to military supplies in conflict zones, following a bne IntelliNews article on the case.

In January 2014 the European Court of Human Rights awarded €5mn in damages against East/West Alliance Limited, an Irish brass plate company affiliated to former Ukrainian cargo flyer, ATI.

The damages were awarded for its Soviet-era transport and training planes being confiscated by Ukraine's tax police in 2001. A series of court decisions ordering that the planes be returned to East/West were ignored by Ukrainian courts, allowing East/ West to appeal to the ECHR against the state's violation of its right to "peaceful enjoyment of possessions."

"We won the case with a unanimous decision - and it couldn't have been any other way. The damages awarded as they stand are purely symbolic," East/West Alliance founder, Anatoly Liovin, a former Soviet airforce pilot, told bne IntelliNews. Liovin claimed €166mn from Ukraine, although one judge in a dissenting opinion said that the planes may have been acquired originally for less than the €5mn award.

The decision became final in June, with Ukraine then obliged to pay the damages within six months. Justice ministry officials initially told bne IntelliNews that they intended to pay out the award in compliance with their commitments to the ECHR. "We will do everything we can to transfer this money in the allotted time," the Ministry of Justice said in June.

But following bne IntelliNews enquiries, the Ministry of Justice has now changed its mind.   "Ukraine's justice ministry now refuses to implement the decision of the ECHR," Liovin told bne IntelliNews.

Liovin attacked a bne Intellinews reporter for his enquiries, seeing a conspiracy of enemies. "When and under what circumstances were you recruited to the SBU [Ukrainian security service]? What is your number and your code name? How else are you linked with the criminal regime of [ousted former president Viktor] Yanukovych?" he asked bne IntelliNews, referring to the article that questioned the ECHR decision.

As described in the article, the damages award was controversial because Liovin's business involved military equipment supplies and cargo operations in conflict zones in Africa, activities potentially at odds with human rights, according to research by an NGO and UN panel of experts on sanctions, as well as parliamentary investigations and a recent criminal prosecution in Ukraine.

Liovin denies any involvement in illegal freights, saying his operations usually involved humanitarian and commercial cargoes.

Liovin dismissed any moral case for not paying out the damage award to him, suggesting the justice ministry's decision was motivated by corruption. "They are waiting for us to offer them a bribe  - a percentage of the damages - as a sign of personal gratitude to the individuals who handle the execution of the court decision," Liovin said. "But this will never happen!" 

"All the old corruption schemes that operated under the previous authorities [of Yanukovych] continue to operate today with renewed force under new masters in the form of the new state officials and politicians," he told bne IntelliNews.

The justice ministry did not provide comment on Liovin's allegations.

Blast from the past

Liovin had pursued the claim against Ukraine for over a decade. In 2009 he even persuaded his Irish MEP, prominent foreign policy specialist and later presidential candidate Gay Mitchell, to submit awritten parliamentary question to the European Commission, representing his case. 

Liovin entered Ukraine's parliament in 2002, becoming deputy head of the transport committee, and heading a parliamentary investigation into the "crisis in Ukraine's aviation sector," which he used to pursue his claim over the confiscated planes, according to the ECHR decision.

But in 2002, Liovin was himself the target of an investigation by Ukraine's parliamentary anti-organised crime committee, headed by renowned mafia-buster Hrihory Omelchenko. The investigation, seen by bne IntelliNews in the archives of the Verkhovna Rada, detailed payments made to East/West Alliance 1999-2001 from a slush fund close to then president Leonid Kuchma, for arms cargoes transported by Liovin for state arms trader Ukrspetseksport.

Liovin is a minor figure now in Ukraine, mostly remembered for crashes of cargo planes, with multiple fatalities among the crew. Liovin blames airworthiness concerns on lack of after-sales service by Ukrainian plane manufacturer Antonov.

bne IntelliNews also revealed for the first time the hushed-up suspicious death of another businessman who won large damages against Ukraine in Strasbourg: Oleksandr Galkin, founder of major packaging concern Ukrplastic, who died on the Cote d'Azure in May 2013 in a horrendous incident currently under investigation by French police. Galkin won €27mn in damages against Ukraine in the same year. The awards to Galkin and Liovin are the two largest awards ever made by the ECHR to Ukraine, the press service of the court told bne IntelliNews.