US court dismisses claim against Tymoshenko for lack of jurisdiction
MOSCOW, December 13 - RAPSI. A US federal judge on Wednesday granted former Ukrainian prime minister Yulia Tymoshenko’s motion to dismiss Universal Trading & Investment Co., Inc.’s (UTICo) $18.3 million claim against her for lack of jurisdiction, according to the ruling made available to RAPSI.
UTICo is the judgment creditor of a $18,344,480 default judgment against United Energy Systems of Ukraine (UESU), which Tymoshenko headed in the 1990s, prior to running the country. UTICo ultimately went after Tymoshenko for the money, claiming that she “converted, withheld and fraudulently transferred” over $2 billion from UESU for purposes of shielding the company’s assets.
Tymoshenko moved to dismiss for lack of personal jurisdiction. In considering her point, the court noted that in order to establish personal jurisdiction, there must be an “articulable nexus or substantial relationship” between transactions that occurred within the state and a given cause of action, quoting the relevant case law to note, “jurisdiction will not extend to cover defendants with nothing more than petty contacts to the state.”
UTICo asserted Tymoshenko’s personal jurisdiction based on several transactions, including: a $460,000 bank transfer to a UESU parent company in New York in 1997; allegations that Tymoshenko controlled eight US shell companies, including two in New York; Tymoshenko was allegedly paid nearly $3 million by a New York corporation; as president of Pivden Bank, she allegedly controlled two New York bank accounts; and she allegedly participated in a conspiracy with former Ukrainian prime minister Pavlo Lazarenko in New York. None of these claims were considered, however, due to UTICo’s failure to include them in its complaint.
UTICo further asserted Tymoshenko’s personal jurisdiction based on her hiring of lobbying and PR professionals in New York, and on her having brought suit in the district court in the past. However, the court found this argument unimpressive, primarily due to the fact that the case law presented as legal precedent was not analogous to the facts of Tymoshenko’s case.
UTICo’s final assertion of personal jurisdiction was based on the theory that Tymoshenko did business in the state by directing many transactions that passed through New York bank accounts. The court remained unconvinced, however, explaining, “Given the lack of clear precedent on this issue and the policy rationale in favor of not extending jurisdiction over Tymoshenko based 00 the alleged banking transactions, the Court declines to do so.”
UTICo submitted its claim to the U.S. District Court for the Southern District of New York in November 2011. Since the defendant did not respond, UTICo submitted a motion in April to have the lawsuit considered in absentia.
In late 2005, as UESU's assets were unfrozen, UTICo made several abortive attempts to collect the awarded amount from the company and a number of individuals close to Tymoshenko, including her business partner Pavlo Lazarenko, also a former prime minister of Ukraine.
UTICo sued Tymoshenko after the company failed to involve her as a third party, having its own claims in the dispute between her, RosUkrEnergo's Swiss trader RUE and its co-owner Dmitry Firtash.
In October 2011, Tymoshenko was sentenced to seven years in prison for abuse of power based on a 2009 gas contract that she signed with Russia. She is serving her sentence in a Kharkov women's prison. She has been receiving treatment at a Kharkov hospital since May 2012. She was diagnosed with a spinal disc herniation.
In late March, a second case bringing further charges against Tymoshenko was filed with Kharkov's Kievsky District Court. The case deals with her activity at UESU.
She is accused of misappropriating funds.