Ukraine is suing Chinese contractor for millions over unfinished work

The State Agency for Infrastructure Rehabilitation and Development (formerly Ukravtodor) won a legal dispute with Chinese construction company Xinjiang Communications Construction Group Co., Ltd over poor road repairs in Ukraine. This was reported on Monday, January 22, by the press service of the Ministry of Justice, which represents the interests of the State Agency in Chinese courts.

According to the report, the Ukrainian side won in three PRC courts and ensured the return of approximately UAH 500 million to the Ukrainian state budget, as well as to the International Bank for Reconstruction and Development.

“On January 17, 2024, funds of about half a billion hryvnias in equivalent dollars were transferred by the Bank of China to the account of the State Agency for Reconstruction and Infrastructure Development of Ukraine and to the account of the International Bank for Reconstruction and Development. The case is closed,” summed up Deputy Minister Irina Mudra.

In October 2017, Ukravtodor and the Chinese state-owned company Xinjiang Communications Construction Group signed two contracts under FIDIC terms to carry out repair work to improve traffic safety on the M-12 highway (Stryi-Ternopil – Kirovograd – Znamenka) and the reconstruction and overhaul of the M-03 highway ( Kyiv – Kharkov – Dovzhansky).

The contract for the reconstruction of the M-03 highway was terminated by Ukravtodor in December 2018, due to the date of termination, work under the contract had not yet begun.

Subsequently, in June 2019, Ukravtodor terminated the second contract for the M-12 highway, as the Chinese contractor at that time completed approximately 1% of the work instead of 70% and did not ensure proper operation of site maintenance, as a result of which the road section was brought to an emergency condition.

After that, Ukravtodor sent requests to the Chinese bank for collection under specified guarantees.

In August 2023, the Ministry of Justice received decisions from the Urumqi city court – in three cases on the claims of the Chinese state construction corporation against the former Ukravtodor, which were made in favor of the Ukrainian side. But on August 28, Xinjiang Communications Construction Group filed an appeal.

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