Ukraine Accused of Shirking Cleanup Contract

MANHATTAN (CN) - Though a court judgment already hangs over it across the Black Sea, the Ukrainian government has made no effort to pay the nearly $13 million cost of remediating its environmental disaster, an Israeli company says in Federal Court.

Based in Kfar Saba, Israel, S.I. Group Consort Ltd. filed suit in Manhattan on Monday because Ukraine and two agencies have allegedly stiffed it on a disaster-zone cleanup.

"In certain areas of the lvano-Frankivsk Region of Ukraine, particularly Kalush Town and the surrounding areas, vast amounts of industrial pollution and hazardous chemical waste, including the carcinogen hexachlorobenzene, threaten the physical safety of surrounding populations and contaminate underground water sources reaching as far as neighboring Moldova," the company's 53-page complaint states.

Hexachlorobenzene is one of the 12 chemicals listed for elimination under an international treaty known as the Stockholm Convention on Persistent Organic Pollutants, according to the complaint.

Though the Ukraine signed this treaty in 2001 and ratified it six years later, its government took even longer to act upon the problem, the SI Group says.

In 2010, a decree by the Ukrainian president pronounced the region a disaster area in a statement echoed by the deputy minister, according to the lawsuit.

The SI Group says that it later entered into an agreement with the local bureaucracy, known as the Development and Architecture of the Ivano-Frankivsk Regional State Administration.

The administration and the Israeli company allegedly signed four contracts.

In their U.S. currency equivalents, the documents obligated the Ukraine to pay roughly $5 million for the first agreement, more than $1.4 million for the second, more than $6.1 million for the third, and more than $5.8 for the last, the lawsuit says.

Even though SI Group removed millions of metric tons of pollution, the Ukraine honored only a fraction of its payment, SI Group claims.

"SI Group duly performed the removal, transport, and disposal services set forth in the agreements," the complaint states.

The Israeli company says that the Superior Economic Court of Ukraine, the nation's highest relevant court, affirmed their "final, conclusive, and enforceable" judgment.

SI Group wants to collect the judgment under four collection counts that include the New York Recognition Act and a claim for restitution and unjust enrichment.

The company seeks the equivalent of more than $12.9 million in compensatory damages.

It is represented by Evan Glassman of Steptoe & Johnson.

The Ukraine's embassy in the United States did not immediately respond to an email request for comment.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit