Ukrainian President Volodymyr Zelensky (L) meets with visiting US Secretary of State Antony Blinken in Kiev, capital of Ukraine, May 6, 2021. Photo:Xinhua

Beijing-based investment company Skyrizon announced on Sunday that it submitted an application for arbitration to the Permanent Court of Arbitration in The Hague, requesting a ruling that Ukraine violated the bilateral agreement on the encouragement and mutual protection of investments and demanding $4.5 billion in compensation for alleged unfair treatment of Chinese investors by Ukraine.

According to Skyrizon, Chinese investors have experienced significant losses in Ukraine and in China due to a five-year period of unfair treatment and the continued implementation of illegal measures in Ukraine. The company said that it will use all possible legal weapons to defend its legitimate rights.

On January 29, Ukrainian President Volodymyr Zelensky signed an order imposing sanctions on three Chinese citizens and four Chinese companies, including Skyrizon, freezing its assets in Ukraine.

The companies involved were all investors in the Ukrainian aero-engine producer Motor Sich, and the Ukraine sanctions were imposed in tandem with US government efforts to block China from acquiring Motor Sich.

A Chinese analyst said the Ukrainian decision represented a continuation of its policy approach to compromise with the US, which has been trying to contain China's rise in the technology sphere.

"The unfair sanctions have kept Motor Sich from obtaining much-needed funds, as the company was on the edge of bankruptcy. Moreover, whether Ukraine will be able to receive so-called economic support from the US remains a question," Cui Hongjian, director of the Department of European Studies at the China Institute of International Studies, told the Global Times on Monday.

Motor Sich is a major global engine producer. After 2014, Chinese companies became the firm's major investors. In 2016, Skyrizon offered to buy 56 percent of the company's shares, a move that would help China fill a gap in engine production while allowing Ukraine to restart its own business. However, a Ukrainian court blocked the investment.

In a statement issued on January 31, Skyrizon said that as a result of the sanctions, the enterprise has been illegally deprived of its legal rights as a shareholder of Motor Sich and as a result experienced huge economic losses. 

Cui said that Skyrizon's application for arbitration shows that the company is taking the initiative in tackling the unfair trade row, as well as showing the Chinese company's principle of addressing international disputes in accordance with international laws.

"The more China complies with international laws to defend its rights, the more it reflects the ugly political tactics of some countries, as international economic cooperation has been often politicized by these countries," Cui noted.

The filing of Skyrizon's petition came as China engaged in a diplomatic row with Lithuania, as the latter tried to play the "Taiwan card."

Global Times