New legislation strengthens concessionaires' rights - International Law Office

On December 23 2010 Parliament passed legislation that amended the protection of concessionaires' rights.

The Law on Concessions has been supplemented by a new section whereby the state guarantees protection of concessionaires' legitimate rights and interests. The new provisions also commit the government to observing the conditions for concession activities.

Specifically, the law provides as follows:

• Legislative changes may not impose less favourable conditions on concessionaires in their implementation of concession projects. The amended law prevents the authorities and autonomous government entities from intervening in concessionaires' activities, except as legislation or the applicable concession agreement allows.
• Property and financial resources may not be expropriated from concessionaires, unless the law so requires. The state may requisition such resources only for rescue operations in response to emergencies (whether of natural or human cause). The law establishes the concessionaire's right to compensation in such cases.
• Amended rules on the allocation of land to concessionaires stipulate, among other things, that land in state or municipal ownership be transferred to the concessionaire on a lease, along with the object of the concession, if the latter is located on such land.

Leases must comply with the Land Code and the Law on Land Leases.

For further information on this topic please contact Timur Bondaryev at Arzinger by telephone (+380 44 390 5533), fax (+380 44 390 5540) or email (timur.bondaryev@arzinger.ua).