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Change in procurement appeals raises suspicions of political control - International Law Office

International Law Office

Projects & Procurement - Ukraine

Change in procurement appeals raises suspicions of political control

February 22 2011

Parliament has accepted a draft law that seeks to stipulate territorial jurisdiction over appeals against decisions by the Antitrust Committee on violations of state procurement legislation. The draft law would amend the Code of Administrative Procedure and the Law on State Procurement.

In particular, Article 19(3) of the code would be amended to stipulate that administrative appeals against committee decisions on state procurement violations must be heard by the administrative court with territorial jurisdiction over the city of Kiev. The explanatory note to the draft law states that the current version of the code is not strict enough in regulating the procedure for appeals by state procurement participants against committee decisions.

The Law on State Procurement provides that committee decisions in respect of claims relating to violations of state procurement legislation must be referred to the Kiev Regional Administrative Court. It also states that suit must be filed within 30 days of the contested decision. However, the division of Parliament's administration that reviews draft legislation identified a significant point: Article 19(3) of the code, to which the draft law refers, does not deal with non-regulatory acts in respect of specific subjects (eg, decisions in respect of particular individuals or entities); rather, the rules apply only to regulatory legal acts by state authorities, which do not include committee decisions on claims by state procurement participants.

Although the administration initially sought to dismiss the proposed draft law on its first reading on the grounds that its provisions contradicted each other and Article 19 of the code, Parliament's Justice Committee recommended that the draft law be accepted, and Parliament agreed.

The drafters appear to have had good reason to assign jurisdiction as they did, since the regional administrative court is more politically motivated. However, it is also busier and court procedures are likely to be protracted, to the detriment of all state procurement participants - particularly administrators of state funds.

This appears to be an attempt to gain political control over appeals against the results of state procurement procedures, despite the negative consequences for the efficiency of appeals and of state procurement in general.

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).

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