China’s Skyrizon sues Ukrainian government for $4.5 billion over failed Motor Sich bid

China’s aerospace firm Skyrizon is taking the Ukrainian government to an international tribunal, demanding $4.5 billion in compensation over the failed purchase of Motor Sich, an advanced aircraft engine manufacturer based in the regional capital of Zaporizhia.

Beijing Skyrizon Aviation explained in the statement on its WeChat account on Nov. 29 that its Chinese investors have experienced significant losses due to unfair treatment and implementation of illegal measures in Ukraine for the past five years.

The company said a group of Chinese investors including Skyrizon’s founder Wang Jing filed a lawsuit against Ukraine in the Hague-based Permanent Court of Arbitration.

Skyrizon, which has sought to acquire a controlling stake in Motor Sich, accused the Ukrainian government of violating the agreement signed to protect two-way investment between Kyiv and Beijing in 1992.

The Chinese firm vowed that it will use “all possible legal weapons to resolutely defend our legitimate rights and interests.”

The arbitration request comes months after the Ukrainian government seized the assets and all the shares of Motor Sich in March, transferring the firm to state ownership for national security reasons.

Ukraine yielded to pressure from Washington, as China’s rapid military modernization during the last two decades has been a growing concern for policymakers in the United States.

The Ukrainian government kicked Skyrizon out of Motor Sich without returning the hundreds of millions of dollars that the Chinese firm had invested.

In January, former U.S. President Donald Trump's administration said it blacklisted Skyrizon over its efforts to gain foreign military technologies.

Days later, Ukraine’s President Volodymyr Zelensky signed an order to impose sanctions on the Chinese company, restricting its trade operations and preventing it from transferring its capital outside the country.