Ukraine Rejects Tymoshenko Appeal Amid Rift With West

A Ukrainian court rejected the appeal of jailed opposition leader Yulia Tymoshenko, upholding a seven-year prison sentence that has opened a rift between the former Soviet republic and the West.

The High Specialized Court for Civil and Criminal Cases in the capital, Kiev, announced today that lower court rulings convicting the former premier for abuse of office “are lawful and justified.” The verdict comes a day after the European Court of Human Rights began its own hearing into the case.

A co-leader of the 2004 Orange Revolution, Tymoshenko accuses President Viktor Yanukovych and his administration, which backed her arrest and incarceration, of corruption and violating democratic principles. The case caused an indefinite delay of an Association Agreement with the European Union to boost trade ties and advance economic integration.

“This verdict was an announcement of Yanukovych’s decision to keep Tymoshenko, his main political opponent, in prison,” her lawyer, Serhiy Vlasenko, told reporters after the court made its ruling. “Yanukovych showed today that he doesn’t care about anything in this country.”

The benchmark Ukrainian Equities Index, which has lost 33 percent this year, fell 2.63 percent today to 988.62 at 3:11 p.m. in Kiev. The cost of insuring government debt against non- payment for five years with credit-default swaps is 820 basis points, down from 849 at end-2011, data compiled by Bloomberg show. Ukrainian currency, the hryvnia, weakened today to 8.1165, highest since January 2010.

U.K. ‘Disappointed’

The U.K. government expressed “disappointment” in the decision and said in an e-mailed statement that it will continue to press Ukraine to end “selective” justice.

“We have consistently drawn attention to independent expert concerns about the conduct of Ms. Tymoshenko’s trial, and that of other opposition figures,” Europe Minister David Lidington said in the statement. “Progress on Ukraine’s Association Agreement with the EU will remain difficult without clear evidence that Ukraine is embracing democracy and the rule of law.”

“We want to work well with Ukraine and these judicial problems are not helping that,” Michael Mann, spokesman for EU foreign policy chief Catherine Ashton, told reporters today in Brussels. “We stress the importance for the Ukrainian authorities to take concrete steps to address the systemic problems of the judiciary,” he said.

Tymoshenko was convicted of causing damages to the state when she signed a natural-gas supply and transit accord with her Russian counterpart Vladimir Putin in January 2009.

The 10-year accord, which links the price Ukraine pays monthly for Russian natural gas deliveries to market energy prices, sparked a dispute that disrupted deliveries to at least 20 European nations for two weeks amid freezing temperatures at the beginning of 2009. Yanukovych says the contract has caused $12 billion of losses in the last two years.

“This is a shameful decision,” Tymoshenko’s daughter Eugenia Tymoshenko told reporters outside the Kiev court. “It is impossible to find justice in Ukrainian courts.”

Exceeded Authority

Tymoshenko “deliberately exceeded her authority as prime minister,” prosecutor Oksana Drohobytska said during an Aug. 21 court hearing. The investigation found Tymoshenko committed a crime in January 2009 that caused losses to the state, she said, adding that the crime was “premeditated.”

In March, the human rights court asked Ukraine’s government to ensure Tymoshenko had adequate medical care. When guards found her lying on the floor in pain, resisting transfer to a hospital, she was wrapped in a blanket, beaten and forcibly moved, her daughter said yesterday. Her lawyer, Vlasenko, said he saw the bruises days later when he was allowed to meet her.

‘Only Hope’

Nazar Kulchytskyy, a lawyer for the Ukrainian government, denied Tymoshenko was mistreated, arguing she resisted efforts to provide her medical treatment in prison. He also defended her pre-trial detention as necessary to ensure she didn’t flee or interfere with an investigation, and said round-the-clock surveillance was necessary, not excessive.

The European Court of Human Rights is “the only hope” against what she has described as the politically-motivated prosecution aimed at muting the opposition before October parliamentary elections, Vlasenko said.

Tymoshenko still faces separate charges over tax evasion and embezzlement in a case that has been adjourned several times because of her health.

Support for Tymoshenko has drawn level with Yanukovych’s ruling Party of Regions, a recent poll shows. Tymoshenko’s Batkivshchyna, or Fatherland party, had 19.6 percent backing, compared with 19 percent for the Party of Regions, the Razumkov Center for Economic and Political Studies said Aug. 17.

To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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