By John Meyer, consultant in business and foreign investment – Eurasia Business News, September 4, 2026. Article no 3149
Ukraine could face an international arbitration claim after the family of late Georgian billionaire Badri Patarkatsishvili threatened legal action over the possible seizure of their stake in IDS Ukraine, the country’s largest bottled-water producer. The dispute concerns a 34% shareholding held by the family alongside Russian investors, including sanctioned Alfa Group co-founder Mikhail Fridman.
IDS Ukraine produces leading bottled-water brands including Morshynska and Myrhorodska. Its corporate rights have been frozen since 2022 because Russian investors control 49% of the business. Ukrainian authorities are now considering nationalisation or the transfer of management control to an independent operator through the Asset Recovery and Management Agency, known as ARMA.
IDS Ukraine Ownership Dispute
The Patarkatsishvili family owns its interest through the UK-based New World Value Fund Limited. The stake was inherited in 2008 by Badri Patarkatsishvili’s widow, Inna Gudavadze, and daughters Liana and Iya Patarkatsishvili.
According to public reporting, New World Value Fund holds approximately 34.83% of IDS Ukraine. The Georgian government owns around 7.73%, while other minority shareholders account for about 7.45%. Mikhail Fridman’s indirect interest is estimated at 18.23%, though Russian investors collectively are reported to control about 49% of the company.
The issue for Ukraine is how to prevent sanctioned Russian-linked shareholders from benefiting from a strategically important consumer business while protecting the property rights of non-sanctioned investors. The issue for the Patarkatsishvili family is whether the state can take effective control of an entire company when they say there are no allegations of wrongdoing against them.
Why Ukraine Froze IDS Ukraine
Ukrainian authorities froze IDS Ukraine’s corporate rights in 2022, soon after Russia’s full-scale invasion. The freeze was linked to the company’s ownership structure and the presence of Russian investors, including Fridman, who has faced Western and Ukrainian sanctions because of his business ties and alleged links to the Russian political establishment.
The state subsequently transferred control of the frozen corporate rights to ARMA, Ukraine’s agency responsible for tracing and managing assets derived from corruption and other offences. ARMA has moved to appoint an independent manager for the IDS Ukraine business and has begun a selection process for managing the arrested assets.
Ukrainian officials argue that state management is necessary to prevent frozen assets from being misused and to ensure a major producer remains operational. The company’s bottled-water brands have broad national distribution, making IDS Ukraine an important commercial and consumer-goods asset.
Family Threatens International Arbitration
The Patarkatsishvili family has said it will first defend its rights in Ukrainian courts and before domestic authorities. However, it has warned that if its asset is ultimately taken through the ARMA process, it may seek justice in international courts or investment arbitration.
A family representative said non-sanctioned shareholders should not lose their property rights when they have not been accused of supporting Russia, money laundering or other unlawful conduct. IDS Ukraine has also said no competent Ukrainian authority has established facts of money laundering, unlawful fund withdrawals or comparable financial misconduct by the company.
The threatened claim has not yet been filed. That distinction is important: a potential arbitration case is not the same as an active international proceeding. Any future claim would depend on the final action taken by Ukrainian authorities, the investment structure used by the family and the legal protections available under relevant bilateral investment treaties.
International arbitration can be costly and lengthy. It may also complicate Ukraine’s efforts to demonstrate that postwar reconstruction will be governed by predictable rules, investment security and respect for legitimate property rights.
International arbitration can give an eligible foreign investor a treaty-based route to seek compensation directly from a State if state measures unlawfully deprive the investor of the value, use, or control of an investment. It does not normally stop the state actions immediately or guarantee the return of an asset, but it can create significant legal, financial, and enforcement pressure on the state.
ARMA’s Position and Allegations
ARMA has argued that shareholder disputes and legal challenges have hindered its ability to appoint a manager and manage the frozen assets effectively. Ukrainian officials have also raised concerns about possible financial misconduct and alleged resistance to ARMA’s actions.
However, IDS Ukraine and the Patarkatsishvili family reject these claims. They say the company has continued operating lawfully, paying taxes and maintaining supplies, and deny any connection to cyberattacks or other alleged wrongdoing referenced in some public statements.
The disagreement illustrates a central legal challenge: sanctions enforcement can require swift restrictions on assets linked to sanctioned individuals, but broad measures may also affect minority investors whose ownership is separate from the sanctioned interest.
Wider Implications for Ukraine
The IDS Ukraine case carries significance beyond bottled water. Ukraine is pursuing asset freezes and potential confiscations connected to Russian capital, while also trying to attract international investors for reconstruction, infrastructure, manufacturing and energy projects.
A transparent process that distinguishes sanctioned Russian holdings from the interests of non-sanctioned foreign shareholders may help protect Ukraine’s legal credibility. Conversely, an international arbitration dispute could create reputational and financial risks, even if Ukraine ultimately prevails.
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The proposed management transfer or nationalisation of IDS Ukraine remains unresolved. Until a final decision is made, the Patarkatsishvili family’s international legal action remains a possibility rather than a confirmed case. The outcome will be watched closely by investors, sanctions lawyers and companies operating in Ukraine with complex cross-border ownership structures.
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© Copyright 2026 – Eurasia Business News. Article no. 3149
Eurasia Business News 