POST Online Media Lite Edition


Ukraine to challenge court decision on payment of $3bn to Russia

Staff Writer |
Ukraine plans to file before June 23 an appeal on a dispute about three billion dollars’ debt to Russia, press service of Ukraine’s Finance Ministry saidy.

Article continues below

"The English court on May 26, 2017, judge (William) Blair extended the term for Ukraine’s appeal by 14 days (from June 9, 2017 to June 23, 2017)," the press service said.

"Thus, Ukraine will file the documents regarding the appeal within this extended term."

Earlier, Finance Minister Alexander Danilyuk said Ukraine would file the appeal on June 10.

Russian and Ukrainian Presidents Vladimir Putin and Viktor Yanukovich agreed in December 2013 that Moscow would give Kiev a $15 billion loan through the purchase of Ukrainian Eurobonds.

As part of this program, Ukraine placed bonds worth $3 billion on the Irish Stock Exchange on December 20, 2013 and Russia purchased them, using the money of its National Welfare Fund.

On December 18, 2015, the Ukrainian government imposed a moratorium on the Eurobond repayment to Russia while then-Ukrainian Prime Minister Arseniy Yatsenyuk motivated this move by Russia’s refusal to sign a debt restructuring deal along with private creditors.

However, a day before that the IMF Board of Governors made a decision that Ukraine’s liabilities to Russia were its sovereign debt and, therefore, Ukraine as the borrower state was responsible for the loan repayment.

Russia turned to London’s High Court in February 2016 with a lawsuit on the debt recovery from Ukraine.

As of December 21, 2015, Ukraine’s debt to Russia under the Eurobond amounted to $3 billion plus the unpaid $75 million last coupon. Each day, Ukraine’s liabilities under its $3 billion Eurobond grow by $683,000 as interest on the principal debt, the lawsuit says.

The Russian side has numerously proposed to Ukraine to solve the debt issue through negotiations. However, these proposals have been ignored, as Ukraine does not recognize the debt as its sovereign liabilities.

On March 29, London’s High Court ruled to hear the case of Ukraine’s $3 billion debt to Russia in an expedited procedure. Judge William Blair presided over a three-day court session on this issue in January.

"The Trustee is entitled to summary judgment," the judge said, reading out the ruling.

As the court said in its ruling, "Summary judgment is the procedure by which the court may decide a claim without a trial, where the claimant can show that the defendant has no real prospect of successfully defending the claim."

What to read next

Russia demands interim $325m from Ukraine in Eurobond court case
Ukraine files appeal to London Court against Russia in $3bn debt case
Russia to continue to supply Europe with gas