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Russia files lawsuit against Ukraine to London court for non-payment of $3 bln loan

The Russian Finance Ministry filed a lawsuit against Ukraine to the London's High Court of Justice for non-payment of a $3 bln loan, Russian Finance Minister Anton Siluanov told journalists Wednesday.

Ukraine had to pay the debt on December 21, 2015. On December 31, grace period to settle the dispute expired. The Russian Finance Ministry has not received any direct offers from Kiev.

"Today the Russian Finance Ministry has filed a lawsuit against Ukraine to the London's High Court of Justice in order to recover the Ukrainian debt with a nominal value of $3 bln and legal expenses of the Russian Federation," he said.

According to the minister, Ukraine is not ready to negotiate settling the debt "in good faith". "The lawsuit was filed after repeated unsuccessful attempts to encourage Ukraine to have a constructive dialogue on debt restructuring and to recognize the loan as official — so that it is regulated on better terms better than those proposed by Ukraine to its private creditors," the Minister said.

According Siluanov, the Finance Ministry expects transparent judicial proceedings in London. "I believe that the trial at the High Court of Justice will be open and transparent, and the protection of rights of the Russian Federation as a creditor will be carried out by an independent, trustworthy court, which will consider without prejudice the dispute between the two sovereign states, regarding non-fulfilment of the debt obligations on eurobonds," he said.

Siluanov added that a legal investigation of such dispute in court is a historic precedent on its own account, and "the fact that the debtor actions caused this is only regrettable."

Cleary Gottlieb Steen & Hamilton to represent Russia's interests in lawsuit against Ukraine

According to the Russian Finance Ministry, Cleary Gottlieb Steen & Hamilton LLP is going to represent the interests of Russia in the lawsuit against Ukraine on recovering $3 bln debt.

In 2014, Cleary Gottlieb Steen & Hamilton LLP represent Russia's interests in the proceedings on payment of compensation to former Yukos shareholders.

Ukraine's debt to Russia

On December 18, 2015, the Ukrainian government imposed a moratorium on payment of $3 bln debt to the Russian Federation because of Russia's refusal to sign a restructuring agreement on an equal basis with private creditors, Ukrainian Prime Minister Arseniy Yatsenyuk said. According to Russia's Economic Development Minister Aleksey Ulyukayev, Ukraine's decision to impose moratorium on payment of its debt to Russia was virtually a default announcement.

In December 2013, Russian President Vladimir Putin and at the time Ukrainian President Viktor Yanukovich reached an agreement that Moscow would extend a $15 bln loan to Kiev through placing Ukrainian securities. Under the deal, bonds worth $3 bln were listed on the Irish Stock Exchange on December 20, 2013, and acquired by Russia using the funds from its National Welfare Fund.

On December 17, 2015, the International Monetary Fund board recognized the official status of Russia's loan to Ukraine, which meant that the sovereign borrower is under repayment obligations.

[Source: Itar Tass, Moscow, 17Feb16]

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small logoThis document has been published on 17Feb16 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.