UK Supreme Court rules in favor of Ukraine in Yanukovych bond case

15 March, 07:07 PM
Viktor Yanukovych (Photo:Tatyana Makeyeva/Reuters)

Viktor Yanukovych (Photo:Tatyana Makeyeva/Reuters)

The UK Supreme Court has denied Russia's motion for summary judgment in the case concerning Ukraine's obligations under a $3 billion Eurobond issue made in 2013 under the regime of its runaway former President Viktor Yanukovych.

The ruling means that the case of on the Eurobonds issue in favor of Russia should go to a public trial, the court announced on March 15.

"In a great victory for justice and the rule of law, the UK Supreme Court has today held that Ukraine’s defence of duress, based on Russia’s threats of aggression against Ukraine, should be sent for a full public trial," Ukraine’s Finance Ministry said.

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The court recognized Ukraine's strong defense regarding the coercion and threats of force that Russia made in 2013 to compel Ukraine to issue the Eurobonds, said Ukrainian Prime Minister Denys Shmyhal said on Telegram.

"Now the Kremlin will have to disclose all information about its actions against Ukraine in an open court hearing," Shmyhal said.

Earlier, The Law Debenture Trust Corporation plc, which represents the interests of Russia, filed a lawsuit with the High Court of Justice in England and Wales on Feb. 17, 2016, to recover the debt on the Eurobonds.

The court approved an expedited hearing of the claim in March 2017, effectively rejecting Ukraine's main objections and agreeing that it had obligations under the Eurobonds.

 The decision ordered Ukraine to pay Russia the face value of the Eurobonds, worth $3 billion, an outstanding coupon payment of $75 million, as well as penalty interest accrued in the amount of $674,000 for each day of the delay, as well as part of the costs of the proceedings.

However, the court immediately granted Ukraine the right to appeal this verdict, and the Court of Appeal ruled that the trial court should consider the case in full.

During the hearings, the Ukrainian side asked that the dispute be heard in the International Court of Justice, but the Russian side rejected this proposal.

In the UK Supreme Court, the Law Debenture Trust Corporation plc disputed the decision of the Court of Appeal in general, and the allegations of duress put forward by Kyiv.

Ukraine, while largely satisfied with the Court of Appeal's verdict, disputed several points in the decision, insisting that the bonds were issued under the leadership of former Ukrainian President Yanukovych because of coercion by Russia.

Ukraine imposed a moratorium on servicing the $3 billion Eurobonds allocated by Russia to the Yanukovych regime in December 2013.

In February 2016, Russia filed a lawsuit against Ukraine with the High Court of Justice in London to recover the debt.

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