Ukraine faces huge losses after London High Court ruling on Russian debt

Monday, 31 July, 2017 - 21:08

Ukraine faces huge losses after the High Court in London ruled that more than $3 billion of the previous president, “Yanukovych’s debt” in the shape of a loan from Russia, was indeed repayable.

The country received the loan shortly before the start of EuroMaidan, which ended a coup d’état, but the new masters of Kiev maintained that the Russian loan was “a bribe to Yanukovych for abandoning the policy of European integration”, and Kiev refused honour the debt.

The court in London decided that not only the overdue debt itself must be payed, but also interest on monies owed as well as part of the legal costs.

The High Court of London bound Ukraine to pay 2.8 million pounds sterling to Russia as the compensation of legal costs, the Russian Finance Ministry confirmed last week.

“The High Court of London bound Ukraine to compensate a portion of costs related to legal proceedings to Russia in the amount of 2.8 mln pounds sterling, with 50 percent to be paid by the debtor at the latest of September 20, 2017,” the ministry said.

In March 29, 2017 the Court ruled in favor of Russia in the claim against Ukraine, and bound Ukraine to pay to Russia the par value of Eurobonds worth $3 billion, the coupon payment of $75 million and penalty interests on these amounts.

TASS reported that the appeal will be reviewed in January 2018, according to a statement from the Russian Finance Ministry.

“The Court ordered that Russia’s claim in respect of Ukraine to compensate the remaining portion of expenses sustained due to debtor’s default on bonds will be considered after issuing the decision on the appeal filed by Ukraine in June 2017 against the verdict of the High Court of London. In view of a short period remaining before appeal consideration, the High Court of London expectedly extended the effect of its earlier made decision excluding enforcement measures for recovery of borrowed funds from Ukraine,” the Russian Finance Ministry said.

While Kiev still has a chance to lodge an appeal, as the meeting is scheduled for January, payment of funds will be enforced if Kiev loses their appeal.

“The court ordered Ukraine to pay to the Russian Federation the nominal value of the bonds in the amount of 3 billion US dollars, and interest accrued on these amounts. Thus, every day of delay will cost the state budget of Ukraine (Ukrainian taxpayers) more than 673 thousand dollars.”