Kiev must return $3 billion to Moscow

The High Court of London clarified its March verdict.
Origin source
Today, the High Court of London specified its verdict of March 29 this year in the case of the bonded loan that was granted to Russia by Ukraine in December 2013. As reported by the Russian Ministry of Finance, the court ordered Kiev to pay both the face value of the bonds in the amount of $ 3 billion, and the unrealized coupon payment of $ 75 million, as well as the penalty interest accrued on these amounts. The Ukrainian Ministry of Finance interprets the decision of the court otherwise, considering the main extension of the delay in the beginning of debt collection before the January appeal hearing.

It's about a $ 3 billion loan in the form of bonds bought by Russia in December 2013, when Ukraine was led by Viktor Yanukovych. The maturity date for bonds is December 20, 2015. Kiev insisted on restructuring the debt, but not having received it, introduced a moratorium on the repayment of obligations. In February 2016, the Ministry of Finance filed a lawsuit with the London High Court to recover $ 3 billion of debt, interest and court expenses from Kiev.

On March 29, the High Court granted Russia's request for an expedited review of the lawsuit against Ukraine. This procedure provides for judicial proceedings without a full-scale trial, which could take several years. Although formally the March decision did not oblige Kiev to begin to extinguish the debt, in fact the court then recognized the absence of the Ukrainian side of weighty arguments in order not to do so. The Russian Ministry of Finance already then considered the court's decision as the final victory, the Ukrainian Ministry of Finance announced its intention to appeal.

Today the court clarified its verdict. He ordered Ukraine to pay to Russia the nominal value of the bonds purchased in 2013 from the NWF's funds - $ 3 billion, the amount of the unfulfilled coupon payment of $ 75 million and the penalty interest accrued on these amounts. Interest on the amount of the principal debt on bonds is payable at a rate of 8% per annum, interest on the unpaid coupon at the rate of "3-month LIBOR in US dollars plus 2% per annum." Payments of penalty interest are calculated from December 21, 2015 and are made by the date of full performance of obligations. Thus, every day of delay will cost the budget of Ukraine more than $ 673 thousand, the Russian Ministry of Finance underlines in its report.

In addition, the High Court of London ordered Ukraine to reimburse Russia for part of the costs associated with the legal proceedings, in the amount of £ 2.8 million, 50% of which the debtor must pay no later than September 20, 2017. Moreover, the court ruled that Russia's demand for compensation by Ukraine for the rest of the expenses incurred due to the debtor's failure to fulfill its obligations under the bonds will be considered after the decision on Ukraine's appeals against the verdict of the High Court was filed in June. Hearings in the Court of Appeal are scheduled for January 2018.

In view of the short time remaining before the appeal was considered, the court extended the effect of its earlier decision, which precluded the possibility of taking coercive measures to return borrowed funds, before the verdict of appeal was passed.

"The Ministry of Finance proceeds from the fact that the facts established by the High Court of London will become a necessary and sufficient basis for the court of appeal to confirm the verdict in favor of Russia," the Russian Finance Ministry said. The Ministry of Finance of Ukraine in today's decision of the High Court allocates another - the satisfaction of the petition of Kiev for a new suspension of the implementation of the decision of March 29, 2017. "The court accepted the position of Ukraine and decided to continue the suspension of the execution of the judgment on March 29 until the completion of consideration of the appeal of Ukraine," the Ukrainian department said.