Ukraine presents to London court evidence of Russian pressure during receipt of "Yanukovych debt"

The Ukrainian Ministry of Finance, acting on behalf of the State, today, October 7, presented to the English court the evidence in the case regarding the Ukrainian debt over $3 billion worth of Eurobonds repurchased by the Russian Federation in December 2013 in line with the agreement between Russian President Vladimir Putin and then President of Ukraine Viktor Yanukovych.

According to the statement on the website of the Finance Ministry, the evidence includes information about the role of Russia in the disputed transaction and its enormous pressure on Ukraine. "At present, Ukraine awaits from Russia evidence in response, which is to be presented November 4, 2016, before the application regarding the issuance of decision by way of simplified proceedings is heard by the English court in January 2017," the document says. 

The statement also notes that the with the evidence presented, Ukraine puts forward a confident and well-reasoned response to an attempt by Russia to convince the English court to rule on the claim, depriving our country of the opportunity to present all of its arguments in full-fledged proceedings.

According to the statement, Ukraine does not dispute the fact that Russia is the actual party to the deal, noting however that the Russian Federation requires repayment of the debt, despite its illegal actions against Ukraine, which, in fact, forced it to conclude this agreement, and despite the devastating losses that Russia has caused and continues to cause Ukraine.

 Russia lodged a suit with the London High Court against Ukraine after Kyiv defaulted on paying the principal amount and interest on a $3 billion loan. The fact that the bonds were purchased via the Irish Stock Exchange makes the disbursement a private creditor debt. However, the Russian side insisted that this was an interstate debt, as the buyer was the state-owned National Wealth Fund. Ukraine sought the $3 billion Eurobond to be restructured under sovereign and sovereign-guaranteed bonds, but Russia reiterated it did not consider the debt as commercial. In the course of negotiations, Russian authorities also insisted on better restructuring terms than those offered to other creditors, which is prohibited by the bond swap memorandum between Ukraine and the bond holders.

Ukraine restructured the debt under the IMF's Extended Fund Facility program approved by the IMF Executive Board in March last year. In December 2015, the IMF decided that the claim arising from the $3 billion Eurobond issued by Ukraine on December 24, 2013, and held by Russia's National Wealth Fund, was an official claim for the purposes of the fund's policy on arrears to official bilateral creditors. At the same time, the fund revised its lending policy with respect to debtor countries with payment problems, including Ukraine, enabling the IMF to continue its lending program, even in the case of non-repayment of Russia's loan.

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