Russian Federation says trustee seeks judgment against Ukraine over $3 billion eurobond

By Wendy Van Sickle

Columbus, Ohio, July 28 – The independent trustee for the $3 billion eurobond issued by Ukraine and held by the Russian Federation filed an application for summary judgment Thursday against Ukraine in the English Court, according to a press release from the Russian Federation.

The Russian Federation filed the lawsuit against Ukraine in February to recover all amounts owed under the eurobond, as well as all costs incurred by the Russian Federation in prosecuting the legal action.

According to Thursday’s press release, the application filed by the trustee requests that the court award a judgment requiring Ukraine to repay the eurobond in full with interest.

The application seeks judgment without a trial, “on the ground that Ukraine has no real prospect of successfully defending the trustee’s claim,” the Russian Federation said.

“Ukraine has acknowledged that it failed to repay the eurobond when it matured,” states the news release. “In its defense, Ukraine argued that it never authorized the eurobond and that the eurobond is also voidable because Ukraine supposedly agreed to issue the eurobond under duress, despite the fact that it received $3 billion in payment for the eurobond and credited this payment to its foreign exchange reserves.”

The Russian Federation said Ukraine never expressed this position before filing its defense and that the defense “is manifestly inconsistent with Ukraine’s public statements and representations made at the time the eurobond was issued, as well as Ukraine’s actions and statements since then.”

These actions, the Russian Federation said, include Ukraine’s payment of all three scheduled, pre-maturity coupons on the eurobond, its insistence that the eurobond be included in its September 2015 debt restructuring transaction and its declaration of a payment moratorium on the eurobond in December 2015.

A hearing on the summary judgment application is expected to take place toward the end of the year. If the application is granted, a final judgment may be awarded by the court in early 2017.

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