Summary Judgment Application Filed on Ukraine’s US$3 billion Eurobond Held by the Russian Federation
28 July 2016. Moscow. The Ministry of Finance of the Russian Federation notes that the independent Trustee for the US$3 billion Eurobond issued by Ukraine and held by the Russian Federation today filed an application for summary judgment against Ukraine in the English Court. The application filed by the Trustee, the Law Debenture Trust Corporation PLC, under the English Civil Procedure Rules requests that the Court strike out Ukraine’s Defence and award a judgment requiring Ukraine to repay the Eurobond in full with interest.
The application seeks judgment without the need for a trial, on the ground that Ukraine has no real prospect of successfully defending the Trustee’s claim.
Ukraine has acknowledged that it failed to repay the Eurobond when it matured. In its Defence, Ukraine argued that it never authorised 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 US$3 billion in payment for the Eurobond and credited this payment to its foreign exchange reserves. Ukraine’s position, which it never expressed before filing its Defence, 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 and statements include Ukraine’s payment of all three scheduled, pre-maturity interest coupons on the Eurobond, its insistence that the Eurobond be included in Ukraine’s September 2015 debt restructuring transaction, and its declaration of a payment moratorium on the Eurobond in December 2015.
Ukraine has also raised a number of geopolitical arguments that are irrelevant to the Trustee’s straightforward debt claim, as well as being inaccurate in many important respects, in order to divert attention from Ukraine’s failure to honor its own contractual obligations. The Ministry of Finance believes Ukraine has included the political background material in its Defence as part of its tactics to obscure and confuse matters as much as possible, in an attempt to avoid a summary (i.e., early) determination of this matter.
A hearing on the summary judgment application is expected to take place toward the end of 2016. If the application is granted, there will be no need for a full trial, and a final judgment may be awarded by the Court in early 2017.