Russia lodged appeal in “Yanukovych debt” case
Russia has lodged an appeal with the Supreme Court of the United Kingdom against the decision by an English court to uphold the appeal filed by Ukraine in the dispute with the Russian Federation on the so-called Viktor Yanukovych debt case amounting to USD 3 billion.
It’s reported that the appeal to the Supreme Court was filed by the Law Debenture Trust Corporation, which represents the interests of the Russian Federation. It is expected that the appeal hearing will take place no earlier than June 2019.
A reminder that on 14 September 2018, the Court of Appeal in England upheld the appeal filed by Ukraine in the dispute with Russia on the so-called Yanukovych debt amounting to USD 3 billion. Currently the High Court in London should get back to consideration of the debt dispute “within the framework of classic legal proceedings, taking into account all the political elements of the case”.
In December 2013, Ukraine issued Eurobonds for USD 3 billion at 5% per annum, which were bought out by the Russian Ministry of Finance. In February 2016, the Russian Ministry of Finance filed a lawsuit on debt recovery from Ukraine.
Megafon to go into litigation with Hewlett-Packard in California
Russian company Megafon has turned to the court of the Northern District of California with a lawsuit against Hewlett-Packard Enterprise. The Russian mobile operator claims indemnification for failures in the operation of the IT system acquired from its American partner.
According to Reuters, citing the text of the lawsuit, the contract between Megafon and the Russian division of Hewlett-Packard Enterprise was concluded in 2013. From that time, HPE has started implementation of a new User Data Repository system into the Megafon network, which is a repository with technical information about subscribers and services available to each of them.
The system malfunctioned and also had performance problems. Because of this, Megafon experienced accidents in the networks several times in November 2016 and April-June 2017. This has caused considerable damage to the Russian cellular service operator.
Megafon has not only lost its initial investment into this IT system, but also has faced the prospect of unknown additional expenses for its replacement, which are estimated to be at least USD 28 million, not mentioning claims filed by subscribers, partners from among virtual mobile operators and, possibly, shareholders, the lawsuit states.
Ban on liquidation or restructuring of VTB Bank’s Ukrainian subsidiary cancelled
The Kyiv Court of Appeal has partially upheld a complaint filed by Russia’s VTB Bank and cancelled a ban on the liquidation or restructuring of the latter’s Ukrainian subsidiary.
At the same time, the court refused to uphold the complaint filed by VTB Bank in full, namely, it denied the bank’s request to oblige the private executor to remand the ruling of the Kyiv Court of Appeal of 5 September 2018 without enabling it.
A reminder that the Russian VTB Bank wants to surrender the license of its Ukrainian subsidiary, but legal restrictions do not allow this to be done.
The point at issue is that VTB Bank has paid deposits to its customers through the sale of property collected from borrowers. But due to the ruling of the Kyiv Court of Appeal of 5 September under which VTB Bank shares have been arrested, the institution is prohibited from selling its assets.
Therefore, the bank faced a liquidity shortfall, and introduced huge commissions and restrictions on the withdrawal of its funds.
At the same time, the National Bank revoked banking and general licenses for to conducting of currency transactions by BM Bank (owned by VTB Group). This bank decided to voluntarily terminate its banking activities without liquidation of the legal entity.
Court saw no violation of investment obligations after Ukrtelecom’s privatization
The Economic Court of Kyiv has rejected the claim filed by the State Property Fund against ESU LLC on termination of the privatization agreement of sale and purchase of the controlling stake (92.79%) in Ukrtelecom and on recovery of more than UAH 2 billion. The related decision was included in the Unified Register on 21 November, 2018.
The court also refused to uphold a counterclaim filed by ESU against the State Property Fund of Ukraine on recognizing the obligations under the agreement as terminated due to the impossibility of their execution. In the motivational part, the court agreed with arguments on proper execution of the terms and conditions of the agreement.
The court has established proper execution of conditions related to ESU LLC making investments equivalent to at least USD 450 million. At the same time, the court found arguments made by the State Property Fund of Ukraine about non-execution of obligations to transfer the special-purpose telecommunication network to state authorities on the part of ESU as unconvincing, and rejected them.
Since the court established that the obligation under the Agreement on ensuring SPTN transfer to state ownership was actually implemented, and it was for these reasons that the initial claim was rejected, the court found no reasons to uphold the counterclaim.
According to reports, back in 2015, Ukrtelecom undertook an obligation to redeem the bonds of its parent company ESU (SCM subsidiary) for the amount of UAH 2 billion from two state banks, Oschadbank and Ukreximbank. But the telecom operator failed to sell its mobile asset, Trimob, which meant the company had no funds to cover the bonds. The terms of debt repayment expired back in March 2018.
Quinn Emanuel Urquhart & Sullivan LLP and Asters score for Oschadbank
Asters has acted as local Ukrainian counsel to JSC Oschadbank, one of the largest financial institutions in the country, in connection with its claim against the Russian Federation for recovery of compensation as a result of the total loss of its investments in Crimea, with Quinn Emanuel Urquhart & Sullivan LLP acting as the lead counsel.
On 26 November 2018 an international arbitral tribunal issued its final award sustaining Oschadbank’s claims in full. The amount to be recovered is USD 1.3 billion plus post-award interest. This award has become the first victory of a Ukrainian state-owned company in a matter concerning restoration of Crimea-related rights and interests through an international investment protection mechanism.
Asters’ key team working on this project included partner Svitlana Chepurna, senior associates Anna Tkachova and Maryna Golovko under the general supervision of the firm’s co-managing partner Oleksiy Didkovskiy.