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Court bans repayment of 3bn dollar loan to Russia

The lawsuit was filed by a Fatherland member.

Court bans repayment of 3bn dollar loan to Russia
Photo: Photo: trud-ost.ru

The Holosiyivskyy district court of Kyiv on 30 May banned the state authorities of Ukraine from repaying the body and interests on the loan at 3bn dollars, which Russia gave in 2013.

The lawsuit has been filed by the head of Luhansk regional party organization of Fatherland, Iryna Veryhina, with the assistance of the Power of Law public movement.

Ukraine owes Russia 3bn dollars on the controversial bonds that were issued in late 2013 as part of the aid to the regime of Viktor Yanukovych in exchange for his waiver of the Association Agreement with the EU. Russian President Vladimir Putin has promised 15bn dollars to Yanukovych, but gave only 3bn dollars because of the Revolution of Dignity.

Last year, Ukraine restructured the majority of Eurobonds, having convinced private creditors to write off 20% of the debt. However, Russia said it was an official lender, and rejected Ukraine's proposal. Ukraine, in turn, refused to repay the loan without restructuring and imposed a moratorium on its payments.

On 1 January, Russia announced that Ukraine failed to pay 3.075bn dollars, which makes it a default state. The Russian authorities have hired The Law Debenture Corporation plc and started the procedures necessary to file a claim with the English court.