KIEV (Reuters) - The following is a list of key legal cases Ukraine and its state-owned or part-owned firms are involved in, after Ukraine’s state-owned energy firm Naftogaz won a long-running dispute with Russia’s Gazprom:
1/ NAFTOGAZ VS GAZPROM
Naftogaz said on Wednesday Russia’s Gazprom would have to pay it $2.56 billion after a Stockholm court found in Naftogaz’s favor in the final stage of a long-running legal battle over Gazprom’s supply of gas to Naftogaz.
In June 2014, Gazprom and Naftogaz lodged multi-billion-dollar claims against each other with the Stockholm arbitration court, which resolves commercial disputes.
The disagreement was a by-product of the worsening relations between Kiev and Moscow since Russia’s annexation of Crimea and the eruption of Russian-backed separatist violence in Ukraine’s Donbass region, which has killed more than 10,000 people.
The latest ruling in Stockholm, which concludes the legal dispute, centered on Naftogaz’s claims that it was owed compensation for Gazprom not pumping a certain volume of gas per year via Ukraine and paying too little for what it did send through Naftogaz pipelines.
Gazprom has responded by saying the court’s decision had created a “material imbalance, which infringes the basic principals of Swedish law, which regulates the (gas) contract”, and that it would not restart supply to Naftogaz as an additional agreement to the current deal has still not been approved.
In 2016 Russia filed a lawsuit to London court demanding Ukraine pay back $3 billion borrowed in 2013 under former President Viktor Yanukovich. The debt was structured in the form of a Eurobond governed by English law.
Moscow wants the bond to be repaid in full but Ukraine says Russia should have participated in a 2015 restructuring of its sovereign Eurobonds, like private sector bondholders.
In March 2017 a British court refused to send the case to a full trial saying that Ukraine had failed to offer justiciable defense, but the country received the judge’s permission to appeal and was granted a stay of execution until the appeal hearing has been concluded.
The court of appeal held a week-long hearing in January 2018. Its decision is due in the coming months.
3/ PRIVATBANK PART I
Ukrainian largest bank – PrivatBank, which was nationalized in December 2016 - commenced legal proceedings in the High Court in London against Igor Kolomoisky and Gennady Bogolyubov, its former owners and management.
On Dec. 19, 2017, the court granted a worldwide freezing order against Kolomoisky and Bogolyubov, as well as against six companies they are believed to own or control.
Kolomoisky and Bogolyubov have challenged the justification for the nationalization and accused the central bank of misrepresenting the state of PrivatBank’s finances.
The freezing order was granted on the basis of detailed evidence put to the court that the two extracted almost $2 billion from the bank through a series of dishonest transactions, which had the effect of transferring the funds to companies that they secretly owned or controlled. Through these initial legal proceedings, with interest, PrivatBank is seeking to recover over $2.5 billion.
4/PRIVATBANK PART II
On Nov. 8, 2017, international bondholders brought two claims worth a combined $375 million plus interest against Ukraine’s now state-controlled PrivatBank in the London Court of International Arbitration.
They creditors are disputing the Ukrainian authorities’ decision to convert a total of $555 million worth of Eurobonds into equity. They contest there were better options.
5/PRIVATBANK PART III
Ukraine has not ruled out legal action against the local unit of the PwC consultancy in order to recoup some of the costs of bailing out lender PrivatBank which had been audited by the firm, Finance Minister Oleksandr Danylyuk said last year.
Kiev withdrew PwC’s right to audit Ukrainian banks as punishment for what the central bank says was its failure to flag risky lending practices at the country’s largest lender, PrivatBank. PwC has said the ban is unjustified.
In December 2017, the Nicosia District Court in Cyprus froze $820 million of assets of the flagship business group owned by Ukraine’s richest man Rinat Akhmetov, Systems Capital Management (SCM), in connection with a long-lasting legal dispute over the Ukrtelecom case.
The applicant, Cyprus-based firm Raga, complained that SCM had not paid it in full for the 2013 sale of telecoms group Ukrtelecom. Raga belongs to the former Ukrainian banker Denys Horbunenko. Raga says Ukrtelecom was sold to Akhmetov for $860 million in 2013, Akhmetov paid only $100 million.
SCM has said it strongly disagrees with the Cyprus ruling and has appealed it. It also says Raga’s lawsuit is groundless.
In January 2018 a Dutch court issued a provisional order to freeze the shares of SCM group companies registered in the Netherlands in connection with the lawsuit.
The case is important for the state because the government wants to take Ukrtelecom back from private hands, saying that the investment commitments have not been fulfilled.
Reporting by Natalia Zinets in Kiev and Marc Jones in London; Editing by Alison Williams
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