Russia Files Suit Against Ukraine in London Over $3 Billion Debt

Earlier in the day, Ukrainian Foreign Minister Pavlo Klimkin said Kiev viewed an unpaid $3-billion as a “bribe” to former Ukrainian President Viktor Yanukovych, whose government secured the debt in late 2013.

The Russian Finance Ministry filed a lawsuit in the High Court of London on February 17 to secure repayment of the debt owed by Ukraine, after goodwill talks with Ukraine failed to work out.

Kiev had been due to repay the eurobond purchased by Moscow from Kiev on Dec 21.

Russia’s argument that the bonds should not be subject to the terms of the commercial debt restructuring is backed by the International Monetary Fund, The New York Times says.

The $3bn eurobond had a maturity date of 20 December of previous year.

Ukraine had until December 21, 2015, to pay back the investment, but it missed that deadline and negotiations between Kiev and Moscow hit a roadblock as the two countries could not agree on new terms, the Russian government broadcaster First Channel reported.

That deal has since been ratified and went into effect at the start of the year.

The lawsuit was a last resort as Kiev was not ready to negotiate a mutually acceptable compromise, Siluanov said.

Despite Moscow’s repeated statements that the Crimean referendum on secession from Ukraine was in line with the worldwide law and the UN Charter and in conformity with the precedent set by Kosovo’s secession from Serbia in 2008, the West and Kiev have refused to recognize the legality of Crimea’s reunification with Russian Federation.

But Ukrainian Finance Minister Natalie Jaresko rejected the proposal and insisted on a partial write-down of the debt.

In turn, Russian Federation blocked the traffic of trucks registered in Ukraine and, later on, their transit.

It was not immediately clear when the London court meant to rule on the dispute.