Ukraine compensates some Russian costs in $3 bln dispute

MOSCOW, Sep 21 (PRIME) -- Ukraine has fulfilled a ruling of the High Court of Justice in London to compensate part of Russian costs in a U.S. $3 billion dispute having transferred 1.16 million pounds, the Russian Finance Ministry said on Thursday.

Konstantin Vyshkovsky, director of the ministry’s state debt and state financial assets department, said earlier that Russia did not expect Ukraine to redeem a $3 billion Eurobond debt before a decision by the court of appeals, but expects Kiev to fulfill another promise to compensate a part of Russia’s court expenses.

“The Law Debenture Corporation PLC company, acting as a trustee of interests of Russia as a sole owner of Ukraine’s $3 billion bonds, confirmed the receipt of a payment from Ukraine in the amount of 1.16 million pounds. Ukraine has thus fulfilled a ruling of the High Court of Justice to compensate a part of court expenses incurred by the Russian side,” the ministry said.

Russia bought Ukraine’s $3 billion 2-year Eurobonds in December 2013 and later rejected restructuring conditions offered by the country to its commercial creditors. Kiev insisted that the terms of debt repayment to Russia should be the same as for private creditors. The International Monetary Fund (IMF) recognized the debt as sovereign.

 In February 2016, Russia filed a lawsuit with the High Court of Justice in London demanding that Ukraine pay the main debt of $3 billion, as well as $75 million of the last coupon income and additional interests accrued since December 20, 2015, the maturity date of the securities.

In March 2017, the High Court of Justice in London sided with Russia and obliged Kiev to redeem the sum. In June, the court pointed out that each day of non-payment results in the penalty of $673,000 for Ukraine. The court also obliged Ukraine to redeem 2.8 million British pounds of Russia’s legal costs.

Ukraine filed an appeal against the decision in June, and the Court of Appeal will hear it in January 2018.

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