Cases

 National Bank won action against Kostyantyn Zhevago

On 1 October the Shevchenko District Court of Kyiv ruled to recover UAH 1.539 billion from the ex-owner of Finance and Credit Bank, Kostyantyn Zhevago, in favor of the National Bank of Ukraine as a debt service payment under refinancing loans provided earlier.

At the same time, the court rejected a counterclaim filed by Mr. Zhevago on invalidation of the surety agreement concluded with the National Bank.

The National Bank noted that the proceedings lasted for almost 3.5 years. As of today, the total amount of indebtedness of the Finance and Credit Bank to NBU under all refinancing loans is UAH 6.75 billion.

Court dismissed claim on Dniproavia nationalization

The Economic Court of Kyiv City dismissed the claim filed by the State Property Fund (SPF) against Galtera in the case on termination of the sale and purchase agreement of Dniproavia shares owned by Igor Kolomoisky.

The SPF explained its claim by Galtera’s failure to properly perform its obligations to transfer the runway, radio-beacon system and the land plots allocated for the mentioned purposes into state ownership by 2 September 2014.

Also, following SPF estimates, Galtera invested only UAH 142.1 million out of the planned amount of UAH 882.1 million to be spent to upgrade Dnepropetrovsk Airport by 31 December 2014.

The court ruled in its decision that the Cabinet of Ministers determined the state body, to which the disputed property should be transferred, only on 4 November 2015. With that in mind, starting from April 2014, that is, since the start of the conflict in Donbas, the airport was used by the military, which made its reconstruction impossible.

“Failure to perform the investment agreement provisions in full was caused not by the defendant’s unfair practices, but by a situation beyond its reasonable control, caused by the anti-terrorist operation in the east of Ukraine started in March 2014, which made it impossible to complete the Investment Program in a timely manner,” the court ruled.

As a result, the court concluded that the failure to perform the provisions of the investment agreement in full was due not to the defendant’s unfair practices, but for reasons beyond its control.

PrivatBank wins appeal against former owners in London court

The Court of Appeal of England and Wales upheld the appeal petition filed by state-owned PrivatBank against the ruling of the court of first instance, following which the consideration of the bank claim against its former owners, Igor Kolomoisky and Gennady Bogolyubov, did not fall within the jurisdiction of this court.

The court order on a worldwide asset freeze, received in December 2017, shall remain in force until the court adopts a ruling on merits. In its decision, the Court of Appeal fully upheld the claim filed by PrivatBank in respect of all matters, thus reversing the judgment made by Judge Fancourt in December 2018.

Judges of the Court of Appeal concluded that the bank has a sufficient case for the conducting of a judicial examination to recover USD 1.9 billion in full (including interest thereon — USD 3 billion), as stated in the claims.

The Court of Appeal ruled that, under the circumstances, the bank claim should be examined in England on its merits.

The Court also refused to grant the defendants a permission to appeal the ruling and ordered them to file their lines of defense in the claim by the end of November.

A reminder that the hearings in the Court of Appeal in London were held as open proceedings for 5 days in July.

In December 2017, PrivatBank filed a claim with the High Court of London against Igor Kolomoisky, Gennady Bogolyubov, as well as against Teamtrend Ltd, Trade Point Agro Ltd, Collyer Ltd, Rossyan Investing Corp, Milbert Ventures Inc. and ZAO Ukrtransitservice Ltd, allegedly owned or controlled by them.

All the defendant’s companies were mentioned in the rulings by the Pechersky District Court of Kyiv of 29 July 2016, which provided for the seizure of a number of accounts in the Cyprus branch of PrivatBank as part of the investigation on the return of NBU refinancing loans amounting to UAH 19 billion.

Following the audit undertaken at PrivatBank, the Kroll detective agency confirmed that the financial institution was, prior to its nationalization at the end of 2016, the subject of large-scale and coordinated fraudulent actions, which led to losses of at least USD 5.5 billion.

On 4 December 2018, the court acknowledged that PrivatBank filed a claim to obtain the jurisdiction of London court to sue Kolomoisky and Bogolyubov.

The judge argued the conclusion by the fact that the bank did not provide any direct explanation as to why it filed a claim against these companies in December 2017, and none of its arguments presented later was convincing. In particular, some of the justifications filed by the bank could not be presented in December 2017, since the bank was not aware of them.

At the same time, the judge admitted that the bank had reasonable claims against Kolomoisky and Bogolyubov amounting to at least several million dollars. Moreover, he added that the bank did not have the right to select a court institution acceptable to it. In turn, its former owners had the right to protect their interests in Switzerland, at the place of their permanent residence.

As an interim measure, the court issued an order for the worldwide freezing of assets owned by the bank’s former owners and by the six companies mentioned above for the amount of more than USD 2.5 billion.

The court also ordered Kolomoisky and Bogolyubov to disclose information about all their assets to a limited circle of persons directly involved in the consideration of the case.