Ukraine vows to fight Russian US$3b debt claim in London court

KIEV: Kiev vowed on Thursday to fight Russia's demand for the full repayment of a US$3 billion (RM12.53 billion) loan it issued to Ukraine in 2013 under ousted Moscow-backed president Viktor Yanukovych.
Russia on Wednesday filed a lawsuit with the High Court in London after the two sides failed to reach a private settlement over the debt.
The eurobond was issued on the Irish Stock Exchange and is governed by English law.
"Ukraine intends and is fully ready to decisively defend its interests concerning these eurobonds in the English court," the finance ministry said in a statement.
Kiev had been due to repay the eurobond purchased by Moscow from Kiev on Dec 21.
But it viewed Russia's loan as private debt that fell under the restructuring terms it agreed with other commercial lenders last year.
That deal included a 20% writeoff and extended some of the repayment terms until 2027.
The International Monetary Fund has sided with Russia by ruling that the loan carried official rather than commercial status.
Yet the Fund also amended its policy in order to carry on issuing tranche payments under its four-year US$17.5-billion Ukrainian rescue package even though the former Soviet country is now formally in default.
The new leadership that took power after Ukraine's February 2014 pro-Western revolution has branded the Russian loan as a bribe paid to Yanukovych for his decision to abruptly reject a landmark EU free trade and political association pact in 2013.
That deal has since been ratified and went into effect at the start of the year.
Germany had spearheaded months of acrimonious debt negotiations in order to avoid yet another complicating factor adding to the neighbours' already hostile relations.
Kiev has accused the Kremlin of orchestrating and backing the pro-Russian separatist insurgency that has claimed more than 9,000 lives in eastern Ukraine — a charge Moscow flatly denies.
Germany presented an offer to Kiev in December that would have seen Ukraine make US$1-billion annual payments to Moscow until 2018.
But Ukrainian Finance Minister Natalie Jaresko rejected the proposal and insisted on a partial write-down of the debt.
Moscow's Vedomosti business daily reported that Russia is also seeking incurred interest payments and Ukraine's full coverage of all upcoming court fees.
It was not immediately clear when the London court intended to rule on the dispute. — AFP