Russia is bringing its huge economic fight with Ukraine to Britain.
The countries are currently in the middle of a dispute about the failure of Ukraine to repay a bond worth $3 billion. Russia’s Finance Ministry has now officially filed a lawsuit in the UK over the case.
Finance minister Anton Siluanov confirmed that Russia had filed the lawsuit with the High Court in London on Wednesday, speaking at a press conference in Moscow.
Reuters reports that at the conference, Siluanov said Moscow had engaged in “repeated unsuccessful attempts to encourage Ukraine to constructive dialogue on debt restructuring and to recognition of the fact that the Eurobond Russia invested in are official credit and the claim should be settled on terms better than those Ukraine proposed to its private creditors.”
Siluanov didn’t explicitly say why Russia had chosen Britain as the location for the filing, but argued that he believed that the UK’s transparent, independent judiciary would let Russia’s interests be protected.
The lawsuit is the latest in a line of tit-for-tat disputes, bans, and lawsuits since the Ukrainian peninsula of Crimea was “reunified” with Russia by way of well equipped, organised, and trained “self-defence units,” who were actually Russian special forces, nearly two years ago.
Russia first announced that it was suing Ukraine in January, just after Ukraine installed a moratorium on servicing its debt as it struck a restructuring agreement with all of its creditors apart from Russia. In other words, it stopped paying back Russia but carried on paying back everyone else.
This led to Russia and Ukraine fighting publicly about the state of affairs and various economic and financial disputes between the two countries have intensified.
For example, a few days before Russia announced its intentions to sue Ukraine, Ukraine cut the power supplies to Crimea, which Russia annexed in March 2014, again. The following day Russia cancelled a free-trade agreement and imposed new trade restrictions against Ukraine.
Here’s the full statement from the Russian government (emphasis ours):
The Ministry of Finance of the Russian Federation today filed a lawsuit in the English High Court against Ukraine to recover all amounts owed under Ukraine’s US$3 billion Eurobond held by the Russian Federation, as well as all costs incurred by the Russian Federation in bringing this legal action.
In its lawsuit the Russian Federation demands that Ukraine pay the principal of the Eurobond in the amount of US$3 billion, the unpaid December 2015 coupon in the amount of US$75 million, and the interest beginning from December 20, 2015, in addition to the Russian Federation’s costs in bringing the enforcement action.
This lawsuit was filed after numerous futile attempts to encourage Ukraine to enter into good faith negotiations to restructure the debt, and to acknowledge that the Eurobond held by the Russian Federation is an official credit and must be afforded treatment better than that previously provided to Ukraine’s private creditors.
So far there has been no official comment on the lawsuit from the Ukranian government.
This is a developing story, and Business Insider will update it as more information becomes available.
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