A court in Kyiv has arrested the shares of “daughters” VTB, Prominvestbank and Sberbank at the suit of the former head of PrivatBank


Moscow. September 12. INTERFAX.RU – the Appellate court of Kiev decided to seize the shares of Ukrainian “daughters” Russian banks with state participation – VTB, Sberbank and Prominvestbank (Kyiv), reads the court ruling published in the register of court decisions.

According to the document, the definition adopted in connection with the statement on the claim of the former head of the Board of PrivatBank Alexander Dubilet and 17 companies, which had assets in the Crimea, on the recognition and implementation of decisions of the International court of arbitration in the Hague (Permanent Court of Arbitration) from may 2 to collect from the Russian Federation.

According to the materials of the case, the Hague Tribunal awarded the plaintiffs a total of about $130,5 million in compensation for the property, $9.2 million of compensation expenses for litigation, plus interest on the said amount at the rate of 12-months. LIBOR+1% compound interest annually.

In definition of Appellate court of Kiev stated that the plaintiffs appealed to him for recognition of arbitration decisions in July of this year, and on 17 July a Ukrainian court has officially notified the debtor on receipt of such application. In August, the plaintiffs initiated the arrest of shares of Ukrainian “daughters” Russian banks and other measures.

In particular, the decision of the court on 5 September, VTB Bank, Prominvestbank and Sberbank is also prohibited to carry out the liquidation or reorganization of a legal entity to take any action to alienate the banks of movable and immovable property, including under contracts of purchase and sale, exchange, gift and so on.

Citing media reports, the appellate court found that the defendant was taking all possible measures to implement its intention to sell or terminate the activities of a number of business entities and banking institutions in Ukraine, in particular, referred to the “daughters” of Russian banks.

The definition States that it shall enter into force upon its adoption, but may be appealed to the Supreme court within 30 days.

As reported, the Hague arbitration previously reported on the decision in favor of the plaintiffs in the case, however, his details were missing. According to the regulations of the UNCITRAL (United Nations Commission on International Trade Law) of 1976, which referred to arbitration, an award shall be made in writing and is final and binding on the parties. The parties undertake to carry out the award without delay.

The document also States that an arbitral award may be made public only if both parties agree. According to regulations, within 30 days after receiving the decision, either party, with notice to the other party, may request the arbitral Tribunal to give an interpretation of the award, which is given 45 days after receipt of the request.

Claims to Russia

The above proceedings were initiated by the plaintiffs against Russia on 19 June 2015 under the agreement between the governments of Russia and Ukraine from 27 November 1998 on the protection of investments of Russian-Ukrainian bilateral investment contract (bits) and in accordance with the rules of UNCITRAL.

The plaintiffs claimed that Russia violated its obligations by adopting August 2014 measures that prevent their investment in the Crimea real estate and ultimately led to the expropriation of these investments. The Tribunal was approved on 27 October 2015. Members of the Tribunal are right Dr. andrés Rigo Sureda (Chairman of the arbitral Tribunal), Professor Michael of rizman (appointed by the claimants) and Professor, doctor of law, Rolf Knipper (designated by the competent authority, Michael Hwang, instead of the defendant).

Among the plaintiffs, in particular, the company “AEROBUD”, “Crimea development”, “Hiba-Tur”, “UBK-invest”, “Edelweiss-2000”, PE “Planeta”, “Privation”, “Prevalent”, “Dan-Panorama”, “Sanatorium Energetik” AMC “Financial capital” and AMC “Fiscal vector”.

Under consideration by the Hague arbitration of such a claim of “Ukrnafta” and “Stability” to the Russian Federation reached the stage of hearings on the merits, which was held on February 5-6 in Geneva, but also without the participation of the Russian Federation, in spite of the directional invitation.

The Tribunal questioned two witnesses from the plaintiffs and valuation expert, also presented by the plaintiffs, and also asked questions to representatives of the plaintiffs. At the end of the hearing, the parties were informed that, taking into account the special circumstances, namely, the absence of one of the parties to the proceedings and only one valuation expert, the arbitral Tribunal intends to appoint its own expert, which it asks concrete questions concerning the definition of the amount of compensation owed to the plaintiffs.

In such cases, Igor Kolomoisky, “the Airport “Belbek” (Sevastopol, Crimea) and PrivatBank against Russia, which was launched first in January and April 2015, the last court hearing was held in early November, 2017 in the Hague and also in the absence of the Russian Federation. The compositions of the tribunals examined witnesses and experts under the Russian law on the part of the plaintiffs, as well as experts in Russian law designated by the arbitrators. In addition, the composition of the arbitral tribunals were asked a series of questions to the plaintiffs, which they partly answered at the hearing. In the case of Kolomoisky and “the Airport “Belbek” the court, in addition, was briefed by the assessor on the part of the plaintiffs and demanded that the expert updated his report.

In both cases the parties were given the opportunity to comment on the questions raised by the composition of the arbitration as well as other matters raised at the hearing, in the form of written explanations within 15 and 25 January 2018 respectively.

In another similar case – “Luksor”, “Dniproazot” and others against Russia the court on 29 August 2017, notified the parties that, after reviewing the written and oral explanations of the parties and after some discussion, intends to make a final decision. This decision will be confirmed by the competence of the Tribunal on consideration of the present dispute and all stated requirements will be declared admissible and decided on all questions relating to liability and determine the amount of damages.

15 September 2017, prompting the views of the parties, the arbitral Tribunal established the procedural calendar for the submission of written and oral positions on the issues of liability and determining the amount of damages, which, among other things, provides for a hearing on liability and determining the amount of losses from 25 to 29 June 2018. In accordance with the procedural calendar, November 30, 2017, the Tribunal sent the parties the issues relating to liability and determine the amount of damages.

A similar claim 16 months after Dubilet and the above 17 companies filed to the Hague Tribunal and “Naftogaz of Ukraine”.

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