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The last resort in a debt dispute between Ukraine and Russia may become the high court in London

The court of Appeal of London (Court of Appeal) in the future can still be appealed to the Supreme Court (Supreme Court), reported in the preliminary prospectus Eurobonds of Ukraine, the text of which has “Interfax-Ukraine”.

“If Ukraine will lose the Appeal to the appellate court, or further to the Supreme court, and will not receive the court decision on the suspension of the execution of the decisions of the High courts of justice (High Court) from March 29, 2017, it will be subject to execution,” according to the document.

Hearings in the court of Appeal is scheduled for January 2018.

Ukraine also reiterates an existing requirement of the International monetary Fund (IMF) on “good faith” settlement of the specified debt.

“In December 2015, the IMF determined that the Eurobonds (in the ownership of RF – if) is the official duty . .. while the updated rules allow the IMF to continue to provide Ukraine with financing (despite the presence of outstanding official debt – if), a condition exists that the country must “in good faith” to settle these obligations”, – stated in the prospectus.

As reported, the High court in London at the end of may 2017 granted the petition of Ukraine to suspend the implementation of the decision of 29 March 2017 concerning Eurobonds for $3 billion owned by Russia.

In addition, in late July the court confirmed the granting Ukraine the unconditional permission to appeal against the decision of March 29, the court of Appeal, despite attempts by Russia to set burdensome conditions for the exercise of the rights of Ukraine to appeal.

The court also denied the petition of the Trustee of the Russian Federation on security for costs, and agreed with the position of Ukraine that the question of reimbursement of the Trustee of the Russian Federation to trial should be studied in detail by the court, which will take place before the conclusion of the consideration of the appeal of Ukraine.

According to the Ministry of Finance of the Russian Federation the decision from March 29, the court obliges Ukraine to pay Russia the nominal value of bonds in the amount of $3 billion, unpaid coupon on the $75 million and penalty interest on these amounts. Interest on the principal amount of the bonds shall be payable at the rate of 8% per annum interest on the amount outstanding coupon rate of three-month LIBOR in us dollars plus 2% per annum. Penalty interest is calculated from 21 December 2015 and made on the date of full execution of obligations by calculating the cost for each day of delay at more than $673 thousand

At the same time, Russia cannot proceed with the foreclosure of the specified debt until the date of the judgment on appeal.

Approval of the Ministry of Finance of the Russian Federation, the High court in London also ordered Ukraine to compensate for Russian part of the costs of judicial proceedings, in the amount of 2.8 million pounds. Half of the amount the debtor must pay no later than September 20, 2017.

The court ruled that Russia’s demand for compensation the rest of the costs, incurred due to nonfulfillment of obligations on the bonds, will be considered after the decision was filed by the Ukraine in June of appeal from the verdict of the High court of London.

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