A dispute between Ukraine and Russia over $3 billion in unpaid Ukrainian bonds is set to go to a full trial, a London appeals court ruled Friday, finding allegations that Russian aggression against its neighbor voided the loan must be tested in court, TASS news agency reports.
The decision in effect over the dispute sets aside a lower court judgment that went in favor of Russia in March 2017, when a judge ruled the case, centered around money Moscow lent to Kiev in 2013, should not proceed to trial because Ukraine had not offered a defense that was justiciable or capable of being settled in court.
The latest ruling found that one of the four arguments presented by Ukraine met this test. It gives both sides the right to turn to the UK Supreme Court, and Ukrainian Finance Minister Oksana Markarova said her country would take that step.
If the Supreme Court, which is likely to hold a hearing in the first half of 2019, also agrees that the case should go to full trial, it will be heard at the UK’s High Court.
The debt is structured as a Eurobond governed by English law. Moscow wants the bond to be repaid in full but Kiev argues that Russia should have participated in a 2015 restructuring of other Ukrainian Eurobonds.
Ukraine disputed the validity of the loan on various grounds but the appeal court ruled that one of its arguments, related to duress arising from Russian aggression, particularly with regard to Crimea, was justiciable.