In quiet and measured life of Russian banks in Ukraine, which has long been not concerned about any protests of the nationalists, nor the attacks of vandals, due to an unexpected shock. The Kyiv court of appeals September 5, seized the shares of VTB Bank, Prominvestbank and Sberbank. This Ukrainian “daughter” of Russian state banks VTB, VEB and Sberbank.
The court also banned the Ukrainian banks with Russian state capital to self-destruct or to reorganize, sell, give away or change his movable and immovable property. These interim measures, the Kyiv court approved on the claim of the former Chairman of the Board of PrivatBank Alexander Dubilet and 18 companies related to the former co-owner of the Bank Igor Kolomoisky, which was filed in the court of summer. Thus the former related parties PrivatBanka decided to force Russia to pay for lost case in the Hague.
After the annexation of Crimea by Russia in September 2014 the self-proclaimed authorities of the Peninsula have selected the property and assets of the Ukrainian oligarch. Among them are the famous sanatorium “foros” in Yalta, 39 offices of PrivatBank, 43 apartments in Yalta, sanatorium “Geologist” in Gurzuf, more than 30 real estate listings in Kerch, a children’s institution of improvement in Alushta, nonresidential building in Simferopol, 32 gas stations, the airport “Belbek” and the tank farm. In June 2015 the company Kolomoisky has initiated in the Hague arbitration proceedings, demanding from Russia a compensation for the lost property.
The international court of justice, they referred to the violation by the Russian authorities in the Crimea to the intergovernmental agreement of 1998 on the protection of investments between Russia and Ukraine, which States that the parties undertake not to expropriate and not to nationalize investments of nationals of each other without “fast, adequate and effective compensation”.
Hearings on the case ended on 2 may 2018 unanimous arbitration decision on liability of the Russian Federation to “Everest estate” and group plaintiffs, as well as compensation for damages for lack of access to their property in the Crimea. Deputy foreign Minister of Ukraine Lana zerkal reported that the court decided to collect from Russia, $159 million Edition iareporter.com he added that Russia should pay as compensation $130 million, and another $29 million is interest 2014.
Although the decision of the Hague arbitration is final and binding on the parties, in the Kremlin it was not going to perform, how to participate in the trial. “Russia was not represented and did not sent its representative in this lawsuit, so we do not consider ourselves a party to this case”, – said the press Secretary of the President Dmitry Peskov.
15 September 2015, the court received a letter, in which Russia stated that it “does not recognize the jurisdiction of the international Tribunal at the Permanent court of arbitration (PCA) in settlement of the above requirements.” Therefore, Russia has not delegated to the court with his lawyers and tried to prevent the first in the history of Russia a loss in compensation as a result of annexation.
A suitcase without a handle
In July of 2018 Alexander Dubilet, the company and Igor Kolomoisky appealed to the Ukrainian court to enforce in Ukraine the decision of the Dutch court for compulsory collection of money from Russia. The court noted that we are talking about $130,486 million and the interest on that amount for 4 years.
That the Russians are unable to evade debt payment, the ex-privatovtsy in August initiated the arrest of shares of Ukrainian “daughters” Russian banks and other measures.
The plaintiffs claimed that because Russia refused to participate in the trial, is “a real risk that the non-application of interim measures may complicate or make impossible execution of the decision of the international commercial arbitration in case of granting the permission to execute it”. Based on media reports, the court found that the defendant in the face of Russia intends to sell or terminate the activities of the “daughters” of Russian banks, therefore, approved the petition.
Now ICU is forbidden to carry out operations on the securities account of the Bank VTB and the company “Inventum” – on account of Vnesheconombank, Raiffeisen Bank Aval – on account of the savings Bank.
Russian state-owned banks for a long time and not once trying to sell its Ukrainian “daughters”. After the imposition of sanctions in March 2017 only Sberbank managed to sell Lviv PJSC “Vs Bank” (VS Bank) businessman Sergei Tigipko. Its main “a daughter” the Russian state Bank was unable to sell. First it was claimed by Russian businessmen Grigory Guselnikov and said Gutseriev, then Belarusian Victor Prokopenya, and then the Belarusian Paritet Bank. According to the publication, none of these buyers was not considered seriously by the National Bank for the direct or indirect connection with the Russian state Bank. None of them are “good” from the NBU did not hear. The applicant for the savings Bank was also made by Valery Khoroshkovsky, but because of the presence of Russian Bank under sanctions, he did not want to make a deal.
The situation was similar with Prominvestbank, which the Russians wanted to sell the developer Pavel Fuchs and MP Maxim Mikitas. But this pair didn’t get approval from the NBU. Another contender is Alexander Yaroslavsky – have filed papers with the NBU for the purchase of Prominvestbank, even … not make a deal with the Russians.
The situation with VTB group looks more prosaic. BM Bank sent to self-destruct and from day to day waiting for the revocation of the license by the national Bank. VTB Bank reduces presence in Ukraine and is also considering the possibility of renting licenses and reorganization in a financial company.
According to the publication, the Russian state-owned banks is dissatisfied with the decision of the Ukrainian court, because it interferes with the plans of VTB Bank, which considered the option of putting the license in NBU before the end of 2018. According to Russian media, Prominvestbank in November, also plans to consider possibility of refusal of the license.
Now they all have to revise their plans. “It seems that a buyer for these assets is still there. But with the reduction of the presence can be a problem after the court decision,” – said the head of the analytical Department of the IR Concorde Capital Oleksandr Parashchiy. In his opinion, it is very likely that this judicial decision will be successfully appealed.
On the appeal of arrest in the Supreme Court the Russians have 30 days. In a press-service of the savings Bank have confirmed that they plan to sue. At the same time stressed that the arrest will not affect the operating activities of the institution. “The Bank operates on the territory of Ukraine in full compliance with applicable legislation and regulatory standards. The seizure of shares does not affect the Bank’s work on customer service,” said the Bank.
To avoid expropriation
Partner of law firm EVERLEGAL Alexander ruzhitsky emphasizes that the arrest of the shares is a temporary measure. “If the Ukrainian court will deny plaintiffs permission for the execution of the decision, the arrest will be cancelled. Plaintiffs may recover the property of the Russian Federation located on the territory of Ukraine. This rule applies to shares of banks, if it is determined that they belong to the Russian Federation. Russia may voluntarily execute the decision just to transfer money to the account of the plaintiffs, in this case, no penalty shares will not be”, – explains the lawyer.
This leaves open the question of whether Kolomoisky if they wish to recover these shares and become the owner of Russian banks. As Ario says lawyer Law Firm Cyril Yukhno, according to international practice, banks can be liable for the obligations of the state. But on the other hand, Russian law stipulates differently.
“The decision the judge refers to the Federal law “About development Bank” (Vnesheconombank), which also has a requirement that the Bank is not liable for obligations of the Russian Federation and Vice versa. A similar provision is contained in the Federal law “On banks and banking activities”. The main shareholder of Sberbank is the Central Bank of the Russian Federation, the others – private persons. I admit that this arrest will be appealed, and the story will have continuation”, – believes Alexander ruzhitsky.
About 40% of the shares of the Russian Sberbank and 30% of VTB Bank shares are in free exchange treatment (both state Bank carried out IPO), making them less susceptible to judicial risks in this situation. According to lawyers, in such a situation it is impossible to recover 100% of the shares of any of the subsidiaries on the debt of the Russian state. “In our view, such a question would hurt the shareholders of Sberbank of Russia, is not related to the government of the Russian Federation. Therefore, 100% of shares of JSC “Sberbank” (Ukrainian. – Ed.) can not be charged,” said Cyril Yukhno.