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Supreme Court Confirms Lawfulness of NBU Decision to Remove TK Credit Bank from Market

23 November 2018

Press Release

 

On 20 November 2018, the Supreme Court ruled to satisfy the suit by the National Bank of Ukraine (NBU) against the Order of the High Administrative Court of Ukraine dated 20 April 2017 on the claim brought by a shareholder of CB TK CREDIT JSC – Eco Coal Trade House LLC.

 

The Supreme Court overturned the Order and upheld the decisions of the lower courts that fully refused to satisfy the suit by Eco Coal Trade House LLC.

 

Thus, the court of the highest authority finalized the lengthy legal proceedings, which started in the District Administrative Court of Donetsk in 2016. Back then, the shareholder of CB TK Credit filed a suit against the NBU and the DGF requesting the court to force the NBU to resume the bank’s operation and deem illegal the decision to remove the bank from the market.

 

The Order of the District Administrative Court of Donetsk as of 5 September 2016 fully dismissed the suit by Eco Coal Trading House LLC.

 

Refusing to accept the decision of the first instance court, the plaintiff appealed against it. The ruling of the Donetsk Administrative Court of Appeal as of 24 October 2016 dismissed the appeal by the shareholder of TK Credit bank and upheld the Order of the District Administrative Court of Donetsk.

 

Thereafter, the plaintiff filed a cassation claim against the decisions of the first instance court and the court of appeal. The Order of the High Administrative Court of Ukraine as of 20 April 2017 fully satisfied the cassation claim by the shareholder of TK Credit bank, in particular, it cancelled the decisions of the first instance court and the court of appeal and satisfied the initial suit in full.

 

Refusing to accept the Order of the High Administrative Court of Ukraine, the NBU filed a claim to the Supreme Court of Ukraine in July 2017 requesting to review the Order, as the cassation courts applied the same rules of substantive law in different ways, which caused different court rulings under similar legal relationships (in the previous wording of the Code of Administrative Court Procedure of Ukraine).

 

Please be reminded that TK Credit was the first bank removed from the market due to its opaque ownership structure. The NBU took the decision to declare the bank insolvent on 9 February 2016. Since mid-August 2014, the NBU more than once drew bank’s attention to the fact that its ownership structure does not meet the transparency requirements. However, the bank ignored the NBU’s demands and did not submit the requested documents. The bank’s owners did not take the required actions to bring their ownership structure in line with the legislative requirements.

 

All NBU decisions on removal of banks from the market due to the opaque ownership structure remain effective, and the decisions that were under judicial control were confirmed by the Supreme Court.

 

 


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Last modification   23.11.2018