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Dnipropetrovsk Oblast Court Opens Proceedings in Lawsuit Filed by NBU to Collect Funds from Ihor Kolomoiskyi

Dnipropetrovsk Oblast Court Opens Proceedings in Lawsuit Filed by NBU to Collect Funds from Ihor Kolomoiskyi

The Economic Court of Dnipropetrovsk Oblast scheduled preliminary hearings for 11 July 2019 in the NBU’s lawsuit against Ihor Kolomoiskyi, PrivatBank’s former shareholder.

In June 2018, the NBU filed four lawsuits with the Economic Court of Dnipropetrovsk Oblast against Ihor Kolomoiskyi, the financial guarantor of PrivatBank, to make him repay UAH 1.8 billion, UAH 1.27 billion, UAH 1.29 billion, and UAH 0.5 billion in overdue refinancing loans. These are the amounts Kolomoiskyi owed as at the end of December 2015 under the surety agreements he had previously signed. The loans became overdue in early 2016. To collect them from Kolomoiskyi, the NBU filed a lawsuit with the Geneva Court of First Instance on 18 December 2018.

However, the Commercial Court of Dnipropetrovsk Oblast refused to open proceedings in the lawsuit on grounds that the defendant's place of residence was Geneva, Switzerland, not the city of Dnipro, Ukraine.  In July–August 2018, the Dnipropetrovsk Economic Court of Appeal upheld all rulings of the court of first instance.

The NBU disagreed with the courts’ rulings and filed appeals in cassation, citing a wrongful application of procedural law. The NBU’s arguments:

  • The surety agreements signed by Ihor Kolomoiskyi and the NBU stipulate that if at the moment the creditor demands that the guarantor fulfill his obligations the guarantor is outside of Ukraine, the matter of collecting the guarantor’s debt will be taken to a Ukrainian court.
  • Under territorial jurisdiction rules, this lawsuit must be heard in the Economic Court of Dnipropetrovsk Oblast, which is where Kolomoiskyi’s latest registered place of residence is located.

In March 2019, the Grand Chamber of the Supreme Court granted the NBU’s appeal in cassation and overturned the rulings of the courts of previous instances, sending the cases back to the Economic Court of Dnipropetrovsk Oblast, which must now open proceedings in these cases. After the Supreme Court returned the cases, the Economic Court of Dnipropetrovsk Oblast opened proceeding in all lawsuits filed by the NBU.

“It took the Ukrainian judiciary longer than a year to arrive at obvious conclusions and to eventually open proceedings in lawsuit to recover the public funds. The NBU expects that following the preliminary hearings, the court will schedule the actual trial for August this year. The NBU is determined to continue to take legal action necessary to collect the debt on the refinancing loans,” says Viktor Hryhorchuk, Head of the Litigation Office at the NBU’s Legal Department.

For reference:

In 2015, Kolomoiskyi, one of the then owners of PrivatBank, signed personal surety agreements with the NBU under which he guaranteed the repayment of five refinancing loans PrivatBank took out in 2008–2014. In effect, he took personal responsibility to repay PrivatBank’s debts to the NBU, which now stand at UAH 9.2 billion. Kolomoiskyi has not fulfilled any of these obligations to the NBU.

To collect PrivatBank's debts on the refinancing loans, the NBU filed four lawsuits with Ukrainian courts and one lawsuit with the Geneva Court of First Instance against Kolomoiskyi in 2018. On 19 March 2019, the Supreme Court granted the NBU’s appeals in cassation and canceled the rulings of the Commercial Court in Dnipropetrovsk Oblast and the Dnipropetrovsk Economic Court of Appeal that had dismissed the NBU’s lawsuits.

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