The Court Confirms the Legitimacy of the Decision by the National Bank of Ukraine in Respect of BANK SOFIISKYI PJSC

The Donetsk Administrative Court of Appeal upheld the decision by the National Bank of Ukraine to classify as insolvent BANK SOFIISKYI PJSC and revoke its banking license.

According to the case materials, on 8 December 2016, the Donetsk Circuit Administrative Court sustained in part a claim filed by Boyarbudvest LLC requesting the court to recognize as legally invalid and overrule the decisions by the NBU and the deposit Guarantee Fund ordering the withdrawal of BANK SOFIISKYI PJSC from the market .

The NBU and DGF lodged appeals with the Court of Appeal, seeking to challenge the court’s ruling. On 23 February 2017,  a hearing was held at the Donetsk Administrative Court of Appeal where the NBU representatives provided compelling evidence in support of their legal position. Having examined the merits of the case, the Court of Appeal overruled the decision of the court of the first instance and dismissed a claim filed by Boyarbudvest LLC without prejudice.

As a side note, BANK SOFIISKYI PJSC is one of the banks in respect of which the courts of different instances have issued rulings cancelling the NBU resolutions on declaring these banks insolvent and/or ordering the revocation of banking licenses and liquidation. These banks included the following banks:  Union, Premium, Capital, Ukrinbank, KYIVSKA RUS, EAST-INDUSTRIAL BANK, Green Bank, Bank Veles, and Radical Bank. Al these banks have been withdrawn from the market.

The NBU believes that the courts’ rulings  ordering to reinstate these banks  pose a systemic risk for the financial stability.

NBU also stresses the importance of implementing judicial reform as soon as possible that would eradicate corruption  and enhance the efficiency of the judicial reform and restore confidence in judicial decisions, business and society.