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Ukraine Files Defense In $3 Billion Russia Eurobond Case

Ukraine has filed its defense with a British court over a $3 billion debt to Russia, arguing that the original loan agreement with its neighbor was invalid.

The Ukrainian Foreign Ministry and Finance Ministry said in a statement on May 27 that "Ukraine's defense explains that the loan agreement is invalid and unenforceable for multiple reasons."

"As a matter of Ukrainian law, Ukraine lacked the capacity to enter an agreement that violated the borrowing limits then in place and...the agreement was procured through duress exerted by Russia on Ukraine throughout 2013 in order to prevent Ukraine from signing an Association Agreement with the EU," it said.

The Eurobond in question was issued by the government of former President Viktor Yanukovych just two months before he fled to Russia in February 2014 amid bloody street protests. The protests were sparked by Yanukovych's decision not to sign the Association Agreement with the EU.

Russia filed a lawsuit against Ukraine in February at London's High Court demanding repayment of the $3 billion Eurobond, which matured on December 20.

Russian Finance Minister Anton Siluanov said on February 17 that the case will seek to recover the principal in full, $75 million of unpaid interest, and legal fees.

Moscow declined to take part in a $15 billion restructuring that Ukraine negotiated with its other Eurobond holders last year.

Based on reporting by Reuters

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