UK Supreme Court Moves Case to Trial Over Whether Ukraine Owes $3 Billion Loan to Russia
The U.K. Supreme Court ruled Ukraine can defend a $3 billion Eurobond lawsuit on the grounds it was forced to take on the debt in 2013 due to threats from Russia. The Law Debenture Trust Corp., which is incorporated in England and Wales, sued on Russia's behalf. Ukraine said it need not pay the loan because it was procured by duress stemming from illegal pressure and threats, including sanctions.
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The U.K. court ruled that while a contract can be voided if it was induced by "illegitimate pressure," sanctions are key aspects of statecraft and not illegitimate under English law. The court said the U.K. uses sanctions for a variety of reasons, including supporting foreign policy objectives. "Other countries do likewise," the opinion said. "[T]he trade restrictions alleged to have been adopted or threatened by the Russian Federation are another example of the use of such measures by a sovereign state in the pursuit of its interests."
The Supreme Court moved the case, which was first brought in 2016, to trial. While announcing the decision, Judge Robert Reed said that the "success of Ukraine’s defence turns on whether it can establish that Russia threatened the use of force and that those threats were a reason for Ukraine’s decision to enter into the agreement," Reuters reported.