On June 26, the Supreme Court partially satisfied the cassation appeal of ESU LLC, overturned the decisions of the lower courts (in the case No. 910/7149/17) on the recovery of UAH 2.83 billion in debt from the company in favor of Ukreximbank and sent the case for reconsideration to the Commercial Court of Kyiv City.
ESU LLC (the owner of 92.79% of Ukrtelecom shares; the ultimate beneficiary is Rinat Akhmetov) claimed that the amounts of penalties, 3% of annual and inflationary losses for 9-13 percent periods were the subject of consideration by the court in Case No. 910/31771/15 and the same amounts were claimed to be recovered in Case No. 910/7149/17, which has resulted in "excessive recovery of funds from the defendant" (quote). In addition, the defendant believes that the plaintiff`s calculation of the amounts claimed for recovery is incorrect.
The Court of Cassation noted that the courts of first and appellate instances failed to properly examine "the reasonableness and correctness of the calculation of the amount of penalties arrears, inflationary losses and 3% per annum", as well as to provide "an appropriate assessment of the defendant`s explanation in this part" (quote).
As Finbalance wrote, on 31.10.2018 the Supreme Court refused to satisfy the cassation appeal of LLC "ESU" and left unchanged the decision of the lower courts in the case № 910/31771/15 obliging the company to repay UAH 810 million of debt (interest income on bonds) to Ukreximbank.
On October 10, 2018, the Supreme Court partially satisfied Ukreximbank`s cassation appeal against the decisions of the lower courts in case No. 910/9938/17, which dismissed the claim against Ukrtelecom for recovery of UAH 1.1 billion under securities purchase and sale agreement No. 266-ГД/2015 dd. 15.09.2015. The Supreme Court determined that only UAH 880 thousand (interest and 3% per annum) should be recovered from Ukrtelecom, while other claims were denied. According to the contract No. 266-ГД/2015, PJSC Ukrtelecom was supposed to buy the bonds of ESU LLC from Ukreximbank, but did not do so.
As a reminder, in March 2017, ESU LLC should have repayed the bonds for UAH 4.6 billion, but did not do so (i.e. allowed a default). The largest holders of these securities are Oschadbank and Ukreximbank (as reported, each of them has a bond portfolio worth about UAH 2 billion). The release of these securities contributed to the privatization process of Ukrtelecom.
In 2015, Ukrtelecom joined the negotiations with Oshchadbank and Ukreximbank on its owner debt on bonds. At that time, Ukrtelecom undertook to repurchase the bonds of ESU LLC for a total of UAH 2 billion (UAH 1 billion from each of the state banks) and pay interest (no later than 15.03.2017). Ukrtelecom shares were pledged to state banks. It was planned that the repayment of the debts would be made at the expense of the funds from the sale of 3G operator TriMob to MTS Ukraine, but this transaction was disrupted (on the background of the lack of consent of the State Property Fund to it).
On March 15, 2018, the Supreme Court partially satisfied Oshchadbank`s cassation appeal and overturned the decisions of the courts of first and appellate instance regarding the granting of an annual deferral of UAH 850.7 million (on bonds) to ESU LLC.
On May 2, 2018, the Supreme Court of Ukraine satisfied Oshchadbank`s cassation appeal in another dispute and cancelled another summer`s delay in the execution of the court decision on the recovery of UAH 960 mln. of debt from ESU LLC in favor of Oshchadbank.
On February 26, 2019, the Commercial Court of Kyiv City refused to satisfy the application of Oshchadbank on the revision of the court decision dated 02.03.2018 due to the newly discovered circumstances (in case No. 910/14130/17), by which the state bank was refused in satisfaction of the claim to ESU LLC on recovery of UAH 1.1 billion of debt by means of foreclosure on 92.79% of shares of Ukrtelecom owned by ESU LLC and pledged to Oschadbank.
On February 18, 2019, the Pivnichnyi Appeal Court refused to satisfy the appeal of Oshchadbank and left unchanged the decision of the Commercial Court of Kyiv City dd. 27.09.2018 (case No. 910/13249/17), which satisfied the claim of Ukrtelecom to Oshchadbank and terminated the abovementioned securities purchase and sale agreement No. 6026-ДД/2015 dd. 15.09.2015, concluded between the plaintiff and the defendant.
On October 23, 2018, the Supreme Court refused Oshchadbank in opening cassation proceedings on the cassation appeal against the decisions of the lower courts (in the case No. 910/8734/17), which refused to satisfy the request of the state bank to secure the claim by arresting Ukrtelecom`s funds in banking institutions and arresting all movable and immovable property of the defendant company within the limits of the claims (UAH 1.1 billion).
It should also be reminded that on 26.02.2019 the Pivnichnyi Appeal Court refused to satisfy the appeal of the State Property Fund and left unchanged the decision of the Commercial Court of Kyiv dd. 07.11.2018 (in case No. 910 / 7708/17), by which the State Property Fund was denied the claim against ESU LLC on termination of the contract of sale of 92.79% of Ukrtelecom shares and the recovery of USD 81.9 million of penalties (for delay in the performance of the investment obligations.)
By the decision of 07.11.2018 the Commercial Court of Kyiv City also refused to satisfy the counterclaim of ESU LLC on recognition of the obligation on gratuitous transfer of the special purpose network as terminated. The Pivnichnyi Commercial Court of Appeal by its ruling dd. 26.02.2019 left the decision of the court of first instance unchanged in this part as well.
As you know, in 2011 the State Property Fund sold 92.79% of Ukrtelecom shares in the amount of UAH 10.6 billion. Financing of the relevant operation was also supported by the issuance of UAH 4.6 bln. bonds of ESU LLC, most of which (UAH 4 bln) were purchased by Oshchadbank and Ukreximbank.
Currently, the final beneficiary of ESU LLC is Rinat Akhmetov. At the same time, Dmytro Firtash`s entourage is trying to recover from Akhmetov in court USD 760 mln, which was underpaid for the purchase of Ukrtelecom in 2013, as well as USD 60 mln.of interest accrued over several years.