You're reading: Court of appeal to hear Ukrainian government’s appeal in UESU debt case on Oct. 4

Kyiv Economic Court of Appeals will consider on October 4 an appeal against a ruling of the Economic Court of Kyiv obliging the Ukrainian government to pay the Russian Defense Ministry over Hr 3.1 billion (some $390 million) in debts of the corporation United Energy Systems of Ukraine (UESU).

The hearing of the appeal was scheduled for 0915 on October 4. The court is likely to announce its ruling on the same day.

As reported, the Russian Defense Ministry filed at Kyiv Economic
Court a lawsuit against the Ukrainian government for the non-payment of Hr 3.239 billion under a criminal case on the activities of the UESU
Corporation. The plaintiff also asked the court to summon the State
Treasury Service of Ukraine as a third party on the side of the
defendant in the case. The UESU is the third party on the side of the
defendant in the case.

The Russian ministry claims that, in the 1990s, the UESU, which was
then headed by former Ukrainian Premier Yulia Tymoshenko, failed to meet
its commitments in supplies for the Russian military under a 1997
agreement. The then Ukrainian Prime Minister Pavlo Lazarenko allegedly
provided state guarantees that the commitments would be fulfilled.

UESU representative Oleksandr Kovalchuk said in court that Lazarenko
had made promises that the UESU would meet its commitments in letters,
and that they could not be legally qualified as state guarantees.
Kovalchuk also said that alleged pressure from the Ukrainian government
had prevented the UESU from fulfilling its commitments.

Ukrainian government representatives also told the court there had
been no state guarantees and argued that the statute of limitations made
the suit invalid.

On September 19, 2012 Kyiv Economic Court partially satisfied a suit
from the Russian Defense Ministry concerning a debt accumulated by
Unified Energy Systems of Ukraine (UESU), ordering Ukraine to pay Hr
3.11 billion ($400 million) to Russia’s defense agency.

On September 25, 2012 the Cabinet of Ministers of Ukraine filed an appeal against the ruling of the Economic Court.