Court to continue hearing government's appeal in UESU case on October 11

Kyiv Economic Court of Appeals will continue hearing 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) on October 11, at 0915.

According to an Interfax-Ukraine reporter, the court announced a break in the hearing to give the participants of the process time to read new materials of the case that were submitted during the hearing today.

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 also a 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.

The 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 UAH 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.