Russian Defense Ministry suit vs. Ukraine energy firm partially satisfied

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Sept. 19, 2012, 5:56 p.m. | Ukraine — by Interfax-Ukraine

The Russian ministry claims that, in the 90s, UESU, which was then headed by Yulia Tymoshenko, failed to meet its commitments on supplies for the Russian military under a 1997 agreement.
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The Kyiv Economic Court has partially satisfied a suit from the Russian Defense Ministry concerning a debt accumulated by Unified Energy Systems of Ukraine (UESU), ordering Ukraine to pay 3.11 billion hryvnias ($400 million) to Russia's defense agency.

The court ruling, issued on Wednesday and read out by judge Anatoliy Ivchenko, also ordered Ukraine's government to pay 61,860 hryvnias in court fees.

The ruling would take effect if a possible appeal against it is thrown out, Ivchenko said.

There was  Hr 7.99 to the dollar on Wednesday.

Russia's Defense Ministry, which laid claim to Hr 3.24 billion , was not satisfied with Ukraine's Cabinet being the sole defendant and demanded that the State Treasury Service be a co-defendant. UESU was a third party in the litigation.

The Russian ministry claims that, in the 90s, UESU, which was then headed by Yulia Tymoshenko, failed to meet its commitments on supplies for the Russian military under a 1997 agreement. The then Ukrainian government of Prime Minister Pavlo Lazarenko allegedly provided state guarantees that the commitments would be fulfilled.

Tymoshenko later became prime minister.

UESU representative Oleksandr Kovalchuk said in court that Lazarenko had made his promises that 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 UESU from fulfilling the 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.

A court in Kharkiv, Ukraine, is meanwhile holding a second trial of Tymoshenko, accusing her of fraud during her tenure as UESU chief executive. The prosecution demands that Tymoshenko pay the state Hr 19.5 million as supposed damage compensation.

Prosecutor General Viktor Pshonka alleges that proceedings against Tymoshenko were quashed illegally in 2005, and that this happened under alleged pressure from then President Viktor Yuschenko immediately after Tymoshenko was appointed prime minister.

The Batkivschyna party, whose leader is Tymoshenko, claims that government reports about UESU's Russian debt are an attempt to blacken the company's name as an election campaign stunt. Ukraine is due to hold parliamentary elections next month.

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