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In December, Russian President Vladimir Putin ordered the Finance Ministry to file a lawsuit against Kiev, if it failed to repay the $3 billion within a 10-day grace period following the December 20 deadline. The lawsuit will be heard by the High Court in London.
Russia is demanding more than the 7.75 percent interest Ukraine offered in its debt restructuring, which also included a 20 percent debt haircut. According to the court documents, quoted by Bloomberg, Russia's lawyers suggest returning to the original five percent rate, equivalent to $427,083 a day, if the court in London decides eight percent interest is too high. Moscow is also asking Kiev to repay an additional $75 million in skipped interest payments before the debt deadline.
"Ukraine has already indicated and re-affirms its intention vigorously to defend the entirety of the claim relating to the Russian Eurobonds. It will be filing its defense in due course," Kiev's lawyer told the media.
Legal battles between Russia and Ukraine are valued at $100 billion, which includes cross-lawsuits between the two countries' gas monopolies, Gazprom and Naftogaz. Kiev is demanding $37 billion from Moscow for what it calls the annexation of Crimea. Naftogaz is seeking $26 billion in damages from Gazprom, which, in its turn, demands $32 billion from Naftogaz.
Comment: There is a question if Putin has actually called on the Eurobond debt. He had not done so at the request of Kiev, even though the Russian banks have the right to request early repayment under certain circumstances. To further confuse things, on May 19, 2015, the Ukrainian government adopted a law, valid until July 1, 2016, which gives it the power to declare a moratorium on some loan repayments. Yatsenyuk considered the Eurobond loan as "private," hence suspension of payments. Russia did not. Neither did the IMF.
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