Ukraine can defend a $3-billion Eurobond lawsuit brought by Russia on the basis it was forced to assume the debt in 2013 because of threats of force by Moscow, the United Kingdom’s top court ruled on Wednesday.
The long-awaited ruling on the lawsuit, which was brought in 2016 and long predates Russia’s 2022 invasion of Ukraine, paves the way for a full trial of Ukraine’s case that it had to accept the money in the face of Russian aggression.
Ukrainian President Volodymyr Zelensky described the ruling as a “decisive victory against the aggressor”, writing on Twitter: “Justice will be ours.”
The case centres on billions of dollars borrowed from Moscow by pro-Russian Ukrainian President Viktor Yanukovich, months before he was toppled in a popular uprising in February 2014 and shortly before Russia’s annexation of Crimea from Ukraine.
Ukraine says the debt was procured by duress, including unlawful trade measures to deter the country from signing an association agreement with the European Union and threats to its territory.
The UK Supreme Court ruled on Wednesday that Ukraine can defend the lawsuit at trial on the basis that Russia’s threats of military force amounted to illegitimate pressure on Ukraine to assume the $3-billion debt.
Lawyers representing Russia had told the court in 2019 that the “geopolitical dispute” between Ukraine and Russia at the time of the contract had nothing to do with whether the debt was enforceable.
“The success of Ukraine’s defence turns on whether it can establish that Russia threatened the use of force and that those threats were a reason for Ukraine’s decision to enter into the agreement,” Judge Robert Reed, the court’s president, said when announcing its decision.
“That question can only be determined after trial.”
Reed also said the appeal “was heard before Russia’s invasion of Ukraine last year and neither party has argued that the invasion is of any relevance to our decision”.