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28.01.2014

Contributors to the island

Customers Cypriot banks could not collect money in Ukraine.

Marfin Bank and Bank of Cyprus managed to unlock their assets and shares in the course of litigation with the companies who have had a claim to their parent structures. The Supreme Economic Court of Ukraine ruled that these conflicts should be resolved exclusively in the courts of Cyprus. And there are minimal chances to return the money - the Cypriot authorities last year conducted a forced restructuring and write-offs of clients' money.

Judicial conflict between the Ukrainian banks with Cypriot capital and customers for their parent companies, which tried to bring the hosted in Cyprus means over. Back in May 2013, the Economic Court of Kiev froze shares, movable and immovable property Marfin Bank (owned by the Cyprus Popular Bank) and the Bank of Cyprus (Bank of Cyprus) for claims companies "RVTrans" and "Premium Smart", respectively, to seek a total of $ 40 million from their parent institutions.

Yesterday at Marfin Bank reported that in January 15 Supreme Economic Court (SEC) took the side of the bank and canceled the decision of the first instance and appeal. The court decided that since the dispute arose around the agreements concluded in the Republic of Cyprus, it is not subject to the jurisdiction of courts of Ukraine. "The conflict is uniquely permanently closed against Marfin Bank. We see no additional risk with respect to the bank", - said the press service of the Marfin Bank. General Director of "RVTrans" Roman Lyaschenko yesterday commented on the decision of the court.

A similar conclusion SEC 9 December came in the study of the case of the Bank of Cyprus. Court overturned the decisions of the previous courts, recognizing their findings as inaccurate and because the dispute arose between the parties in Cyprus, he dismissed the case. "This judgment removes the risks associated with the case, in particular the arrest of shares of the Bank of Cyprus. Assume that the company may bring an action before the court in Cyprus", - said the head of the Legal Department of the Bank of Cyprus Nicholas Shiyanyuk.

If the parties have not agreed on another jurisdiction, the court must consider the dispute at the location of the defendant, the lawyers explain. "The attempt of RVTrans to obtain a decision on such a dispute in Ukrainian courts is procedural speculation and it contradicts both the laws of Ukraine and its international obligations, similar attempts were made by the owners of frozen funds in other countries, particularly in Russia, but also failed" , - says the international adviser of the law firm Chadbourne & Parke LLP Olga Vorozhbit. - The plaintiff has the right to apply with a similar request to the competent court of the Republic of Cyprus, but the chances of winning such a dispute in this jurisdiction are negligible l. This is due both to the absolute unreasonableness of the claims of the plaintiff and to the existing jurisprudence of Cyprus. "In the spring of last year, the Cyprus authorities carried out an involuntary restructuring, within which Xnumx% of the Bank of Cyprus was written off and converted into shares, to which it was decided to add Syprus Popular Bank.

Decision VHS, however, does not mean that depositors of Cypriot banks have lost the right to judicial protection and the exercise of their creditor rights. "Conflicting norms of private international law say that potentially on the territory of Ukraine there may be a dispute about the collection of debts of Cypriot companies, provided that the property of a foreign legal entity on the territory of Ukraine is recoverable, and in the presence of a procedure for bankruptcy of a foreign parent company, disputes , associated with the satisfaction of the claims of creditors at the expense of property located in Ukraine, can not be unequivocally considered in Ukraine, since the procedures for the liquidation dations of the insolvent legal entity according to the rules of conflict rules are the exclusive jurisdiction of the courts at the location of the parent company "- explains partner of the law firm" SK GROUP "Yuliya Kurilo.

Withdrawal from the assets and shares of Marfin Bank and the Bank of Cyprus reduces risks for potential investors who have been negotiating with Cypriots over their purchase since last year. According to the government strategy of Cyprus, the Bank of Cyprus and Cyprus Popular Bank should sell their "daughters" to Russia, Ukraine, Romania, Britain and other countries (see "Kommersant" from 1 April 2013). "The disposal of shares in the absence of arrests is the right of the owner of such securities.The possible sale of bank shares after the lifting of arrest should not create problems for their potential buyer," said Mrs. Kurilo. According to Kommersant's information, the Cypriots have already reached an agreement on the sale of the Bank of Cyprus to Alfa Bank (for details, see page 1). The main contender for Marfin Bank remains the banker Nikolai Lagun, who by means of M & A transactions is building up the position of Delta Bank. In Marfin Bank, told Kommersant that the issue of negotiating the sale of their shares is within the competence of Cyprus Popular Bank.

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Tags: Economy, Banking, Ukraine

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