Court refuses govt to open appeal against decision to terminate NFP's loan obligations to PrivatBank

KYIV. Oct 13 (Interfax-Ukraine) – The Supreme Court refused the Cabinet of Ministers to open a cassation appeal against the decisions of the courts of lower instances on recognizing as terminated the obligations of JSC Nikopol Ferroalloy Plant (NFP, Dnipropetrovsk region) to PrivatBank (Kyiv) under one of the loan agreements signed with the bank in the amount of $30 million.

According to the register of court decisions, the Supreme Court refused to open the cassation appeal due to the fact that the Cabinet of Ministers is not a party to the case and, accordingly, did not take part in the consideration of the case, therefore, it can file the cassation appeal only after the review of the case on its appeal.

In addition, the court said that there are significant shortcomings in the materials of the cassation appeal of the Cabinet of Ministers, in particular, there is no evidence in confirmation of the payment of the court fee for filing the cassation appeal and proof of sending the cassation appeal to other participants in the case.

As reported, on January 22, 2021, the Economic Court of Kyiv recognized all obligations of the NFP as terminated.

On October 5, 2021, the Supreme Court postponed the consideration of the PrivatBank’s cassation appeal to decisions to terminate NFP’s loan obligations for $30 million in order to review the cassation appeal of the Cabinet of Ministers.

PrivatBank filed a lawsuit with the Delaware Court of Chancery, in which it points to the violation of the NFP of its contractual obligations under the loan agreement, including the use of credit funds for purposes that contradict the conditions of issuance, that is, not to finance the current activities of the enterprise.

In addition, in the claim in the United States, according to the text of the court ruling, it is argued that NFP was involved in money laundering and illegal redirection of loans, which, in particular, provided for the repayment of debt under the loan agreement at the expense of funds under other loan agreements.

NFP, in turn, said that since any obligations between it and PrivatBank, stipulated by the loan agreement, were terminated by execution, the bank has no grounds for not recognizing the plaintiff’s right to terminate the obligation.

PrivatBank said that its appeal with the U.S. court did not lead to non-recognition, violation or challenge of the rights of NFP and, accordingly, the latter had no prerequisites and grounds for filing a statement of claim for recognizing obligations under the loan agreement terminated. However, the Economic Court of Kyiv took the side the plaintiff.