After its former-President, Viktor Yanukovych, recently fled to Russia due to a popular uprising, Ukraine will be sued as Russian Prime Minister Dmitry Medvedev ordered the Cabinet to prepare a lawsuit against the country in an English court after the government in Kiev failed to pay its $3 billion debt.
The Voice of America reported that Ukrainian Prime Minister Arseniy Yatsenyuk earlier this month announced that they would discontinue payments on the country's debt because Russia will not restructure it. He also cancelled $507 million worth of debt owed by Ukrainian business to Russian banks.
Stopping payments means failure to pay, but the country will be given a 10-day grace period before the country is in default. According to Russian officials, they will give Ukraine until the New Year to begin the lawsuit.
Meanwhile, according to the RT Network, Medvedev on Monday said, "There's no doubt that Kiev won't pay." He even added that there should be added penalties along with the payment, saying that the deadline was on December 20.
The Prime Minister signed a decree for an economic measure on January 1 as the economic aspect of the Association Agreement with the two nations will start. He said, "We need to protect the Russian market, out producers and prevent the import of goods from sanctioned EU countries - Ed.] marked as Ukrainian products."
Bloomberg wrote that Ukrainian President Petro Poroshenko defaulted on the debt made in December 2013, just two months before Yanukovych stepped down and Soviet republics turned to adversaries and allies. The debt has become key to deteriorating relations.
Since the Eurobonds were made under English Law, any claims must be given to a London court. This lets parties have the lawsuit in the London Court of International Arbitration, which is favored by ex-Soviet countries. University of Cambridge professor of international law, Michael Waibel, Russia has a strong case to win the case.
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