While the London Themis was making a decision against the favor of Ukrainian oligarch Ihor Kolomoysky, the building of the Kyiv court, which was supposed to consider Kolomoysky’s Privatbank case, was mined.
“Ihor Kolomoysky is still losing international courts, but he is winning in Ukrainian ones - this is his trend,” Ruslan Bortnyk, director of the Ukrainian Institute for Analysis and Policy Management, comments. However, Ukrainian authorities would be satisfied with the absence of a decision in the Kolomoysky case.
London in questions and answers
How did the case of Kolomoysky and PrivatBank end up in London? On December 18, 2016, the government decided to nationalize the bank due to its insolvency.
The state recapitalized the financial institution in the amount of 4,3 billion USD, and in June 2017 added another 1,4 billion USD. A year later, in December 2017, PrivatBank (which has become the state bank already) filed a lawsuit in the High Court of London against its former shareholders Ihor Kolomoysky and Hennadiy Bogolyubov, as well as a number of companies associated with them. The purpose of the claim is to return the money withdrawn from the bank.
But why exactly London? Because British justice can be considered the standard of honesty and integrity. And also because the High Court decided on the worldwide seizure of the assets of Kolomoysky and Bogolyubov.
PrivatBank provided evidence of a 2 billion USD withdrawal, and London Justice accepted the evidence.
What does this mean for Kolomoysky? Only one thing: while the seizure of assets is in effect, their owner cannot manage their money.
One of the most famous Ukrainian oligarchs had his hands tied. And obviously, he does not like it.
And what did Kolomoysky do? In March 2018, he and Bogolyubov tried to plea the appeal of PrivatBank in a London court. The counterargument of the oligarch was that this issue is not in the jurisdiction of the UK.
The former owners of PrivatBank demanded that the hearings be postponed to Ukraine or Switzerland, that is, either to the country of citizenship of the defendants or to the country of their actual residence. PrivatBank filed an appeal, and the High Court of London satisfied it.
What does this mean in reality? That the London court will now begin consideration of the PrivatBank lawsuit in essence and that the worldwide seizure of Kolomoysky’s assets will continue.
As Inna Muzychuk, the bank’s press secretary, explained, from now on the English court has jurisdiction to consider the PrivatBank lawsuit regarding fraud committed by the former owners of the bank. Plus, to claim compensation for the full amount of losses, which now - including interest - has reached 3 billion USD.
So, is this the reason for the state to celebrate victory? Not really. “We have got a very important decision. It’s not final, but it paves the way for a final decision. The court said that under no circumstances should this process be stopped. Another thing is that the trial in London is not going as fast as in Ukrainian one, but it is going. After some time, we will get the result in favor of Ukraine. This is unequivocal," economist Serhiy Fursa said.
However, he notes that if Kolomosky receives “an additional portion of power” in Ukraine, a court decision might be in his favor, although this is unlikely.
Financial analyst Oleksiy Kushch emphasizes, judges in London cannot replace Ukrainian justice with their decisions - all cases involving the withdrawal of funds from the bank should be investigated with a list of the perpetrators and their degree of responsibility.
"Consideration of a lawsuit in London on the withdrawal of billions of dollars from Privat amid the fact that this fact itself has not received a judicial assessment in Ukraine is legal nonsense," he explains.
But after all, was there a trial of the PrivatBank case in the Ukrainian courts? Yes. Ihor Kolomoysky himself repeatedly filed lawsuits in this regard.
So far, all decisions have been made in his favor. For example, on April 18, 2019, the Kyiv District Administrative Court, on the eve of the victory of Volodymyr Zelensky in the elections, recognized the nationalization of PrivatBank as illegal.
That is, in fact, he spoke out in favor of returning to the previous owners either the financial institution or compensation for it. April 19, the same court quashed the National Bank (NBU) decision of December 13, 2016, which determined the list of individuals and legal entities associated with the bank.
On both of these decisions, the Cabinet of Ministers, NBU and PrivatBank appealed to the Sixth Administrative Court of Appeal in Kyiv.
On April 20, the Pechersk court of Kyiv decided to terminate the personal guarantee agreement of Ihor Kolomoysky on PrivatBank refinancing loans worth 320 million USD, received before its nationalization.
Ukrainian Themis acknowledged that Kolomoysky was not involved in the bankruptcy of PrivatBank. Moreover, he is the injured party in this matter. What happened in the Commercial Court? Consideration of another Kolomoysky’s lawsuit on recognition of the illegal sale of bank shares to the state.
October 17, the trial, in this case, came to the stage of the debate, when each of the parties - the plaintiff and the defendant - had to once again express their arguments. But the debate did not work: in the morning the court was "mined."
The day before, Judge Lyudmyla Shkurdova decided to temporarily suspend the case, while the same issue regarding PrivatBank is being considered by the Sixth Administrative Court of Appeal.
One of the activists who met at the Economic Court on the morning of October 17, Anton Shvets, considers the suspension of the case "a tactical victory for civil society."
“I suppose that the judge was afraid that the case was really public, and therefore took a break. Meanwhile, Kolomoysky will distract us with several other PrivatBank courts,” said Shvets on social networks.
authorities weren’t afraid, but ended up in a zugzwang, when any move only worsens the situation. "Zelensky is in a kind of twine. If he supports Kolomoysky in this matter, this will undermine his relationship with financial donors," political analyst Yevgen Bulavka states.
This situation resembles hot potato for Zelensky; it is impossible to throw it away and is rather difficult to keep it."
“I don’t think that Zelensky had such subordination dependence on Kolomoysky as they try to show it,” Bogdan Petrenko, the deputy director of the Ukrainian Institute for the Study of Extremism, assures. “But in any case, the president’s team understands that he needs to distance himself from Kolomoysky, and as far as possible. Because the negative actions of Kolomoysky will only damage him. The story of PrivatBank can be used just to get away from Kolomoysky."
But since the judicial branch of government is, in fact, inseparable from the executive vertical, the presidential team will be responsible for everything that happens in the domestic “Temida temples.” "Zelensky will have to answer electorally for the decision of the courts. And in any case, whether he intervenes in court decisions or not - people will blame the president for this. In the same way that the IMF and our international donors place all responsibility on the authorities," Petrenko notes.
"The events under the Economic Court are quite predictable because our government is struggling to create a kind of "doll" and sell it to the IMF. In September, there was a completely failed attempt to “exchange” a compromise option for PrivatBank to fulfill any other request of the Fund. Until the opening of the land market in the most toxic scenario or until the liberalization of pricing for utilities. The IMF did not agree to this, and the Fund itself raised the question. The IMF may make some compromises, but not when it comes to the situation with PrivatBank. As you know, the Fund left Ukraine in September, and left with very great disappointment in the new government," Oleksiy Kushch clarified. Unlike many experts, he believes that the decision of the London court does not meet the interests of the state.
“Because it’s important for ex-owners to close two main court cases - in Ukraine and abroad. In London, as you know, PrivatBank’s first dissociated themselves from the hearing, citing that this was not their jurisdiction. If the decision had not changed, then the foreign court case would have been frozen for a long time. But now the process is open. How is this dangerous? If the Ukrainian courts decide that the nationalization of PrivatBank was illegal, the London court will not be able to take the opposite decision. That is, the court will be forced to close this case," Kushch said.
But at the same time, it is very important for the authorities to get the next IMF tranche, and a unique window of opportunity opens up for it. The London ruling is presented as a victory of the state and as concern for the public good, and at the same time, measures are being taken to disrupt the court hearing in Kyiv.
So that at the time of negotiations with the IMF there was hope for a tranche. If within a few months it is possible to obtain a tranche, judicial cases will be closed - of course, in the interests of the former owners."
But in the end, Bogdan Petrenko notes, “it is unlikely that Kolomoysky will receive PrivatBank or compensation for it as he wants. Some bonuses are still possible instead. Unless Kolomoysky and the president quarrel.”
This, incidentally, is a rather interesting version - in connection with the fact that the oligarch uses the entire “case” with “PrivatBank” as a smokescreen, under the cover of which he will achieve completely different goals.
This is also evidenced by Ruslan Bortnyk: “Judicial red tape can last a very long time and, most likely, will be decided already at the next president, or through one presidency. A positive solution to this question for Kolomoysky means political suicide for Zelensky. In fact, Kolomoisky uses the PrivatBank issue to blackmail the predecessors who took this issue, and to divert attention from other processes - in those areas that are gradually coming under the control of the Privat group.”
In any case, the fact that Kolomoysky once pushed Zelensky to the presidency will have difficult consequences for the latter.
The phrase "I fathered you... and I shall kill you" has never been illustrated so clearly.