Kolomoisky's companies have shares of Russian banks in Ukraine arrested through court

The Court of Appeal of Kyiv on September 5 satisfied an appeal by a number of companies affiliated with Ihor Kolomoisky and his partners (including PJSC AeroBud, Privatoffice Ltd., Privatland Ltd., Everest Estate Ltd, Television and Radio Company Zhysa, Crimea Development Ltd, AMC Financial Capital Ltd, AMC Financial Vector, etc.), and imposed arrest on shares of Prominvestbank (owned by the Russian state corporation Vnesheconombank); shares of Sberbank (owned by the Russian Sberbank); shares of VTB Bank (owned by the Russian state-owned bank); shares of VTB Bank (owned by Russian state-owned VTB Bank.

In addition, the Kyiv Court of Appeal banned Prominvestbank, Sberbank, and VTB Bank from liquidating or restructuring legal entities, as well as from taking any action aimed at alienation of movable and immovable property owned by these banks, and from alienating in any way any property, including, but not exclusively, contracts of sale, exchange, donation, etc., Finbalance reports.

The arrests of banks' shares and the prohibition on alienation of immovable and movable property were imposed by the Kyiv Court of Appeal at the request of Ihor Kolomoisky and his partners as a collateral under their claim in case No. 796/165/2018 on the recognition and authorization to perform the Arbitration Court of The Hague (Netherlands) from May 2, 2018 (in the case PTS No.2015-36) on collecting from Russia represented by the Ministry of Justice of the Russian Federation the amounts as compensation for immovable property expropriated (seized) from the mentioned companies in Crimea after its annexation by Russia.

As grounds for their appeals to arrest the shares of Prominvestbank, Sberbank and VTB Bank, the claimants pointed the fact that the decision of the Arbitration Court of the Hague (Netherlands) - due to Russia's violation of the agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on the promotion and mutual protection of investments of November 27, 1998 – awarded in their favor $139 million to be paid by the Russian Federation as compensation for their real estate property in Crimea.

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In the opinion of the claimants, the shares of Prominvestbank, Sberbank, and VTB Bank, as property of the state of Russia on the territory of Ukraine, "may be subject to seizure based on an international court decision."

In this context, the Kyiv Court of Appeal came to the conclusion that in the territory of Ukraine, indeed, " there is property owned by the Russian Federation and which may be seized based on an international court decision."

According to the National Bank of Ukraine, as of July 1, 2018, Sberbank's total assets (before allowances) amounted to UAH 64.2 billion, while net assets (after allowances reserves) were at UAH 31.3 billion. Prominvestbank – respectively UAH 50.8 billion and UAH 17.2 billion, and VTB Bank – respectively UAH 25.4 billion and UAH 8 billion.

Thus, as of July 1, 2018, the three subsidiaries  of Russian state-owned banks accounted for UAH 140.3 billion in total assets (7.6% of total assets of the whole banking system) and UAH 56.6 billion of net assets (4.4% of net assets of the banking system).

Russian mass media reported that after the annexation of Crimea, the Russian occupation administration "nationalized" 87 objects belonging to Kolomoisky and the Privat Group. As it was noted, among "nationalized" objects there were Foros Sanatorium, two recreation centers for children, an over 3,800 square meter building at the recreational complex Tavria, and the Niva Yayla tourist base in the village of Hirskiy near Yalta. Among the assets there were also 36 Ukrtatnafta gas stations, fuel and lubricants warehouse in Simferopol, and a liquefied gas filling facility in Kerch.

As UNIAN reported earlier, the international arbitration in The Hague on February 24, 2017, ruled that Russia was obliged under the bilateral investment agreement to protect Ukrainian investors in the annexed Crimea.

In particular, the judges recognized the principle that Russia could be held liable in accordance with the bilateral investment agreement between Ukraine and Russia for violating the rights of investors in Crimea for the period after the signing by Russia of regulations which included this contentious territory into the Federation. It was the first time that the Arbitration extended the validity of such an agreement to such circumstances. The claims relate to bank investments, as well as investment in the airport, while Russia denies jurisdiction and does not attend arbitration hearings. These are the cases of 2015: Ihor Kolomoisky and Belbek airport vs the Russian Federation, as well as PrivatBank and Finilon vs the Russian Federation.