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Ukrainian govt to contest court ruling on payment of debt to Russia

Deputy Prime Minister Valery Khoroshkovsky said earlier that there is no extra money in the budget to pay the debt

KIEV, September 27 (Itar-Tass) —— The Ukrainian government has taken legal action to contest the ruling of Kiev’s Commercial Court that ordered the payment of 390 million U.S. dollars to the Russian Defence Ministry in debts owed by the Unified Energy Systems of Ukraine (UESU) previously headed by former Prime Minister and opposition Batkivshchina party leader Yulia Timoshenko.

“The appeal against the court ruling was filed on September 25 with Kiev’s Commercial Court of Appeals by a representative of the Cabinet of Ministers of Ukraine,” the Justice Ministry press service said on Thursday, September 27.

Deputy Prime Minister Valery Khoroshkovsky said earlier that there is no extra money in the budget to pay the debt.

“The Ukrainian state will not pay a single kopeck to the Russian Federation in this case. Moreover, after the end of the election process, the court of appeals or cassation will cancel this ruling on the basis of non-existent guarantees that are not even mentioned in the lawsuit,” the head of the opposition Batkivshchina party’s election headquarters, Alexander Turchinov, said.

Former Finance Minister Viktor Pinzenik said the court’s decision to recognise the commercial debt was a state nonsense and a dangerous precedent. “Ukrainian legislation, as everywhere in the world, differentiates between liabilities of the state and liabilities of enterprises; the state is not liable for the obligations of enterprises, and enterprises are not liable for obligations of the state,” he said.

Kiev’s Commercial Court partly upheld the Russian Defence Ministry’s claims against the Ukrainian government with regard to UESU’s debts and ordered the government to pay about 389 million U.S. dollars to Russia. The ruling will become effective if not appealed by the parties.

The debt of 405.5 million U.S. dollars arose under unfulfilled contracts between UESU and the Russian Defence Ministry in 1996-1997 when the corporation was headed by Timoshenko, who is now serving a prison term in a “gas case”.

The Unified Energy Systems of Ukraine that was headed by Timoshenko before she became prime minister drew suspicion of the tax authorities back in 1996.

The tax authorities had noticed a discrepancy between the taxes paid by the company and its big turnover.

“In 1997, a criminal case was opened. The investigation continued despite the fact that the company's head, Yulia Timoshenko, had immunity as an MP. Now the court should examine this case,” Prime Minister Nikolai Azarov said earlier.

The Prosecutor General's Office has also filed a lawsuit demanding compensation from Timoshenko for damages in the amount of 19.5 million hryvnia in this case.

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