December 4, 2018 / 11:20 AM / 5 days ago

London court throws out PrivatBank case against former shareholders

LONDON (Reuters) - A London court ruled on Tuesday that it had no jurisdiction in a case pitting PrivatBank against its two former main shareholders, representing a setback in efforts by Ukraine’s largest lender to claw back money it says was lost to fraud.

Women use PrivatBank ATM machines in Kiev, Ukraine November 9, 2018. REUTERS/Gleb Garanich

PrivatBank plans to appeal against the High Court’s judgement, declaring its intention on Nov. 23 after seeing a draft ruling. The final judgement handed down on Tuesday also set aside a freezing order on the assets of Ihor Kolomoisky and Gennadiy Bogolyubov.

The order remains in place until the outcome of the appeal.

The judge concluded that the bank had dragged three London-based companies into the heart of its claim solely to have the case tried in London and that it should be tried somewhere else.

“The court has no jurisdiction against the First and Second Defendants and for that reason, too, the orders – including the worldwide freezing order – that have been made against them must be set aside,” Judge Timothy Fancourt said in his ruling.

PrivatBank’s case against Kolomoisky and Bogolyubov alleges fraud that it says cost the bank hundreds of millions of dollars. The former owners strongly deny any wrongdoing.

“Mr Kolomoisky has always maintained that the bank’s claims are politically motivated, misconceived and will fail,” Andrew Lafferty, a partner at law firm Fieldfisher and spokesperson for Kolomoisky, said on Tuesday.

The bank on Tuesday said it is confident it will ultimately succeed in bringing its claims to trial in London.

The case is part of a protracted legal battle between the Ukrainian government and PrivatBank’s former owners after it was forcibly nationalised in December 2016 as part of a clean-up of the country’s banking system.

Recovering some of the PrivatBank money the government claims was lost would help to shore up Ukraine’s finances as time runs out for it to secure more aid from the International Monetary Fund.

Kolomoisky has also instigated a number of lawsuits and wants to regain control of the bank.

Reporting by Dasha Afanasieva; Editing by Susan Fenton and David Goodman

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