HANDS OFF THE "RUSSIAN STANDARDS". THE SUPREME COURT REFUSED TO RECOVER 49% OF CITIBANK'S SHARES

On September 25, Supreme Court Judge Irina Bukina did not give a move to the complaint in case No. A40-168876/2020 about the recovery of 49% of the shares of the "Russian Standard". In the case, the Russian bank acts as a third party. Russian Russian Standard – Invest and the Russian Standard Company are the defendants.

The defendants acted as liens under a trust agreement as part of the 2015 issue of Russian Standard Ltd (RSL) bonds for $451 million. The coupon rate was 13% per annum, writes Право.ги . Repayment was planned for 2022.

Russian Russian Standard has pledged 9.11% of its shares, and Russian Standard-Invest has pledged 39.88% of its shares. RSL defaulted in 2017 and 2018, and creditors did not wait for payments. In order to achieve what they are owed, the owners of the bonds, on whose behalf Citibank acted, filed a lawsuit to recover 49% of the "Russian Standard".

The Arbitration Court of the city of Moscow, as well as subsequent instances, refused to satisfy the claim. Russians Russian Standard – Invest and the Russian Standard Company were the real creditors of the principal debt. Accordingly, Citibank is not a proper plaintiff in this dispute. In accordance with the Civil Code, in the absence of a surety term in the pledge agreement, such surety is subject to termination with the condition that the creditor has not applied to the pledgor within a year after the term of the main obligation. Since there was no such time limit for this dispute, the Arbitration Court considered it possible to apply this rule of law. Subsequent instances considered the opinion of the Arbitration Court justified.

The Supreme Court fully supported the opinion of the lower instances, explaining that they did not make a significant and insurmountable judicial error that followed the violation of the law.