Ukraine v. Law Debenture Trust Corporation P.L.C. [2018] EWCA Civ 2026 (Court of Appeal)

This case is part of the ongoing dispute between Ukraine and Russia concerning an alleged $3 billion loan made to Ukraine through the issuance of Eurobonds in 2013.

The Court of Appeal in this decision reversed the earlier decision by the Commercial Court (Mr Justice Blair). Mr Justice Blair dismissed Ukraine’s objections to a summary judgment process and the Court granted summary judgment to LDTC in the sum of c. US$3 billion and interest. The Commercial Court decision is reported on here: http://foreignstatesinenglishcourts.com/2017/06/19/the-law-debenture-trust-corporation-p-l-c-v-ukraine-2017-ewhc-655-comm/

The Court of Appeal in overturning the decision of Mr Justice Blair held that Ukraine’s defence of duress was justiciable. The Court of Appeal held that since international law sets out reasonably determinate standards of conduct applicable between States on the international plane that there was no reason why the English law of duress should not treat these standards as providing an appropriate test of illegitimate pressure in the present case. As such, the defence of duress could not be summarily dismissed using the summary judgment procedure and the defence of duress should be the subject of a trial.

Moreover, the Court of Appeal decided that Ukraine has a good arguable case that the public policy exception to non-justiciability has effect in this case so as to enable the case to proceed. The Court of Appeal held that English public policy recognises and gives effect to the “strong international public policy” incorporated in jus cogens norms of international law, which includes the prohibition on the use of force by States contained in Article 2(4) of the UN Charter.

The Court of Appeal decision is available here: http://www.bailii.org/ew/cases/EWCA/Civ/2018/2026.html