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Russia suing Ukraine for defaulting on $3 billion debt

Staff writer ▼ | January 4, 2016
Russia's finance ministry it was suing Ukraine for defaulting on a $3 billion debt to Moscow, following an order by President Vladimir Putin.
Anton Siluanov
Tensions   Kiev is "in a state of default"
Kiev is "in a state of default" regarding its obligations toward Moscow and legal proceedings would ensue, the ministry said.

"Russia's finance ministry has initiated procedures required for an immediate lawsuit against Ukraine," the statement said, adding that the lawsuit would be heard in a British court.

Ukraine announced last month it would not make the payment on its debt to Moscow after Putin vowed to sue Kiev if it failed to pay by the end of 2015.

The debt stems back to 2013 when Russia loaned $3 billion to the Kremlin-backed president Viktor Yanukovych, before pro-European protests that led to his downfall.

Ukrainian authorities say it is not a sovereign loan by one state to another but rather a transaction made via the financial markets that is subject to terms agreed with other creditors.