Belarus proposes to move Eurobond dispute from Moscow to London or Minsk

The Ministry of Finance of Belarus believes that the dispute over the country’s Eurobonds should be transferred to the court in Minsk or London, as required by the initial issue documentation. This was stated by a representative of the department at a meeting in the Moscow City Court, where the claims of a Russian private investor to the Belarusian Ministry of Finance are being considered. The lawsuit was filed due to the fact that, due to sanctions, payments on bonds ceased to reach Russian holders of securities.

“The terms of both prospectuses contain an arbitration clause that disputes are resolved in accordance with the arbitration rules of the London Court of Arbitration – LCIA (London Court of International Arbitration),” insists a representative of the department (quoted from RBC). In addition, according to the Chisinau Convention on Legal Assistance, ratified by Russia, the courts located at the place of activity of the defendant, in this case, in Belarus, are competent. The representative of the Ministry of Finance stated that the Russian courts could not consider the dispute, and petitioned to terminate the consideration of the case.

The next hearing in the case will take place on September 6. The plaintiff is a private investor Alexander Marchenkov. His claims relate to two issues of Belarusian Eurobonds maturing in 2030 and 2031. He demands from the Ministry of Finance of Belarus to redeem the bonds he bought for $280,000 ahead of schedule, as the international agency Moody’s recognized a default on the country’s public debt. He also insists on receiving coupons in the amount of $17,000 from the Belarusian Ministry of Finance and asks to compensate for legal costs. The total amount of his claims is about $310,000.

The representative of the Ministry of Finance insists that Belarus did not completely refuse payments. To receive them, according to him, Russian investors need to open an account with Belarusbank and submit documents confirming their ownership of securities to the ministry.

The private investor Sergei Sazonov, who is a holder of Belarusian Eurobonds, stated, however, that despite having an account, the Ministry of Finance refused to pay him. “Payments of funds to holders of Eurobonds will not be resumed until the completion of all domestic procedures to amend the joint resolution of the government and the National Bank of Belarus,” the response of the Belarusian department says.

Four issues of Belarusian Eurobonds are currently in circulation: Belarus-2026 ($500 million), Belarus-2027 ($600 million), Belarus-2030 ($600 million) and Belarus-2031 ($750 million). In the summer of 2022, the Belarusian Ministry of Finance announced that it would transfer payments directly, through its infrastructure, in the national currency. The agency has already sent the holders of Eurobonds an amount equivalent to $1.15 billion: $800 million was for the redemption of the Belarus-2023 issue, $350 million for coupons for five issues, RBC specifies. Russian investors did not receive these funds, as the money was stuck in accounts in the Belarusian financial infrastructure.

About the problems that have arisen for Russian investors – in the material “Kommersant” “Old Man Bond”.

Laura Keffer