Rustam Tariko's default bondholders did not succeed in achieving a recovery of 49% of the shares of his Russian Standard Bank. The decision to refuse to collect the shares carried the judge of the Moscow Arbitration Court on the suit of London Citibank, which is a mortgagee of shares and trust managers. Citi intended through the Russian court to recover the shares of the bank, and then sell them from public auctions (the agreement on the pledge consisted of Russian law). Structure Tariko - Bermuda Russian Standard Ltd. - A few years ago, defaults for securities allowed and now there should be more than $ 750 million to their owners, taking into account interest.
How shares of the bank were pledgedRussian Standard is registered on Bermuda and belongs to Roust Holdings Tariko. The company's default for $ 545 million was allowed in October 2017, and a year later, without paying the coupon. These bonds were issued in 2015 to restructure the Russian standard subordinated Eurobonds $ 350 million and $ 200 million. Investors then received 18% of the Russian Standard nominal and paper. At the same time, they received assurances that to save the bank, it is necessary to write off part of the debt and postpone the deadlines for its return: coupon payments were to be resumed immediately after the recovery of the Bank's financial indicators.
Since 2018, the lenders of the lenders Tariko require the return of debt, threatening the recovery of shares: last year it came to court.
CTII claim is not the first lawsuit. The Pala Assets Foundation demanded from Tariko, its companies and the Board of Directors of the Bank of about 3.6 billion rubles. PALA claims are related to the fact that due to a number of transactions between the bank and the companies of the ROUST group, Tariko decreased the cost of the bank's stakes, which brought the damage fund. But the Moscow Arbitration Court rejected the fund's requirements.
What was the protection of the "Russian Standard"The position of the defendants on the claim, the shareholders of the Russian Standard - Invest Bank and "Russian Standard" (owned by Tariko), became a surprise for the other side at the first meeting in November: they suddenly declared that because of the "gap" in the contract pledge Invalid, so it is impossible to recover it.
The lawyer of the Russian Standard company Sergey Kovalev explained the position so. There are two groups of relationships: In the first of them, the contract was concluded owners of bonds and the issuer, and in the second - Citibank, with which the shareholders of the Russian Standard concluded a contract of collateral. But these groups of relations are not connected in any way, the lawyer explained, because Citibank is the holder of the pledge and side of the contract, but the owners of the bonds are not. On the other hand, Citibank himself is not a lender under the contract of securities.
Kovalev did not challenge that Citi is a party to the contract of collateral, but challenged the obligations of the issuer itself before the trust, referring to the fact that the issuer is not obliged to pay Citi, because it is not a lender, therefore the contract of collateral is not valid. The Russian law says that the debtor is obliged to fulfill obligations towards the creditor. But in this design, the creditor's interest is the most important element, and here it is suggested that Citibank does not have impaired interest, but protects the interests of others, Kovalev noted.
The lawyer Citibank said that Russian Standard had never previously doubted the reality of the contract, and the question was that the contract was invalid, originally arose when the trust manager appealed to the court. "We believe that this is an obvious attempt to avoid their obligations, this is an unfinished approach," he said.
Citi's defense brought as an example of the decision of the English court according to the similar case, where the court determined that the trust in a similar agreement is a normal lender and have the right to implement the provision. Citibank lawyer noted that under the conditions of bonds, the obligation by the Issuer should be paid in favor of the trust and it is he who has the right to implement the recovery on the deposit.
The design of the track in English is close to the Russian law, the lawyer said: there are bonds, they have economic interest, but since there are many of them, then certain functions for the imposition of penalties are accumulated from the representative of the owners of bonds (air defense) in Russia, or trust in English.
Kovalev answered this that the tracus could be a representative of the owners of the bonds, but the owners of the bonds on the Russian law did not give him such powers, therefore, it cannot claim for a deposit in favor of Citibank bonders.
The plaintiff is too exaggerating the significance of English law, because the contract is concluded in Russian, the lawyer of the Russian Standard - Invest company Gregory Chernyshov noted at the meeting at the meeting. According to him, Tausti did not transfer the papers into trust management, he does not have any rights to bonds, so he cannot be a lender and apply for a deposit. Chernyshov noted that the lack of the status of the creditor in trust means the invalidity of the contract of collateral in principle.
The lawyer Citibank indicated that the defendants did not provide evidence of their position that the London Bank did not become a creditor for the trust contract. In addition, the proposal is not based on English law, if the obligation arose in English, this is "Big Novel, which turns all the jurisprudence."
Another argument of the plaintiffs was that the contract of deposit ceased due to objective reasons due to the expiration of a predatory term. "There is no certain period in the pledge agreement, therefore a predatory period, during which one can make a penalty, is one year from the moment of default, and it has already expired," said Kovalev. Paper defaults The company allowed in 2017-2018. Citi's sewn in this matter referred to the recent decision of the Plenum of the Supreme Court, which clarified that a permanent period was calculated from the moment when the maturity occurs, the term of full repayment should occur in 2022.
What are the creditors sayThe court decision is frankly illegal, denies the basic legal principles and approaches to the structuring of transactions, referred to the message of the creditors group, which includes the Pala Assets Foundation (owns 25% of the release), a representative of A1, which represents creditors in the courts. "It's hard to explain to such behavior of the judge with the lack of necessary knowledge. It seems that the judge in this dispute had a special attitude towards the defendant, "he noted.
Tariko during the debt restructuring in 2015, instead of a reliable debtor, a design with an offshore company and a collateral contract in favor of Citibank, he reminds: He reminds lenders to meet the bank and shareholder. And now Tariko and his lawyers say that the design of the bond loan proposed by them does not work, the pledge, which he himself gave creditors does not exist, and Citibank, in his opinion, is not authorized to represent the interests of creditors.
"These facts of the absurdity of the decision are convinced that the Court of Appeal does not leave him stone on the stone and restores justice," the representative added.
Court's Hattle This is a precedent that undermines confidence in the Institute of Russian Eurobonds, the representative of Miriad Rus (represents about 10% of bonds) Andrei Rozhkov: This solution will make it difficult for Eurobonds to Russian issuers.
Where it leadsThis decision is unlikely to become a precedent, but an example of how it is not necessary to structure the transactions - quite, the managing partner of the Biranov and Partners and Partners of Alim Bischenov: "In my opinion, a banal error takes place when drawing up a contract with Citibank, which de facto It was built on the mechanisms used in countries with English law, but the part of the parties were authorized for consideration of the disputes of the Russian court. " Expect that the Russian court will rely on the norms of British law would be quite prudence, explains Biranov.
From the point of view of Russian law, Citi is really quite difficult to recognize the creditor, since in fact it is not the holder of papers. Actually, the fact that such rather complex schemes have become quite strange, the fact that such quite complex schemes have fallen into a contract for which the Russian court is authorized to resolve disputes. This is extremely difficult, from the point of view of Russian legislation, the design, says Bischenov: Formally, the owners of the shares are not mortgagers, because the shares are pledged by the City, and the CITY in turn cannot be recognized by the lender, because it is not the owner of the debt obligations of the issuer . According to a lawyer, lenders need to look for the opportunity to seek to meet the requirements in court on their own, without the mediation of the trust, however, in such a situation, they will most likely qualify for a deposit.
Obviously, if someone does not serve his debts, the provision should be dedicated to creditors, the head of the debt capital markets BCS Global Markets Alexey Kupriyanov is confident: regretted that, in fact, the arbitration court took the return position. Kupriyanov hopes that the question will still be resolved to satisfy the holders of papers, otherwise the faith of investors in fair protection in court can significantly decrease. "Panicious" sales of Russian bonds will not, the expert says, but in the future it will have an impact on the decision-making on investment decisions.