Russia sues Ukraine for UAH 3.2 bln for UESU

Russia’s Defense Ministry filed a lawsuit in Ukraine’s Kyiv Economic Court for the nonpayment of UAH 3.2 bln (USD 0.4 bln) pursuiant to a criminal case related to United Energy Systems of Ukraine, Interfax reported on Friday. Russia asked for Ukraine’s Cabinet of Ministers and the State Treasury Service to be called as defendants in the case and also named UESU as a third-party. The next hearing in the case is scheduled for September 12. A second criminal case is pending against former Prime Minister Yulia Tymoshenko over the alleged embezzlement of USD 406 mln in state funds by UESU, which she headed in 1995-1997.

Brad Wells: The Ukrainian opposition camp has quickly jumped behind Russia’s lawsuit. Tymoshenko’s lawyer went so far, according to Kommersant this morning, as to call the lawsuit a “gift” since it will force the government to either deny UESU had any debts (which was part of the prosecution’s charges against Tymoshenko) or have to fork over a pile of cash in monetary damages to Russia. Though Russia has yet to comment officially on the timing of the lawsuit, we suggest that its appearance at about the midpoint in the parliamentary election campaign implies political motives.