Kyiv court rules nationalization of PrivatBank illegal

"Kyiv District Administrative Court, having considered in a court session the case on a lawsuit by Ihor Kolomoisky against the National Bank of Ukraine, the Cabinet of Ministers of Ukraine, the Deposit Guarantee Fund and the National Commission on Securities and the Stock Market, ruled illegal the decisions of the defendants, which resulted in the nationalization of PJSC PrivatBank, and declared ineffective since the moment of signing the contract on the purchase and sale of the bank's shares by the state," the report reads.

It notes that this case has been considered since June 2017.

The court explained that such a long period of consideration of the case was connected, in particular, with the overall burden on judges on the review of administrative cases and the need to study a significant amount of evidence in the case, which exceeds 50 volumes.

The report notes that the grounds for the adoption of such a decision by Kyiv District Administrative Court were, among other things, the failure by the defendants to prove that there were legitimate grounds to include PJSC PrivatBank in the list of insolvent banks and this eventually led to the procedure for its nationalization and the actual violation of the bank's nationalization procedure the order of which is regulated at the legislative level.

Thus, the report says, the procedure for nationalization of PJSC PrivatBank was declared groundless by the court and the one carried out with numerous violations of the current law at that time, resulting in unlawful state interference with the right of the bank's shareholders, including the plaintiff's right, to peacefully own property that is in violation of both the requirements of national legislation, including the Constitution of Ukraine, and the provisions of international standards in this area.

In December 2016, the government of Ukraine, on the proposal of the National Bank of Ukraine and shareholders of PrivatBank, the largest of which at that time were Ihor Kolomoisky and Hennadiy Boholiubov, approved the decision to nationalize this largest financial institution in the Ukrainian market.

The bank became state-owned, and the state spent more than UAH 155 billion on its additional capitalization.

op