trending Market Intelligence /marketintelligence/en/news-insights/trending/J9EKgJPi3io5gSMeLNlN1w2 content esgSubNav
In This List

London court rules in favor of Baring Vostok in Orient Express Bank dispute


Bank failures: The importance of liquidity and funding data


Staying Strong in Volatile Markets: How Banks Can Overcome Challenges to Funding and Lending


Silicon Valley Bank Uncovering Regional Bank Stress with Equity Driven Credit Models

Case Study

A Scorecard Approach Helps a Bank Assess Credit Risks with Smaller Companies

London court rules in favor of Baring Vostok in Orient Express Bank dispute

The London Court of International Arbitration, or LCIA, ruled against Public Stock Co. Orient Express Bank minority shareholder Artem Avetisyan in his call option dispute with Baring Vostok Capital Partners Ltd., which controls the lender, Vedomosti reported March 26.

The court ordered Finvision Holdings, through which Avetisyan owns his minority stake in the bank, to discontinue arbitration proceedings launched recently in Russia. It took this action in order to enforce the execution of a 2016 call option agreement with Baring Vostok regarding a 9.99% stake in Orient Express until other orders are issued by the LCIA regarding the dispute. The LCIA also granted Baring Vostok the right to sue Finvision if the latter violates the ruling.

No ban on share issue

The London court, however, did not ban Finvision from taking actions regarding the pricing and timing of a 5 billion-Russian-ruble additional share issue that is planned at Orient Express Bank. The share issuance is aimed at propping up the lender's capital after the Russian central bank requested that it set aside 20 billion rubles in additional loan loss provision following a 2018 inspection.

Under the 2016 agreement, Finvision Holdings had a call option to acquire a 9.99% stake in Orient Express from Baring Vostok's company Evison Holdings by March 31, 2018, but was not able to successfully execute the transaction, which would give Avetisyan and his partners control of the bank. When launching the proceedings in Russia, Finvision asked the local arbitration court to freeze the 9.99% stake in Orient Express Bank that is part of the call option dispute and prohibit the planned 5 billion-ruble share issue, which would dilute Finvision's holding in the lender.

Avetisyan plans appeal

Baring Vostok, which owns an over 50% stake in Orient Express Bank via Evison Holdings, is satisfied with the decision of the LCIA, while Avetisyan and Finvision plan to ask the London court to reconsider the matter, Vedomosti reported, also adding that the next sitting of the Russian arbitration court has been postponed until April 1 at the request of Evison Holdings.

Russian media outlets earlier cited Baring Vostok's founder Michael Calvey as saying that his company did not fulfill its obligations under the 9.99% call option agreement because of the withdrawal of assets from Avetisyan's lender Uniastrum Bank prior to its 2017 merger with Orient Express, which violated the agreement. Calvey was recently detained over alleged embezzlement of 2.5 billion rubles from Orient Express. The businessman denies any wrongdoing, claiming that the accusations are part of the corporate dispute with Avetisyan over control of Orient Express.

As of March 25, US$1 was equivalent to 64.08 Russian rubles.