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Report: Arbitration court rules against Bank Uralsib in debt write-off dispute

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Report: Arbitration court rules against Bank Uralsib in debt write-off dispute

The London Court of International Arbitration ruled against PJSC Bank Uralsib in its $8.6 million dispute with two holders of its subordinated debt, Vedomosti reported Sept. 20.

Uralsib issued the subordinated bonds in question in 2007, and the total value of the issuance amounted to $250 million. The subordinated debt was written off following the 2015 bailout of the lender by the Russian central bank. After the write-off, Royal Bank of Scotland Group PLC unit Natwest Markets and Société Générale SA unit Kleinwort Benson launched arbitration proceedings against the bank to recover their investments to the tune of $8.6 million.

Uralsib pledged to adhere to the court decision, noting that the lender's third-quarter results will not be affected by the ruling as it had already set aside $8.6 million in provisions for the proceedings. The plaintiffs also requested that the lender cover their legal and other proceedings-related costs, Bank Uralsib's representative told the newspaper, noting that the amount "is not critical" for the lender.

Natwest Markets and Kleinwort Benson are not the only Uralsib debt holders that managed to successfully challenge the debt write-off in the London Court of International Arbitration. In 2017, VTB Bank PJSC unit VTB Bank Austria received $5.8 million from Uralsib, the news report noted.