Latvian State Asset Firm Seeks $75 Million From Russia in CourtAaron Eglitis
Reverta AS, the state-owned Latvian asset management company, is seeking $75 million from Russia at the European Court of Human Rights to recover funds from a loan granted almost a decade ago.
The case was filed in 2013 after the Russian Supreme Commercial Court refused to enforce an arbitration ruling on the credit provided by Parex Banka AS, according to a copy of the claim submitted to the human rights court and obtained by Bloomberg.
In July, Russia’s Constitutional Court ruled that domestic law superseded judgments by European legal authorities following verdicts that granted compensation to former shareholders of defunct oil company Yukos. Reverta, created from the 2008 failure of of Parex Banka, once Latvia’s second-biggest lender, was trying to collect on a 2006 loan given for building a gas processing plant.
“The tribunal provided a final award in respect of the right to recover the debt,” Reverta said in the claim. The company “only sought enforcement of that award, national courts redetermined the results of the arbitral award and ruled against the applicant.”
Russia’s Justice Ministry declined to comment, saying they have not seen the claim. Nina Saloman, an ECHR spokeswoman, said a timeframe for a hearing had not been set yet.
Parex was seized by the Latvian government in 2008 and split into a bank with good assets and Reverta as the holder of bad assets. Reverta’s mandate is to collect on impaired assets and loans and return money to the state, which pumped in about 1.7 billion euros ($1.9 billion) in liquidity, capital and other support into Parex.
Latvia’s state-owned Privatization Agency owns 84 percent of Reverta, the European Bank for Reconstruction and Development has 12.7, with the rest held by minority shareholders.