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Case details

The Law Debenture Trust Corporation plc (Respondent) v Ukraine (Represented by the Minister of Finance of Ukraine acting upon the instructions of the Cabinet of Ministers of Ukraine) (Appellant) No. 2

Case ID: 2018/0191

Case summary


In the Appeal by The Law Debenture Trust Corporation p.l.c.:

(i) whether there is any "domestic foothold" for the allegations of duress made by Ukraine or whether the foreign act of state doctrine is relevant to or engaged by the allegations such that they are non-justiciable before the English Court; and (ii) whether the claim (or any of its aspects) ought to be stayed.

In Ukraine’s Appeal: (i) whether Ukraine’s defence of lack of contractual capacity has a real prospect of success (including whether Ukraine as a sovereign has unlimited capacity to contract); (ii) whether Ukraine has an arguable case that Ukraine’s Minister of Finance did not have ostensible authority and/or usual authority to enter into the Notes and that it has not ratified the Notes;

(iii) whether Ukraine’s defence that it was entitled not to repay sums otherwise due as a countermeasure has a real prospect of success; and (iv) whether there is a "compelling reason" within the meaning of CPR r24.2(b) for any of Ukraine’s defences to be determined at a trial irrespective of whether any of those defences satisfy CPR r24.2(a).


The Law Debenture Trust Corporation p.l.c. (the "Trustee") is trustee of notes with a nominal value of USD 3bn carrying interest of 5 per cent per annum (the "Notes"). The Notes were issued by Ukraine (subject to Ukraine’s arguments that the Notes are void or voidable). The Notes were constituted by a trust deed to which the Trustee and Ukraine were named parties. The sole subscriber of the Notes was the Russian Federation.

The principal amount of the Notes fell due for payment, together with the last instalment of interest, on 21 December 2015. However, payment was not made, and Ukraine has refused to make payment. The Trustee commenced proceedings for payment. Ukraine filed a Defence that resisted payment on the grounds that: (i) Ukraine lacked capacity to enter into the transaction as a matter of Ukrainian law; (ii) Ukraine’s signatory (its Minister of Finance) lacked the authority to enter into the transaction by which the Notes were issued; (iii) Ukraine was entitled to avoid the Notes for duress arising from allegedly unlawful threats made by the Russian Federation against Ukraine (including alleged threats to its territorial integrity and alleged threats of the use of unlawful force) and the application of allegedly unlawful trade measures and economic pressure by the Russian Federation before the transaction was entered into; (iv) the terms on which the Notes were issued included implied terms that (inter alia) they would not be enforceable in circumstances where the Russian Federation itself was allegedly preventing or hindering their performance; and (v) in light of the Russian Federation’s alleged breach of its obligations towards Ukraine not to use force against Ukraine and/or not to intervene internally in the affairs of Ukraine, Ukraine was entitled to rely on the public international law doctrine of countermeasures to decline to make payment.

The Trustee does not accept Ukraine’s Defence. The Trustee’s position is that even if Ukraine’s account of what occurred were accurate, it would be irrelevant to the Trustee’s rights under the Notes. The Trustee applied for summary judgment.

Summary judgment was granted by Blair J, who also granted Ukraine permission to appeal. The Court of Appeal held that Ukraine had an arguable defence of duress (defence (iii)), and that if it had not been justiciable then the claim would have been stayed, but not in respect of its other defences. (The Court of Appeal held that ratification was not suitable for summary determination, but this did not affect the result as Ukraine was bound by the ostensible authority of the Minister of Finance.) The Trustee appeals in respect of defence (iii) and the Court of Appeal’s decision that it would have stayed the claim if it was non-justiciable, and Ukraine appeals in respect of defences (i), (ii) and (v) (but not in respect of defence (iv)).

Judgment appealed

[2018] EWCA Civ 2026





The Law Debenture Trust Corporation plc



Lord Reed, Lord Hodge, Lord Lloyd-Jones, Lord Kitchin, Lord Carnwath

Hearing start date

11 November 2021

Hearing finish date

11 November 2021

Watch hearing
11 Nov 2021 Morning session Afternoon session

Future Judgment Update

Please note that appeal in the matter of The Law Debenture Trust Corporation plc (Respondent) v Ukraine (Represented by the Minister of Finance of Ukraine acting upon the instructions of the Cabinet of Ministers of Ukraine) (Appellant) No. 2 has been heard by the Supreme Court and is currently awaiting judgment.

As soon as the judgment hand-down date is confirmed, it will be published on the Future judgments page of this website. As a very broad indication, judgments tend to follow between three to nine months after the conclusion of the appeal hearing, although in some cases it may be earlier than that. Information about judgment hand-downs is usually announced one week in advance. We are unable to give any indication of the likely hand-down date for judgments not listed on the Future judgments page.