The Russian Federation denies and has always denied responsibility for the old tsarist bonds of 1916, Sergey Sokolov, a partner at Marks & Sokolov, who represents the defendants in the case filed by the American investment fund Noble Capital, told RBC.
„This debt was canceled by the Soviet government in 1918. Neither the USSR nor the Russian Federation have ever recognized their responsibility for them in accordance with established international law. They have long been consigned to the “dustbin of history”, he noted.
The Russian Federation, according to Sokolov, has demanded that the plaintiff withdraw his claim by January 30. “If this does not happen, we will file a motion to dismiss it under the US Foreign Sovereign Immunities Act“, the lawyer concluded.
The Noble Capital investment fund has filed a lawsuit in US federal court demanding payment of obligations under bonds issued by the Russian Empire in 1916. The Russian Federation, the Ministry of Finance, the Bank of Russia and the National Welfare Fund are named as defendants.
The plaintiff claims to be the legal owner of the $25 million bonds with a coupon of 5.5%, issued through the National City Bank of New York. According to the fund, despite the Soviet government's refusal to pay its foreign debt in 1918, its obligations to American investors were not terminated, and therefore Russia should inherit the debts.
The plaintiff estimates the amount of the claim at $ 225 billion, including interest and the gold clause - the binding of the payment currency to the gold standard, which was in force until the early 1970s. Noble Capital indicated that the debt on the imperial bonds could be repaid with the help of Russian assets frozen due to sanctions. The plaintiff emphasizes that this is not a matter of confiscation, but rather of debt set-off as a form of fulfillment of the obligation. This mechanism, according to the fund, is in accordance with international law and differs from the seizure of assets.