Nord Capital RSD calls itself the lawful owner of Russian Empire bonds worth $25 million with a 5.5% coupon.
The investment fund Noble Capital RSD is demanding that Moscow pay $225 billion on debt obligations of the Russian Empire. The corresponding lawsuit against the Russian Federation, Russia’s Finance Ministry, the Central Bank of Russia and the National Wealth Fund was filed in a U.S. federal court in the District of Columbia, reports Russia’s news agency RBC.
“The Russian Federation, in violation of the doctrine of continuity of power, refused and continues to refuse to fulfill certain obligations on sovereign debts incurred by its predecessor, the Russian Empire,” the suit says.
Nord Capital RSD describes itself as the lawful holder of Russian Empire bonds worth $25 million with a 5.5% interest rate, issued in 1916 and placed through the National City Bank of New York (now Citibank).
The plaintiff stresses that Russia, as the legal successor to the USSR, inherited the debts, which together with interest are valued at no less than $225.8 billion (17.5 trillion rubles at the current exchange rate).
That sum equals 43% of Russia’s annual budget (40.2 trillion rubles) and exceeds the combined market capitalization of Sberbank, Gazprom and Rosneft (6.5 trillion, 2.9 trillion and 4.2 trillion rubles, respectively).
The fund proposes paying the debt with Russian assets frozen in 2022. About $5 billion of the Central Bank’s funds were blocked in the United States, while the rest are in European countries.
Russia’s Finance Ministry said the lawsuit in the United States “falls under the competence of the Prosecutor General’s Office.” The defendants will be represented by the law firm Marks & Sokolov.
Lawmakers in the State Duma expressed outrage at the unexpected turn of events, with some even arguing that today’s Russia “is not the successor of the Russian Empire.”
Lawyers interviewed by Russian media noted that even acknowledgment of the debt previously would not have enabled enforcement of a court decision. However, current sanctions policies have created opportunities for interim measures and asset management.
