The British judge Sara Cockerill will rule “as soon as possible” on whether the investment fund CRF I Limited is a legitimate creditor of the Banco Nacional de Cuba (BNC) and the Republic of Cuba for the collection of a debt sovereign for a value of 72 million euros.
After having listened to the arguments of both parties since last January 23, Cockerill concluded this Thursday the first phase of the judgmentinstigated by a lawsuit filed in February 2020 by the investment fund registered in 2009 in the Cayman Islands, reports the Efe agency.
If the magistrate of the Commercial division of the High Court of London rules in the next few weeks that CRF I is the creditor, then another trial would proceed on the payment itself of the debt. However, for this step it would be necessary to wait for the result of the possible appeals of the parties, in disagreement with a sentence against their interests.
CRF I argues that it has the contractual rights to the titles, acquired after the former director of operations of the BNC, Raúl Olivera Lozano, currently incarcerated, authorized on November 25, 2019 the assignment to the fund of the debt that until then had the ICBC Standard Bank, British subsidiary of Chinese bank ICBC.
The disputed debt derives from loans granted by two European banks to the Cuban State in 1984, when the BNC had among its functions those of central bank.
The BNC, as borrower, and Cuba, as guarantor, maintain for their part that this reassignment was “invalid”, since Olivera failed to comply with the procedures by approving it with his single signature (instead of two) and without consulting the Ministry of Finance. and Prices and the Council of Ministers, as established by current legislation.
Interpretation of the law and bribery: keys to the dispute
During the trial, the lawyers for the parties have clashed over points of Cuban and English legislation (which governs contracts) and have to determine whether the former official and the BNC itself have the authority to reallocate Cuba’s debt on their own. signed before 1997, when the Central Bank of Cuba (BCC) was created.
CRF I’s lawyer, Jawdat Khurshid, accused the Cuban State this Thursday of modifying the interpretation of its rules just for this trial, the Spanish agency reports.
Investment fund CRF I Limited assures that it legally acquired the rights to Cuba’s debt
Khurshid disputed the argument of the Cuban authorities, represented by Alison Macdonald and Anton Dudnikov, that Olivera and Londa Caridad Martí, former director of the BNC’s Foreign Debt Department, should consult the government before authorizing the reallocation of the disputed debt.
According to his version, this requirement is not included in the BNC statute and Cuba “only raised it” in this dispute, as well as the need for two signatures on the assignment certificates.
On the Cuban side, Dudnikov insisted that “there is nothing” in the BNC manual that authorizes managers to approve operations that “force” the bank or the Cuban state “against third parties,” the outlet added.
The lawyers defending Cuba also alleged, through the testimony of legal expert Juan Mendoza, last week, that the 1998 decree law that regulates the BCC left the BNC with “only administrative” powers, which requires it to consult the ministry on any debt assignment.
Khurshid questioned why Olivera, who had 40 years of experience, would make a misassignment after Cuba last minute withdrew its argument that the official accepted a financial incentive from CRF consultant Jeetkumar Gordhandas.
During her statement in the trial by electronic means, Olivera Lozano explained that she unilaterally approved the transfer of the debt after receiving in October 2019 a promise to pay 25,000 British pounds (30,700 dollars) made by Gordhandas.
Macdonald explained that although the question of motive now “is not legally relevant”, “you cannot ignore” the testimony offered by Olivera himself when he recognized that bribe.
The CRF lawyer considered that this was a “false testimony” and described the sentences imposed in May 2021 on this official, who is serving 13 years in prison, and the rest of the BNC board involved in the transfer as “farce”.
Although Gorhandas refuted the accusation of the presumed bribery, he admitted in his statement that CRF I asked the BNC to recognize him as a creditor of the Cuban sovereign debt “for the sole purpose of initiating this legal claim to force its payment,” according to Efe.
CRF I Fund admits that it acquired Cuban debt to initiate a lawsuit for non-payment
The current president of the BNC, Joscelín Río Álvarez, alleged The investment fund CRF I Limited “has not legally acquired Cuban debt” in accordance with the country’s legislation, and it does not appear as a creditor in the institution’s records, in which only the request mentioned by Gorhandas appears.
The Cuban State, which until now had not faced a lawsuit for non-payment of debt, has declared that it refuses to recognize CRF I as an assignee, considering it “a vulture fund” focused on forcing collection through the courts instead of acting as a “liable” creditor.
In his appearance before the judge, the president of the CRF I fund, David Charters, rejected the description and argued that the investor group “is too small” to be considered “a vulture fund.”
The manager, quoted by Efe, also assured that they do not have “the resources or the size” to be classified in this way, and maintained that they are not comparable to the most powerful Elliott Management that in 2016 pursued Argentina’s debt.
In turn, the fund has argued that the lawsuit is only intended to make Havana agree to negotiate, after it “ignored” several debt restructuring offers made in the last ten years.
Several representatives of Cuban institutions, among them the Minister of Justice, Óscar Silvera, as well as members of the island’s dissidence. Firms investing in Cuban debt have also followed him, calibrating how the litigation will affect their interests.
Efe/OnCuba
