The investment fund CRF I Limited, registered in the Cayman Islands, assured this Monday that it legally acquired the assignment of rights over part of the debt contracted by the Cuban Government through loans from two banking institutions in 1984, and which is in litigation before the courts of the United Kingdom.
Judge Sara Cockerill, of the Commercial Division of the British High Court, must decide in this process whether CRF I Limited has the rights to that portion of the Cuban debt valued at 72 million euros, which was derived from the loans subscribed by the Bank Nacional de Cuba (BNC), with the Republic of Cuba as guarantor, with the banks Crédit Lyonnais and L’Istituto Bancario Italiano.
The political and financial authorities of Cuba refuse to recognize CRF I Limited as the legitimate holder of its sovereign debt for being a “vulture fund” and not a “responsible creditor”, like others it has, according to what its legal team affirmed this Monday in the trial that is held in London and reviewed by the agency efe.
? Informative note from the Superintendence of the Central Bank of Cuba
???https://t.co/R3voJm5ayr@marta_wilson@mayobrebcc@aquinbeta@RosaCantillo8@GarridoYaisel pic.twitter.com/yB7ceePkIW— Central Bank of Cuba (@BancoCentralCub) January 13, 2023
Over the years, this outstanding debt, governed by a contract protected by English law, was transferred between various entities until it reached ICBC Standard Bank, the British subsidiary of the Chinese bank ICBC.
In the legal dispute, CRF assures that the BNC authorized on November 25, 2019 the assignment to this fund of the rights to the debt that ICBC had, which now allows it to claim its payment. The BNC and the Republic of Cuba, represented in this case, maintain that said assignment was not legitimate because the required procedures were not followed.
The Cuban side states that the then director of operations of Banco Nacional, Raúl Olivera Lozano, currently under arrest on the island, signed the order unilaterally, when two signatures were needed. It also specifies that the official did not request the necessary prior authorization from the Cuban Government as established by the legislation in force in the country.
For its part, CRF I Limited argues that Olivera and other employees followed established processes and accuses the Cuban authorities of “manipulating” the facts, including Olivera’s imprisonment for allegedly accepting a bribe from CRF agents.
The investment fund CRF I Limited, which is currently the main holder of Cuban debt in the world, for an estimated total value of 1,200 million euros, once again requested the assignment of rights to the Cuban authorities on September 23, 2020, what was denied him, recalls the Spanish medium.
During the session on Monday, the lawyer for the Cuban side, Alison Macdonald, explained that Cuba, which by contract must consent to the assignments except for “reasonable” exceptions, did not agree to that assignment because it considers CRF a “vulture fund,” founded exclusively “to seize Cuban debt” in order to obtain benefits by forcing its payment through legal actions.
In a January 13 statement, the Central Bank of Cuba (BCC) explained that this procedure is public debt because “it was contracted by the BNC before 1997, when it had functions of the Central Bank.”
Since then, the statement added, the entity has no power to act on behalf of the Cuban Government or to approve the assignment of public debt without the prior authorization of the Ministry of Finance and Prices and the Council of Ministers.
From the CRF legal team, lawyer Jawdat Khurshid denied that his client is a vulture fund and argued that since 2013 he has been trying to negotiate a debt restructuring with Cuba, without receiving a response.
He considered then that “the only way” to get the Cuban authorities to react was to resort to Justice, even if it was “for a small part” of his bond portfolio.
This first part of the judicial process, with the aim of establishing whether CRF I Limited is the legitimate creditor, is expected to last until next Monday. During that time, according efeeach party will detail their arguments and will call their witnesses, including Olivera himself, for the Cuban side, and experts in Cuban legislation.
Efe/OnCuba
