Law of Ukraine

"On Ratification of the Financial Agreement (Project to Complete Underground Construction in Dnipropetrovsk) between Ukraine and the European Investment Bank"

Date of entry into force:
October 4, 2014

The Financial Agreement (Project to Complete Underground Construction in Dnipropetrovsk) between Ukraine and the European Investment Bank (hereinafter referred to as "Agreement") was signed on October 25, 2013 in Luxembourg.

The Constitution of Ukraine (Article 85, paragraph 32) states that the Verkhovna Rada of Ukraine provides consent for Ukraine to be bound by international agreements. And, according to Article 9 of the Law of Ukraine "On International Agreements of Ukraine", the Agreement is subject to ratification.

The Law ratifies the Agreement.

Article 1 of the Agreement establishes the following:
  • the European Investment Bank (hereinafter referred to as "Bank") grants to Ukraine (hereinafter referred to as "Borrower"), and the Borrower accepts, a loan of EUR 152,000,000 to finance the Project to Complete Underground Construction in Dnipropetrovsk (hereinafter referred to as "Project");
  • the Bank shall provide the Loan in up to 20 Installments. The minimum amount of each Installment, unless it is the undisbursed balance of the Loan, shall be EUR 5,000,000;
  • the disbursement of funds shall be made to the Borrower's account in EUR, open by any Ukrainian or foreign bank, which the Borrower shall communicate to the Bank in writing at least 15 days before the Planned Disbursement Date (with the IBAN code or in an appropriate format according to the local banking practice). That account must be the Borrower's account created for the project, and must be separate from all other assets of the Borrower;
  • by written request of the Borrower, the Bank shall defer disbursement of any Accepted Installment, in part or in full, until the date specified by the Borrower, where such date must be no later than 6 months after the Planned Disbursement Date, and no later than 60 days before the first repayment date of the Installment specified in the Disbursement Proposal. In such case, the Borrower shall pay the Deferral Compensation, calculated for the amount of the deferred disbursement. Any disbursement deferral request shall be effective relative to an Installment only if it is submitted at least 7 working days before the Planned Disbursement Date of the appropriate Installment;
  • the Borrower can, at any time, by sending a written notice to the Bank, cancel the undisbursed portion of the Loan in full or in part; the cancellation shall be effective immediately. However, such notice shall have no effect relating to an Accepted Installment with a Planned Disbursement Date within 7 working days after the date of such notice.

The interest rate shall be determined by Article 3 of the Agreement.

Article 4 of the Agreement provides for regular repayment, voluntary early repayment, and mandatory early repayment of Installments.

According to Article 5 of the Agreement, any amount payable by the Borrower under the Agreement as interest, compensations, or commission, and is calculated for a certain part of a year, shall be determined based on the following rules, respectively:
  • for interest and repayments payable under a fixed rate Installment, a 360-day year and a 30-day month shall be used;
  • for interest and repayments payable under a floating rate Installment, a 360-day year shall be used, plus days that have passed;
  • for commissions, a 360-day year shall be used, plus days that have passed.

Obligations and declarations of the Borrower are envisaged by Article 6 of the Agreement.

If the Borrower provides a third party with any security for any External Debt Instrument of the Borrower, or any prevailing or priority right in relation to it, the Borrower shall, at the Bank's request, provide the Bank with an equivalent security for the Borrower's obligations under the Agreement, or grant the Bank an equivalent prevailing or priority right (Article 7 of the Agreement).

Article 9 establishes the following:
  • the Borrower shall pay all taxes, duties, fees and other surcharges of any type, including stamp duty and registration fees that arise in connection with the signing or performance of the Agreement or any document related to it, and in the process of creation, documentation, registration, or enforced execution of any Loan security, in the appropriate amount;
  • the Borrower shall pay the principal amount, interest, compensations and other amounts payable under the Agreement in full, without deduction of any national or local fees, under the condition that if the Borrower must make any such deduction, it shall be added to the amount due to the Bank so that the net amount received after the Bank after the deduction equals the payable amount;
  • the Borrower shall pay all surcharges and expenses, including professional service fees, banking service or exchange expenses, which are incurred in connection with preparation, signing, performance, and termination of the Agreement or any document related to it, including any additional agreements, annexes, and disclaimers related to the Agreement, as well as in the process of amending, creating, managing and enforcement of any Loan collateral, and the Bank's expenses under Article 8.03 of the Agreement.

Cases of violation of obligations are regulated by Article 10 of the Agreement.

The Agreement and its drawing up, interpretation, and validity shall be regulated according to international public law. Any dispute, disagreement, contradiction or claim (hereinafter collectively referred to as "Dispute") arising in connection with the existence, validity, interpretation, implementation, or termination of the Agreement shall be, insofar as it is possible, be solved amicably between the Borrower and the Bank, through consultations and negotiations. If a dispute cannot be resolved amicably by the Borrower and the Bank within 60 days after either party notifies of the dispute, such dispute shall be resolved by a final and binding resolution of an arbitration court made according to the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) effective as of the Agreement date. The number of arbiters shall be three. The arbitration language shall be English. Arbitration hearings shall be held in The Hague, the Netherlands. Unless agreed otherwise, all documents shall be submitted and all hearings held within 6 months after the panel of arbiters ("Arbitration Court") is formed. The Arbitration Court shall make a ruling within 60 days after the final documents have been provided. Any final ruling of the Arbitration Court shall be binding starting from the day of its passing, and the parties hereby renounce any rights to appeal the justice and/or subject matter of the case in any court. UNCITRAL Arbitration Rules notwithstanding, the Arbitration Court shall not pass or provide any provisional measures or legal remedies before the final ruling is made, and the Borrower shall not request any judicial body to apply any provisional measures or legal remedies against the Bank before the final ruling is made. The Borrower shall implement and observe such ruling on its territory, without delay. If the Borrower does not observe its above obligation within 3 months after the resolution is passed, then, insofar as the Borrower can, under any jurisdiction, demand immunity for themselves or their assets against being brought into court, executive actions, seizure, or other legal action, the Borrower hereby renounces such immunity and gives final consent to not demand such immunity, in full, as permitted by laws of such jurisdiction (Article 11 of the Law).
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