Moscow Arbitration Court takes up CBR lawsuit against Euroclear, preliminary hearing on Jan 16

MOSCOW. Dec 17 (Interfax) - The Central Bank of Russia's lawsuit application against Euroclear Bank S.A./N.V. has been taken up, the press service of the Moscow Arbitration Court told Interfax.

The preliminary court hearing is scheduled for January 16 at 10:00 a.m. Moscow time.

The lawsuit is related to damages inflicted on the Central Bank of Russia through "the unlawful actions of Euroclear," as well as the officially announced plans of the European Commission to indefinitely freeze the Central Bank's funds and plans to use the assets of the Russian regulator for transfer to third parties, the CBR previously said.

The Central Bank of Russia's lawsuit against Euroclear amounts to 18.2 trillion rubles. This corresponds to 195.5 billion euros or $229 billion at the official exchange rate on December 12, when the Central Bank announced it was filing the lawsuit.

The CBR previously said that the damage is comprised of the sum of blocked funds and the value of blocked securities belonging to the regulator, as well as lost gains.

The procedure for executing the court ruling against Euroclear's assets, including those located in foreign jurisdictions (both in friendly and unfriendly countries), will be determined after the court decision enters into legal force, the Central Bank said.

The Central Bank also said that it is considering the possibility of protecting its interests in international courts and arbitrations, with subsequent enforcement of the acts of such courts in UN member states.

Meanwhile, Fitch Ratings has placed Euroclear Bank SA/NV's and Euroclear Holding SA/NV's (EH) Long-Term Issuer Default Ratings (IDR) of 'AA' on Rating Watch Negative (RWN) in view of view of potentially increased liquidity and legal risks for the depositary.

Fitch will aim to resolve the RWN once it has obtained sufficient clarity and detail on the policy-making process and the format in which the Central Bank of Russia's funds would be used, the agency said in a press release.

Fitch's base case remains that, if the EC proceeds with plans for a reparations loan for Kiev using Central Bank money, then comprehensive legal and liquidity protections will be provided to Euroclear Bank as part of the plans.