OREANDA-NEWS. May 20, 2011. Joint Stock Company Parex banka filed an application on review of decisions passed by Courts of Appeal and Cassation instances within the procedure of monitoring. The Bank’s rights were recurrently violated when a Federal Arbitration Judge of Moscow district stayed enforcement of decision passed by instance of appeal. The decision voided an unlawful decision of Moscow Arbitration Court on conceding “Univermag Moskva” bankrupt and initiation of tender procedure. Such a decision resulted in forbidding the Bank as the largest creditor to participate in the insolvency process fully, thus providing ungrounded advantages for a group of creditors which are trying to attain announcing of “Univermag Moskva” bankrupt and selling the company’s assets in a non-transparent manner, reported the press-centre of Parex Banka.

“This is not the first violation of foreign investors’ rights within the project of “Univermag Moskva” and it might create a dangerous precedent. Discrimination of foreign investors by failing to provide them with equal rules of the game not only harms cross-border relations between Latvia and Russia, it also serves as a negative signal for other foreign investors. We are surprised about such a bald and express violation of foreign investors’ rights from the part of court institutions in a country which actively attempts to join World Trade Organization,” emphasizes Christopher Gwilliam, Chairman of Parex banka’s Board of Directors.

In order to preclude further judicial discrimination of the Bank as a resident of the Republic of Latvia from the part of Russia’s court institutions and to solve the extraordinary and inacceptable situation, Parex banka has turned to the Ministry of Foreign Affairs, Ministry of Justice and Ministry of Finance of the Republic of Latvia with an official request for support.

Ministry of Foreign Affairs has already initiated review of the issue in Intergovernmental Committee of the Republic of Latvia – and Russian Federation. Turning to the European Commission in Brussels and at its delegation in Moscow is planned in the nearest time.

Good relations with the Russian Federation in the shape of judicial cooperation is very important for Latvia therefore we are glad for the understanding demonstrated by Latvia’s government and for its support in solving the situation,” points out Christopher Gwilliam.

Parex banka had already encountered a discriminatory attitude and substantial violation of foreign investors’ rights in the case of “Univermag Moskva” both – from the part of individual court institutions of the Russian Federation as well as from the part of the present insolvency administrator who expressly is defending the interests of a small group of creditors. Parex banka has reasonable grounds to believe that the principle of independency of courts is not being observed which requires a court to ensure a fair course of processes and observance of parties’ rights and the Bank most probably cannot rely on fair, lawful, objective and independent conduct of court instances of the Russian Federation.

“Actually, this deliberately and unreasonably deferred insolvency process of “Univermag Moskva” has thrown us back into 2010 when vitally important decisions had to be made on further fate of the enterprise. “Univermag Moskva” could have been in business and worked on restoring its insolvency for all of this time, thus finding a way to reimburse the shopping centre’s liabilities,” says Christopher Gwilliam.

Majority shareholders of Parex banka are the State of Latvia which is represented by Privatization Agency and the European Bank for Reconstruction and Development (EBRD).