GTLK Europe and GTLK Europe Capital are subject of Ireland’s biggest ever liquidation
It comes before a planned hearing in Moscow today as JSC seeks to pursue injunction proceedings there.
JSC claims it is owed €2.3bn from the two Irish companies, GTLK Europe and GTLK Europe Capital. It initiated proceedings in Russia attempting to prevent the liquidators of GTLK Europe from retaining control over 37 aircraft.
In 2023, the High Court ordered that GTLK Europe and GTLK Europe Capital be wound up.
The companies were liquidated on foot of an application from their creditors, who were owed close to $180m.
The companies’ activities were hit by sanctions imposed on Russian entities and individuals following the invasion of Ukraine. The firms are part of Russian joint stock company GTLK, which is wholly owned by the Russian government through its ministry of transport and ministry of finance.
The Irish firms controlled assets including about 70 jets
The largest unsecured creditor of GTLK Capital, and therefore the group, is its bondholders. The aggregate outstanding principal amount of bonds issued by the companies is $3.25bn.
The two insolvent Irish firms controlled assets including about 70 jets and 19 sea-going vessels valued at about €4bn. It is the biggest ever liquidation in Ireland.
In late 2023, the High Court declared void pledge agreements purportedly made by GTLK Europe in favour of JSC in respect of 37 aircraft. The court concluded that the Irish courts had the jurisdiction to determine their validity.
After failing in attempts in Ireland to appeal against that order, JSC subsequently pursued five sets of proceedings in Russia, where it relies on the pledge agreements being valid and disputes the decisions of the Irish courts.
The joint liquidators have not participated in those proceedings.
The Arbitrazh Court of Yamalo-Nenets Autonomous District made an order that forbade the joint liquidators of GTLK Europe from initiating or continuing any legal proceedings related to the alleged pledge agreements, any action to enforce the pledge agreements, or ownership of the disputed aircraft. It imposed a fine of about €850m for non-compliance.
The joint liquidators of GTLK Europe, Damien Murran and Julian Moroney, of Teneo’s Dublin office, sought orders from the High Court restraining JSC from continuing the mandatory injunction proceedings in Russia, or from relying on or taking steps to enforce arbitration awards and requiring it to take steps to discontinue the Russian proceedings.
The application was heard in July, with Mr Justice Rory Mulcahy noting that he did have jurisdiction to make the orders sought by the joint liquidator.
In his written judgment issued this week, Mr Justice Mulcahy confirmed that he was granting the orders sought, but only against JSC, rather than including its servants, agents and all other parties having notice of any order made by the High Court.
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