The National Bank of Cuba (BNC) says it respects “legitimate debts” but rejects the claims of the CRF (Cornerstone Total Return Fund)
14ymedio, Havana, 22 November 2024 — In contrast to the arrogance and speed of its reactions in the preliminary stages of the trial, the National Bank of Cuba (BNC) has taken several days to reflect before commenting on the rejection of its appeal before the Court of Appeal in London in its litigation against the CRF (Cornerstone Total Return Fund) investment fund, which is demanding payment of some 78 million dollars in sovereign debt derived from loans taken out in the 1980s. Its tone was also calm, when it announced this Friday that it is “analyzing its defense position for the next steps to follow (and) ratifies, once again, its firm will for dialogue and unwavering respect for debts that have been legitimately contracted.”
“From the very beginning of the process we have maintained that said fund has no relationship with the institution’s financial instruments and, therefore, has not been and is not a creditor of the National Bank of Cuba,” it said in a statement on its social networks.
The official position of the BNC had been revealed hours earlier by the regime’s official spokesman, Humberto López, who, at the bottom of a Facebook post, and with words not far removed from those used by the financial institution, declared that Cuba owes nothing “to the vulture fund.”
As in the official statement, López downplayed the London court’s dismissal: “What has happened now is nothing more than the determination of jurisdiction. In other words, the appeal determines whether or not a new process will be opened to know the merits of the matter,” said the spokesperson, who also stated that the Cuban State “already won” in April 2023.
As in the official statement, Lopez downplayed the London court’s dismissal
In reality, the court ruling on that date only determined that the State was not the guarantor of the debt, but, as López admits, the BNC “remains within” the dispute, “with much less harmful implications” for Cuba and “different rules.”
López’s half-hearted statements were not overlooked by users, who reminded him that the legal battle continues and “they have not won anything.” “They only changed the name of the debtor. The underlying problem is still there. Otherwise they would never have appealed the sentence. They have put the noose around their necks because, by denying them the appeal, they have done nothing but legitimize the debt,” responded the lawyer Manuel Viera.
The National Bank of Cuba, however, does not consider this to be the case, and the decision of the Court of Appeal is only an affirmation that the entity “would remain in the process.”
Jeet Gordhandas, a representative of the investment fund registered in the Cayman Islands in 2009, said on Tuesday that “this unanimous decision is a fundamental milestone in our efforts to achieve justice and enforce contractual rights.” CRF says it holds a portfolio worth a total of about 1.2 billion euros, although it is not now claiming all of it from the island.
The investment fund also announced that it will proceed with the next phase of the trial, where it hopes to “achieve a victory,” although the BNC can appeal Tuesday’s ruling before the Supreme Court. “The facts are clear: Cuba borrowed those sums and did not comply with its payment obligations, a constant pattern in its dealings,” it said in its note.
The National Bank of Cuba argued that this transfer was not valid because Olivera did not follow the appropriate internal processes.
Last April, Judge Sara Cockerill concluded that the BNC – now dedicated to the management of the pre-1997 external debt – is the debtor of CRF. The Cuban financial institution then responded with an appeal in which it argued that Cockerill was wrong to accept the transfer to CRF of the contractual rights over the securities derived from the original loans granted by two European banks, signed on November 25, 2019 by its former director of operations, Raúl Olivera Lozano, who is now in prison in Cuba in relation to this case.
The National Bank of Cuba argued that the transfer was invalid because Olivera did not follow the proper internal procedures, which the fund disputed. It also claimed that it did not receive, in the manner required by contract, the advance notice necessary for the reassignment of the debt, which it initially contracted in 1984 with Credit Lyonnais and Istituto Banco Italiano and which it later transferred to ICBC Standard Bank (a British subsidiary of the Chinese bank ICBC), from which CRF obtained it.
During the proceedings, CRF also maintained that, even assuming that Olivera had acted without authorization when he approved the reallocation of the debt, the BNC later validated it in practice by responding to the letters from its British legal representatives.
The Cuban bank, meanwhile, said that CRF wants to use its litigation to “block Cuba in the financial markets” in order to facilitate the collection of all its unpaid debt portfolio.
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