There is an “enormous risk” that assets of two Russian-owed aircraft and ship lessors will be dissipated if liquidators appointed to them have to apply to the Irish Central Bank for sanction derogations on an “asset-by-asset basis”, the High Court has been told.
The joint liquidators, who were appointed over Dublin-based GTLK Europe Capital DAC and GTLK Europe DAC in May, are asking the court to declare that the liquidators, rather than any Russian entities, have effective control of the companies and their assets.
The two companies form part of a group that had assets of about $4.5 billion (€4.11 billion), making them what are thought to be the largest winding-ups in the history of the State. The Russian parent of the two firms is the subject of international sanctions that have been imposed on Russia since the invasion of Ukraine last year.
James Doherty SC said every step taken by his clients – liquidators Damien Murran and Julian Moroney of Teneo Restructuring Ireland – has required an expenditure of funds, which cannot occur without applying to the Central Bank.
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The current process of applying to the regulator for sanction derogations on a “transaction by transaction” basis is “extraordinarily time-consuming”, he said.
There is an “urgent requirement” for the liquidators to be able to exercise appropriate control over the assets held in various subsidiaries, including 70 aircraft and 19 vessels, for the benefit of non-Russian creditors and bondholders, he said. His clients have “real concerns” about the risk of assets being dissipated, he added.
The court heard the Irish GTLK entities were only covered by the freezing regulation as they had been presumed to be controlled by their sanction-hit parent. However, Mr Doherty said, their winding-ups under the 2014 Companies Act should have legally severed this presumed control.
John Breslin SC said the European Commission was clear the Central Bank, his client, was the body tasked with factually analysing the companies’ situation in relation to sanctions. However, the regulator would be grateful to the court for “valuable” legal clarity on the liquidation’s effects on the control of the firm and its assets.
Mr Justice Michael Quinn said he would rule on the issue on Tuesday.
The two Irish-based entities were wound up in late May by order of the High Court following a petition from four creditors who said they were owed more than $178 million (€162 million).
