Kyiv Economic Court of Appeals has suspended the consideration of an appeal against a ruling by Kyiv Economic Court obliging the Ukrainian government to pay over UAH 3.1 billion (about $390 million) of the debt of the UESU Corporation to the Russian Defense Ministry pending the investigation of a criminal case into the issue by the Security Service of Ukraine (SBU).

Presiding Judge Viktor Shapran announced this decision at a meeting on Monday. The court made this decision in response to a relevant request by the Cabinet of Ministers submitted on October 19.

According to the government's representative, Andriy Bogdan, the investigation department of the SBU is holding an inquiry into a criminal case into the same events. In his words, they need the information from the SBU about the status of the investigation for a comprehensive consideration of the case and Kyiv Economic Court of Appeals has to suspend the proceedings until all the circumstances are clarified.

As reported, the Russian Defense Ministry filed at Kyiv Economic Court a lawsuit against the Ukrainian government for the non-payment of UAH 3.239 billion under a criminal case on the activities of the UESU Corporation. The plaintiff also asked the court to summon the State Treasury Service of Ukraine as a third party on the side of the defendant in the case. The UESU is also a third party on the side of the defendant in the case.

The Russian ministry claims that, in the 1990s, the UESU, which was then headed by former Ukrainian Premier Yulia Tymoshenko, failed to meet its commitments in supplies for the Russian military under a 1997 agreement. The then Ukrainian Prime Minister Pavlo Lazarenko allegedly provided state guarantees that the commitments would be fulfilled.

UESU representative Oleksandr Kovalchuk said in court that Lazarenko had made promises that the UESU would meet its commitments in letters, and that they could not be legally qualified as state guarantees. Kovalchuk also said that alleged pressure from the Ukrainian government had prevented the UESU from fulfilling its commitments.

The Ukrainian government representatives also told the court there had been no state guarantees and argued that the statute of limitations made the suit invalid.

On September 19, 2012 Kyiv Economic Court partially satisfied a suit from the Russian Defense Ministry concerning a debt accumulated by Unified Energy Systems of Ukraine (UESU), ordering Ukraine to pay UAH 3.11 billion ($400 million) to Russia's defense agency.

On September 25, 2012 the Cabinet of Ministers of Ukraine filed an appeal against the ruling of the Economic Court.

On October 11, 2011, Pechersky District Court in Kyiv sentenced Tymoshenko to seven years in prison for overstepping her authority when signing 2009 gas contracts with Russia. She has served her sentence in Kachanivska Penal Colony in Kharkiv since late December 2011.

The Kyivsky District Court of Kharkiv is hearing the case of Tymoshenko, who is suspected of fraud while she was the UESU's head.

Tymoshenko is charged under five episodes in the case – organization of the appropriation of public funds in an especially large amount in 1997-1998 via illicit receiving of value added tax (VAT) (Part 3 of Article 27, Part 5 of Article 191 of the Criminal Code of Ukraine), attempt to appropriate public funds in an especially large amount in 1997-1998 via illicit receiving of VAT (Part 3 of Article 27, Part 2 of Article 15, Part 5 of Article 191 of the Criminal Code), tax evasion by the UESU Corporation (Part 3 of Article 27, Part 3 of Article 212 of the Criminal Code), non-payment of income tax (Part 3 of Article 212 of the Criminal Code), and committing a crime via official forgery (Part 3 of Article 27, Part 2 of Article 366 of the Criminal Code).

A preliminary hearing of the case was held on April 19, 2012 in the absence of Tymoshenko. Since then the court has been putting off hearings due to the fact that Tymoshenko kept refusing to attend the hearings due to her state of health.