A UK Court has rejected an attempt by Gazprombank’s Luxembourg subsidiary to force a Swiss-headquartered commodities trader to repay millions of dollars in alleged missed payments, setting the stage for future court action.

The UK High Court of Justice has dismissed Bank GPB International’s summary judgement application to secure an immediate payment on dozens of loans provided to Geneva-based Integral Petroleum.

The Luxembourg-based lender had made the counterclaim application to the High Court in the wake of a 2020 lawsuit filed by Integral.

The trader is suing Bank GPB International and claims the bank worked to harm its business by obtaining wrongful freezing orders in England and Switzerland, allegations the bank has denied.

Bank GPB International argued in the latest court action that Integral and a group of five other claimants owe it roughly US$24.5mn, and says Integral had defaulted on those loans prior to the “alleged conspiracy” taking place.

Lawyers for the bank attempted to convince the High Court that Integral and the other claimants, including Integral’s managing director and intermediary trading companies, had “no real prospect of success” in convincing a court they should not pay the debt.

Beginning in late 2017, Bank GPB International started lending to Integral in support of its trading activities in Turkmenistan, helping the company purchase commodities via intermediaries before selling them from production facilities.

Finance was provided under a wider US$35mn uncommitted loan facility. Troubles began to emerge in mid-2019 when Integral says it was hit by “significant delays” on the delivery of certain commodities, according to court documents.

“Due to the delays, a large number of Integral’s suppliers’ purchase contracts from the Turkmen state producer entities expired before the cargoes could be loaded. The producers then charged penalties for the late lifting of the cargoes, despite the delays having been caused by them,” said Integral’s managing director, Murat Seitnepesov, in evidence.

“In view of all these delays, Integral was unable to repay the bank’s financing for cargoes sourced from the relevant Turkmen state entities (maturing in September and October 2019) on time,” the court filings read.

In its case, the bank argued more than 30 of its loans to Integral had reached maturity by October that year and were due for repayment.

But according to court filings, the High Court ruled Bank GPB International had failed to show the claimants had “no defence” to make on this point, with Integral, Seitnepesov and the intermediary traders claiming a payment extension agreement had been reached orally by that September.

Correspondence from WhatsApp messages, emails and phone transcripts were all produced as  evidence before the High Court. But in her final judgement, Mrs Justice Moulder said there was outstanding information which should be considered, including further details from conversations held in-person or over the phone between Integral and Bank GPB International.

Justice Moulder ultimately suggested it will be a matter for a trial at court to decide whether Integral had defaulted on its loans.

“In my view it is clear that in August and September 2019 there were oral discussions by phone and it is likely there were discussions in person. What is lacking at this stage, and can reasonably be expected to be before the court at trial, is oral evidence from the witnesses as to what was said on those calls and at those meetings,” Moulder said in her judgement.

The dispute between the GBP and Integral began in 2020, with the trader filing a lawsuit alleging the bank wrongfully obtained a freezing order in England and Switzerland, in turn damaging the trading company’s business.

As reported by Law360, Integral’s suit also alleges Bank GPB International wrote to the claimants’ counterparties and banks inviting them to block all transactions, and also accuses the lender’s affiliates of spreading damaging information in Turkmenistan, Switzerland and potentially elsewhere.

Neither Integral or Bank GPB International were immediately available for comment.