UKRAINE and Russia have not just been military foes in recent years, but legal ones too. In 2015 Ukraine reneged on a $3bn bond repayment to Russia. In response the Law Debenture Trust Corporation, which represents Russian creditors, sued Ukraine in London. Earlier this year a court granted the trustee’s request for a speedy judgment without a full trial. But on September 14th, in a surprise twist, the appeals court overturned that decision. An English court will have to decide whether Ukraine’s defence, that Russia forced it into the debt by acting illegally, holds water. It is the first time a domestic court will effectively adjudicate on a dispute between two sovereign states.

The loans in question were structured as Eurobonds issued by Ukraine, the terms of which were governed by English law, and which matured in 2015. Although they were freely tradable on the Irish stock exchange, in practice Russia held all the bonds. The trustee says that it merely wants to enforce Ukraine’s contractual obligations. But Ukraine argues that Russia acted to deter Viktor Yanukovych, the then president, from entering into an agreement with the European Union in 2013, making Russia its funder of last resort. Russia’s annexation of Crimea in early 2014 and the ensuing war in eastern Ukraine crippled its ability to repay. The country eventually sought a bail-out from the IMF.

Ukraine has financial and political reasons to repudiate the debt. “Financially, we are not ready,” says Olena Zerkal, the deputy foreign minister of Ukraine. An estimated $3.2bn in foreign debt falls due by the end of the year. Moreover, if Ukraine loses the case, investors could start to doubt the country’s creditworthiness only a year after its return to capital markets. Politics plays a role, too. Orysia Lutsevych of Chatham House, a think-tank, reckons it would be “political suicide to pay back an internally recognised aggressor”, particularly with parliamentary and presidential elections due next year.

Ukraine sees the latest twist in the dispute as a long-awaited chance to hold Russia to account. It has filed various complaints against Russia at the International Court of Justice (ICJ), the European Court of Human Rights (ECHR), and even the UN Convention on the Law of the Sea (for exploiting maritime resources). So far Russia has evaded these. The ICJ’s consensual set-up means Russia must co-operate before a full trial can take place; in 2015 Russia’s parliament allowed ECHR decisions to be overruled. Alex Gerbi of Quinn Emanuel, a law firm representing Ukraine, welcomes the opportunity for a “truly independent, transparent and public court” to decide whether Russian conduct amounted to a breach of international law.

Ms Zerkal says just being able to present evidence of Russian aggression at the court will be a “big victory”. For its part, Russia has no plans to back down. Its finance minister, Anton Siluanov, has already said Russia plans to appeal the ruling in Britain’s Supreme Court in the coming weeks. The legal battle rumbles on.