The Russian government is gearing up for a potential court battle with Ukraine after Kiev failed to repay a $3 billion bond debt, according to official statements from Russia’s prime minister.

Speaking at a meeting with his deputy prime ministers on Monday, Dmitry Medvedev said that Ukraine failed to repay the debt by a Dec. 20 deadline. While Ukraine can still repay the debt without any penalties in the next 10 days, there’s been no indication the nation plans do so.

Medvedev told his cabinet that the Russian government “must hire lawyers and start the procedure to make Ukraine pay everything, including fines,” adding that Ukraine’s failure to pay “amounts to manipulation and violation of its international commitments.”

Relations between Russia and Ukraine have been deteriorating in recent months, fueled in large part by Russia annexing the Ukrainian territory of Crimea in February 2014 amid the Ukrainian revolution. The European Union issued a host of sanctions against Russia in the wake of the Crimean crisis, and announced Monday those sanctions would be extended through July 2016.

While it’s not a member of the European Union, the Ukraine has signed an economic agreement with the group. Speaking to his cabinet, Medvedev said that Ukraine implementing that pact “impinges on our interests and creates risk to our economic security.” Medvedev said he had signed a decree to enact “reciprocal economic measures” against the Ukraine beginning January 1, when the Ukraine’s revised economic agreement with the European Union goes into effect.

Bloomberg reported that Ukraine’s former president, Viktor Yanukovych, sold the debt to Russia in December 2013, weeks before Yanukovych was ousted. Ukraine’s new leader, Petro Poroshenko, has called that payment a bribe Russian President Vladimir Putin used to reward Yanukovych for shying away from closer trade ties with the European Union, which helped ignite the revolution.

The conflict has wreaked havoc on Ukraine’s bank accounts, and the International Monetary Fund (IMF) loaned the country $17 billion in April 2014 to help the nation reform its economy.

Bloomberg reported the Ukraine had to restructure billions of dollars in debt to obtain the IMF money, but Russia refused to participate and countered with its own proposed payment plan.

Ukraine’s finance minister, Natalie Jaresko, told Bloomberg that the decision to halt bond payments to Russia was made to remain compliant with IMF requirements, and that paying Russia “would have breached the contractual obligations that we have to our other creditors.”

Jaresko told Bloomberg she remained hopeful that an out-of-court settlement could be reached.