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Deutsche Bank and Commerzbank confiscated €332,6M in Russia

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Jesus Carames

May 19, 2024 | 5:41 p.m.

The Arbitration Court of Saint Petersburg and the Leningrad Region this Saturday ordered the confiscation of 332,6 million euros in assets belonging to the German banks Deutsche Bank and Commerzbank, at the request of the Russian gas company Rusjimalians. This move comes against the backdrop of a legal dispute brought by Rusjimalians, a company partially owned by energy giant Gazprom.

Context and reasons for the complaint

The Rusjimalians company denounced both banking entities last year. As reported by the official agency RIA Nóvosti and reported by EFE, Rusjimalians demanded that Deutsche Bank return the payment of the bank guarantee for September 2021, which had a value of 238,1 million euros. In addition, the Russian company demanded a fine of almost half a million euros due to delays in the bank's compliance with contractual obligations.

The root of the conflict lies in the decision of the German chemical multinational Linde to suspend the construction of a gas plant in Leningrad. This suspension was a direct consequence of the outbreak of war in Ukraine, which led the multinational to stop its operations in Russia.

In the case of Commerzbank, which had also acted as Linde's guarantor, the arbitration court confiscated almost €94 million. Due to the sanctions imposed by the West after the start of the conflict in Ukraine, both banks were unable to guarantee guarantees for the energy project, which aggravated the situation and led to legal action by Rusjimalians.

Impact of sanctions and judicial response

The sanctions adopted by the West in response to the Russian invasion of Ukraine have had a significant impact on trade and financial relations between Russia and other countries. In this case, sanctions prevented Deutsche Bank and Commerzbank from fulfilling their contractual obligations, leading to Russian judicial intervention.

According to the 'Financial Times' newspaper, the Russian court also confiscated assets of the Italian bank UniCredit worth more than 462 million euros. This suggests that Rusjimalians' legal action is not limited to just German entities, but also affects other European financial institutions.

In addition to the lawsuits against the banks, Rusjimalians has filed several complaints against the multinational Linde. Two of these complaints have already been resolved in favor of the Russian company, according to the Meduza portal.

Impact and future prospects

The seizure of assets of European banks by a Russian court represents an escalation in economic and legal tensions arising from the conflict in Ukraine. This measure not only affects the financial institutions involved, but also sends a signal to other foreign companies operating in Russia about the legal and financial risks they face in the current geopolitical climate.

Rusjimalians' legal actions reflect a strategy by Russian companies to recover their investments and mitigate losses caused by sanctions and the interruption of international projects. This case could set a precedent for future legal disputes between Russian and foreign companies affected by war and sanctions.

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