- A Russian court ordered the American bank to drop the case despite ongoing US sanctions against VTB.
- The legal battle is linked to JPMorgan freezing $439.5 million of VTB’s funds following Russia’s invasion of Ukraine.
JPMorgan Chase is seeking to dismiss its lawsuit against Russia’s VTB Bank following intense pressure from a Russian court, Reuters reported. The bank, caught between US sanctions and Russia’s unpredictable legal landscape, is now asking a US judge in Manhattan to allow it to withdraw from the case, a move it describes as coerced and against its will.
The dispute between JPMorgan and VTB began after the Russian state-owned bank sued Russia to recover $439.5 million that JPMorgan had frozen following Russia’s invasion of Ukraine.
US sanctions prevented the American bank from releasing the funds, and VTB had initially agreed that any disputes would be settled in Manhattan courts. However, VTB later secured an injunction from a Russian court, mandating JPMorgan to drop its lawsuit in New York.
See Related: Russian Court Reverses Seizure Of JPMorgan’s Funds
Unresolved Issues And Ongoing Risks
Faced with the potential consequences of defying the Russian court’s order, including significant risks to its operations in Russia, JPMorgan has now asked US District Judge Lorna Schofield to dismiss the case. The bank’s request comes reluctantly, highlighting the intense legal pressures it faces in Russia.
Despite both banks seeking to dismiss the case, they have failed to agree on the language for a joint dismissal order, leaving the final decision to Judge Schofield. This legal battle underscores the complex and often contradictory pressures that international banks face when navigating sanctions and cross-border disputes.
VTB, Russia’s second-largest bank, has been on the US Department of the Treasury’s sanctions list since February 2022, a repercussion of Russia’s actions in Ukraine. The sanctions have reportedly complicated JPMorgan’s operations in Russia, where some of its assets have been frozen in connection with the ongoing dispute.
JPMorgan’s latest quarterly report reveals that the bank continues to face claims and asset freezes in Russia that exceed the value of its assets in the country, with further seizures remaining a possibility. VTB’s US-based lawyers have remained silent on the matter.
