A Russian court sided with state-run lender VTB Bank in its efforts to recoup $439.5 million from JPMorgan Chase that the American lender froze in U.S. accounts after the Ukraine invasion.
The court ordered the seizure of funds in JPMorgan's Russian accounts and "movable and immovable property," including the bank's stake in a Russian subsidiary, according to a court order published Wednesday.
JPMorgan declined to comment. VTB didn’t immediately respond to a request to comment.
Russia has retaliated against sanctions imposed by the U.S. and its allies over the war in Ukraine by limiting the access of companies from so-called unfriendly states to the assets they hold domestically.
JPMorgan has previously warned that it faces “actual and threatened litigation in Russia seeking payments on transactions that the firm cannot make, and is contractually excused from paying, under relevant sanctions laws.” The lender said that assets it holds in that country could be seized as a result.
A St. Petersburg court ordered the freezing of funds owned by US banking giant JPMorgan Chase in Russia on Wednesday. The ruling was made in favor of the country’s second-largest lender VTB, which filed a lawsuit seeking to recover $439.5 million that is blocked abroad under US-led sanctions.
VTB sued JPMorgan and its subsidiaries in the Arbitration Court of St. Petersburg and Leningrad Region on April 17, court filings showed on Monday. The order targeted funds in JPMorgan’s Russian accounts and “movable and immovable property,” including the bank’s stake in a Russian subsidiary.
The dispute centers on $439.5 million in funds that VTB held in a JPMorgan account in the US, which were blocked by Washington as part of Ukraine-related sanctions in 2022.
The court ordered the seizure of all funds in JPMorgan bank accounts in Russia, including correspondent accounts and those opened in the name of a subsidiary.
It also revealed that VTB had requested interim steps because the respondents were “taking measures to withdraw their assets” from Russia, while the Russian lender was seeking to recover money from the US bank.
In its own lawsuit against VTB last week in the Southern District of New York, JPMorgan sought to block the Russian bank’s efforts, noting that US law prohibited the bank from releasing the $439.5 million owned by VTB.
JPMorgan is concerned that VTB will try to seize its Russian assets, Reuters reported on Wednesday, citing the US lender.
The Wall Street bank admitted to the outlet that VTB’s prospects were good, since Russian courts had granted at least six other local lenders relief against US and EU banks that were required to comply with sanctions laws.
The next hearing in the JPMorgan case is scheduled for July 17.
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