JPMorgan Chase sues Russia’s VTB Bank over effort to unfreeze assets

By Thomson Reuters Apr 18, 2024 | 10:55 AM

By Jonathan Stempel

NEW YORK (Reuters) – JPMorgan Chase sued Russia’s state-owned VTB Bank on Thursday to halt its efforts to recover $439.5 million from an account that was blocked after Russia invaded Ukraine and VTB was hit with sanctions.

In a complaint filed in Manhattan federal court, JPMorgan said VTB filed a lawsuit on Wednesday in Russia to recover the money in “blatant breach” of its agreement to have disputes addressed in New York.

The largest U.S. bank said American law prohibits it from releasing the $439.5 million, and VTB, Russia’s second-largest bank, will try to seize its assets abroad if it prevails in the Russia lawsuit.

“Thus, JPMorgan is immediately facing a certain Russian judgment exposing its assets to seizure, without timely or assured recourse, simply because it is abiding, as it must, with U.S. law,” JPMorgan’s lawyers said.

VTB did not immediately respond to emailed requests for comment.

The dispute adds to pressures facing VTB, which was added to the U.S. Department of the Treasury’s sanctions list in February 2022 following Russia’s invasion of Ukraine.

In February, U.S. prosecutors charged VTB Chief Executive Andrey Kostin with criminal sanctions violations related to two yachts he owned, and a luxury home in Aspen, Colorado that he sold.

Kostin had been under U.S. sanctions since 2018.

JPMorgan said VTB opened its correspondent account in 2008 to process U.S. dollar transactions through the American financial system. It is seeking an injunction barring VTB’s lawsuit, calling it necessary to avert “certain and irreparable harm,” and requiring that VTB honor its account agreement.

VTB sued JPMorgan in the Arbitrazh court of the city of Saint-Petersburg and Leningrad region after sending letters in February and March demanding the return of the blocked funds, court records show.

The case is JPMorgan Chase Bank NA v VTB Bank PJSC, U.S. District Court, Southern District of New York, No. 24-02924.

(Reporting by Jonathan Stempel in New York; Editing by Will Dunham)