JPMorgan Seeks to Dismiss Lawsuit Against Russia’s VTB Bank

JPMorgan Chase, the largest bank in the United States, has requested a U.S. judge in Manhattan to dismiss its lawsuit against Russia’s VTB Bank concerning a $439.5 million account frozen following Russia’s invasion of Ukraine.

JPMorgan originally filed the lawsuit in April 2024 after VTB, Russia’s second-largest state-owned bank, initiated legal action in Russia to recover the frozen funds.

Sanctions and Legal Complications:

JPMorgan argued that U.S. sanctions prevented it from releasing the funds and that VTB had previously agreed to resolve any disputes in a Manhattan court rather than Russia. However, VTB later obtained an injunction from a Russian court, compelling JPMorgan to drop its lawsuit in the U.S.

JPMorgan contends that it was coerced into requesting the dismissal of the Manhattan lawsuit due to the uncertain risks it faced in Russia if it failed to comply with the Russian court’s injunction.

Judicial Proceedings and Financial Implications:

Both JPMorgan and VTB have sought to dismiss the lawsuit, but they have not been able to agree on the language for a joint dismissal order. U.S. District Judge Lorna Schofield in Manhattan will review the proposals from both parties.

VTB was added to the U.S. Department of the Treasury’s sanctions list in February 2022 as part of the reply to Russia’s invasion of Ukraine. The sanctions have complicated the legal and financial interactions between the two banks, with some of JPMorgan’s assets in Russia being frozen as part of the ongoing dispute.

Fines and Asset Freezes:

On August 6, 2024, Judge Schofield fined VTB $500,000 for failing to comply with an order to seek a stay of the Russian case. In its quarterly report on August 2, 2024, JPMorgan stated that it faces claims and asset freezes in Russia that exceed the available assets it holds in the country. The bank also warned that additional asset seizures in Russia remain a possibility.