The Russian bank VTB (60.9% of its ordinary shares are owned by the state) reached a decision in the arbitration court in St. Petersburg and the Leningrad region, according to which its British subsidiary, VTB Capital PLC, must pay 22,029,618.48 euros.
According to the court, an agreement was concluded between the bank and the company on 04/06/2006, under which the parties agreed to carry out mutual settlements for urgent transactions. However, in spring 2022, VTB capital PLC failed to fulfill its obligation to pay 2 million euros.
At the same time, the British company did not deny the existence of the debt, but refused to fulfil obligations due to the implementation of anti-Russian sanctions. After disputes, VTB appealed to the Russian Arbitration Court.
The court in St. Petersburg clarified that the sanctions create discriminatory conditions for VTB to participate in arbitration proceedings using English law, as they prevent VTB from hiring foreign law firms to represent its interests in arbitration. In fact, the sanctions prohibit any free cooperation between VTB and foreign law firms, and prevent VTB receiving payments from these firms.
The decision of the court, published on September 9, relates to the recovery of debt from VTB Capital PLC in favor of VTB Bank in the amount of 22,029,618 euros and 200,000 rubles for state duty payment.
After being sanctioned, VTB Capital, which specializes in investment services, was unable to find another bank to open accounts or repay its debts. At the end of 2022, it came under external management by the specialized company Teneo.
