Russian court freezes €463 million in UniCredit assets amid sanction dispute

A Russian court has frozen assets belonging to UniCredit Bank in Russia valued at €463 million following a lawsuit filed by RusKhimAlliance, one of the operators involved in the construction of a gas processing complex. The assets were seized in connection with the bank's refusal to breach European sanctions.

The gas processing complex in question, located in Ust-Luga, is a joint venture between Gazprom and RusGazDobycha. RusKhimAlliance’s lawsuit revolves around the suspension of work on this gas project, a move that has been covered by Russian media outlets.

The dispute erupted in August 2023 when RusKhimAlliance went to court demanding that UniCredit pay out banking guarantees linked to a contract with the German engineering firm Linde. In July 2021, Linde had signed a contract with RusKhimAlliance for the design, supply, and construction of the gas processing plant in Ust-Luga. However, Linde halted its operations a year later due to EU sanctions.

The bank guarantees were not honoured by various banks involved as doing so would violate European sanctions. The core amount in the UniCredit lawsuit amounts to €444 million for banking guarantees.

RusKhimAlliance has also filed claims exceeding $1 billion in the Arbitration Court of St. Petersburg and the Leningrad region against Deutsche Bank, Commerzbank AG, UniCredit Bank AG, Bayerische Landesbank, and Landesbank Baden-Wurttemberg.

In a related precedent, a Russian appellate court last October imposed security measures on the assets of the Russian branch of Switzerland's Credit Suisse, deciding to freeze its funds amounting to $20.9 million.

  UniCredit, Russia