Russian energy company RusChemAlliance (RCA) has brought legal proceedings against five European banks that stopped financing the construction of a gas project in Russia.
Russia has been subject to numerous Western sanctions following the country’s invasion of Ukraine in early 2022.
The EU has issued a ban on the purchase, import and transfer of liquified petroleum gas, crude oil and refined petroleum products from Russia.
Filed with St. Petersburg’s Arbitration Court on 16 September, the lawsuits were taken out against pan-European bank UniCredit, and German lenders Deutsche Bank, Commerzbank, Bayerische Landesbank and Landesbank BadenWurttemberg.
RCA and UniCredit have been locked in multiple legal battles.
A case summary from the UK Supreme Court shows that under contracts between RCA and UniCredit, RCA was obliged to pay a third-party contractor approximately €10bn ($11bn) for the construction of gas processing plants.
UniCredit issued bonds to RCA with a value of approximately €420m (467m).
Following the withdrawal of the contractor, RCA has been seeking the recovery of €488m ($499m) from UniCredit under the bonds.
RCA’s Russian proceedings were discontinued by the UK Court of Appeal, and the company has since appealed to the Supreme Court, with the verdict to be announced on 18 September.
RCA is also in the process of suing other European banks after German industrial gases company Linde stopped working on a liquefied natural gas (LNG) plant at the Baltic port of Ust-Luga in 2022.
According to reports, RCA stated that EU sanctions only prohibit the supply of equipment for liquefying natural gas, but not equipment for gas processing and the construction of a gas processing plant, which Linde was supplying.
The Arbitration Court of St. Petersburg and the Leningrad Region fully satisfied the claim of RCA against Linde for a total amount of approximately 113bn Russian rubles ($1.2bn). Linde’s assets were frozen in Russia.
Despite the ongoing international sanctions, Russia’s oil and gas industry has continued to do business in various parts of the world. In July 2023, Russian crude oil accounted for 44% of India’s overall imports, surpassing China.
And in September, a company part-owned by sanctioned Russian oligarchs obtained a 14.87% stake in one of the UK’s largest oil producers.
