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Gazprom subsidiary ordered to stop Russian lawsuit against UniCredit

Tue, 23rd Apr 2024 13:26

LONDON, April 23 (Reuters) - A subsidiary of Russia's Gazprom was on Tuesday ordered by the UK's Supreme Court to stop suing Italian bank UniCredit in Russia over an aborted gas project.

RusKhimAlyans launched multiple lawsuits in the Russian courts after Russia's invasion of Ukraine and subsequent Western sanctions halted work on a liquefied natural gas (LNG) plant at the Baltic port of Ust-Luga in 2022.

The company, which is 50% owned by Gazprom, sued UniCredit for around 450 million euros ($480 million) in August 2023 after the Italian bank refused to pay bank guarantees linked to the project, citing Western sanctions.

UniCredit obtained an anti-suit injunction in London, preventing RusKhimAlyans from pursuing its case in Russia, on the grounds the parties' contract said they would take any disputes to arbitration in France.

RusKhimAlyans tried to overturn that decision at the UK's Supreme Court last week, but its appeal was dismissed on Tuesday.

RusKhimAlyans and UniCredit both declined to comment.

Last week, Reuters reported that the European Central Bank was poised to order UniCredit to cut back its business with Russia, as European regulators increase the pressure on its lenders.

Leading governance adviser Glass Lewis also said earlier this month UniCredit's ongoing presence in Russia exposed the bank to reputational risks.

Lawyers representing UniCredit, in court filings for last week's hearing, said the lender faced "direct commercial consequences" if RusKhimAlyans' Russian case continued and could be enforced against "UniCredit's exposed assets in Russia".

The case is the latest in a series of lawsuits after German industrial gases company Linde's decision in May 2022 to halt work on the LNG plant after it was advised the export of LNG would breach European Union sanctions.

RusKhimAlyans had signed a deal with Linde in 2021 for the construction of the gas plant, with UniCredit, Deutsche Bank and Commerzbank providing guarantees.

Deutsche Bank and Commerzbank have also obtained orders from the English courts to try and prevent RusKhimAlyans from suing them in Russia.

Other Western institutions have also been trying to stop Russian litigation via the London courts. Among them, Barclays last week was granted an extension of an interim injunction obtained against Russian lender Sovcombank. (Reporting by Sam Tobin; Additional reporting by Vladimir Soldatkin in Moscow; Editing by William James, Sachin Ravikumar and Barbara Lewis)

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