Russian court seizes 463 million euros of UniCredit assets

Man walks past branch office of Unicredit bank in Moscow

MOSCOW (Reuters) -A Russian court has ordered that UniCredit's assets, accounts and property, as well as shares in two subsidiaries, be seized as part of a lawsuit over an aborted gas project involving the Italian bank, court documents showed.

The ruling by a St Petersburg arbitration court covers 462.7 million euros ($503 million) in securities, real estate and accounts belonging to UniCredit as well as 100% of shares in UniCredit Leasing and UniCredit Garant.

UniCredit Leasing and UniCredit Garant are subsidiaries of AO UniCredit Bank, the Italian group's Russian arm, which had 8.67 billion euros in assets at the end of 2023, down from 10.16 billion a year earlier.

UniCredit said in a statement that the seizure affected only a fraction of their Russian unit's assets, not the entire subsidiary. "The rest of the details we are currently reviewing," it said.

After Austria's Raiffeisen Bank International, UniCredit is Europe's biggest lender in Russia and faces mounting pressure from euro zone banking supervisors to reduce its business there.

Highlighting the risks of doing business in Russia following the imposition of Western sanctions over the Ukraine war, UniCredit said in its 2023 report that it was being sued in a St Petersburg court by a Russian energy firm over guarantee claims totalling 444 million euros.

UniCredit did not name the company in the annual report.

The Italian bank was one of the guarantor lenders under a contract for the construction of a gas processing plant in Russia with Germany's Linde, which was terminated due to Western sanctions.

When the project was halted, St Petersburg-based RusChemAlliance, a joint-venture that is 50% owned by Russian gas giant Gazprom, had made a 2 billion euro advance payment on the 10 billion euro contract, according to Britain's Supreme Court website.

UniCredit had issued part of the guarantee package in favour of RusChem on behalf of Linde.

Under the package, UniCredit had issued seven on-demand bonds in favour of RusChem. The bonds' contracts stated they fell under English law, and that any dispute would be heard by Paris' arbitration court.

In April the UK's Supreme Court told RusChem to stop suing UniCredit in Russia over the aborted gas project. But the Russian court rejected UniCredit's jurisdictional defence and scheduled a hearing for the second quarter.

RusChem had turned to the St Petersburg court after tapping the guarantee scheme, requesting payment claims which UniCredit could not honour due to the Western sanctions.

In suing UniCredit, RusChem sought to recover 448 million under the bonds, a sum that included nearly 444 million euros from the 2021 guarantee package, plus 4.5 million euros in penalties.

RusChem has filed lawsuits in St Petersburg also against Deutsche Bank and Commerzbank seeking compensation in relation to the aborted Linde plant, Russian court documents showed in July. ($1 = 0.9194 euros)

(Writing by Mark Trevelyan; Additional reporting by Valentina Za in Milan; Editing by Louise Heavens, Susan Fenton, Leslie Adler and Cynthia Osterman)