In a dramatic legal escalation, a Russian court has authorized the seizure of funds held in JPMorgan Chase accounts within Russia, court documents revealed on Wednesday. This move stems from a lawsuit instigated by the state-owned bank VTB in its bid to reclaim funds frozen overseas.
JP Morgan Chase, in response, initiated legal action against VTB in New York last week, seeking to block the efforts to recover $439.5 million from an account frozen following Russia’s military intervention in Ukraine in 2022, which led to sanctions against VTB.
JPMorgan Chase refrained from commenting on the Russian court’s interim measures, while VTB withheld immediate comment on Wednesday, maintaining its silence on the ongoing legal dispute.
The ruling from the Arbitration Court of St Petersburg and the Leningrad Region, dated April 22, mandates the seizure of all funds within JP Morgan bank accounts in Russia, including correspondent accounts and those linked to subsidiaries. Notably, the court clarified that it did not extend the seizure to securities, property held by JP Morgan funds, or the jpmorgan.ru domain.
In a complaint lodged in federal court in Manhattan, JPMorgan criticized VTB’s efforts to retrieve the money in Russia as a “blatant breach” of their agreement to settle disputes in New York. Citing U.S. law constraints, JPMorgan asserted its inability to release the $439.5 million, warning of potential asset seizures abroad by VTB if it prevails in the Russia lawsuit.
JPMorgan highlighted VTB’s favorable prospects in Russian courts, citing at least six instances where relief was granted to Russian banks against U.S. and European banks obligated to adhere to sanctions laws.
