Russian Court of Cassation has put an end to the case on the claim of the Cypriot company A1 Capital Limited against the Swiss bank Credit Suisse AG for recovery of debt in the amount of more than 22 million U.S. dollars and interest for delay in fulfilment of the obligation. The plaintiff's Russian subdivisions JSC “Credit Suisse Bank (Moscow)”, LLC “Credit Suisse Securities (Moscow)” were involved as third parties. To ensure satisfaction of the plaintiff's claims, Credit Suisse AG seized 99.999995 % of the stocks of “Credit Suisse Bank (Moscow)” and 99.9999073 % of the shares of “Credit Suisse Securities (Moscow)” owned by Credit Suisse AG (Case No. A40-304601/2023).
It follows from the case materials that in April 2019 the plaintiff opened bank accounts in US dollars, euros and Russian rubles with Credit Suisse AG Bank. In March 2022, the bank stopped executing the plaintiff's orders for banking operations, closed access to the bank-client system and froze all funds in the accounts. In support of its actions, the bank pointed out that the plaintiff had been identified as a sanctioned person.
In May 2022, the plaintiff sent the bank a notice of unilateral termination of the agreement and requested that the funds be transferred to the plaintiff's accounts opened with a Russian bank.
Despite the fact that by agreement of the parties the applicable law was Swiss law, the plaintiff managed to have the case heard in a Russian court. The basis for this was the fact that the ultimate beneficiaries of A1 Capital Limited with a 100% interest are Russian citizens A.N. Kosogov and M.M. Fridman, against whom anti-Russian sanctions were imposed by Switzerland, the UK and EU countries. The bank's arguments that the plaintiff is trying to protect the interests of a foreign offshore organization, as well as to withdraw funds that did not enter the territory of Russia to an offshore zone, the court found untenable for the following reasons.
The adopted sanctions restrictions, which prevented the transfer of A1 Capital Limited's funds, in the court's opinion, contradict the fundamental principles provided for by the Russian Constitution. The civil legislation of the Russian Federation does not allow a Russian court to apply foreign sanctions legislation directed against the interests of the Russian Federation.
Since the defendant has not cited any other circumstances for refusing to fulfil its obligation to disburse funds to the plaintiff other than compliance with the Swiss sanctions, this objection of the defendant is not justiciable and cannot be taken into account. “Unfriendly” bank cannot unilaterally cease to fulfil a contract solely on the ground that its client is on the sanctions list.
Thus, the court satisfied the claims of A1 Capital Limited – as of May 16, 2022, the agreement with the bank is considered terminated, and the bank in turn had a monetary obligation to the plaintiff to pay the above amounts. To date, the bank has filed several applications to challenge the actions of bailiffs (cases No. A40-304601/2023, No. A40-305524/2023b No. A40-7087/2024 and No. A40-15084/2024).
It follows from the case materials that in April 2019 the plaintiff opened bank accounts in US dollars, euros and Russian rubles with Credit Suisse AG Bank. In March 2022, the bank stopped executing the plaintiff's orders for banking operations, closed access to the bank-client system and froze all funds in the accounts. In support of its actions, the bank pointed out that the plaintiff had been identified as a sanctioned person.
In May 2022, the plaintiff sent the bank a notice of unilateral termination of the agreement and requested that the funds be transferred to the plaintiff's accounts opened with a Russian bank.
Despite the fact that by agreement of the parties the applicable law was Swiss law, the plaintiff managed to have the case heard in a Russian court. The basis for this was the fact that the ultimate beneficiaries of A1 Capital Limited with a 100% interest are Russian citizens A.N. Kosogov and M.M. Fridman, against whom anti-Russian sanctions were imposed by Switzerland, the UK and EU countries. The bank's arguments that the plaintiff is trying to protect the interests of a foreign offshore organization, as well as to withdraw funds that did not enter the territory of Russia to an offshore zone, the court found untenable for the following reasons.
The adopted sanctions restrictions, which prevented the transfer of A1 Capital Limited's funds, in the court's opinion, contradict the fundamental principles provided for by the Russian Constitution. The civil legislation of the Russian Federation does not allow a Russian court to apply foreign sanctions legislation directed against the interests of the Russian Federation.
Since the defendant has not cited any other circumstances for refusing to fulfil its obligation to disburse funds to the plaintiff other than compliance with the Swiss sanctions, this objection of the defendant is not justiciable and cannot be taken into account. “Unfriendly” bank cannot unilaterally cease to fulfil a contract solely on the ground that its client is on the sanctions list.
Thus, the court satisfied the claims of A1 Capital Limited – as of May 16, 2022, the agreement with the bank is considered terminated, and the bank in turn had a monetary obligation to the plaintiff to pay the above amounts. To date, the bank has filed several applications to challenge the actions of bailiffs (cases No. A40-304601/2023, No. A40-305524/2023b No. A40-7087/2024 and No. A40-15084/2024).