Property confiscated by Ukraine, Russian bank sues

Sberbank headquarters in Saint Petersburg, Russia – Photo: REUTERS

According to Reuters news agency, Ukraine’s parliament has approved a decree of President Volodymyr Zelensky, authorizing the coercive seizure of assets of the International Reserve Bank owned by Sberbank.

The decree also allows Ukraine to seize a subsidiary of Russia’s Prominvestbank.

In the latest statement, Sberbank – Russia’s largest financial institution – announced that it had filed a lawsuit with the investment arbitration court with the decision of Ukraine, demanding compensation for damages.

Sberbank said it will conduct the proceedings on the basis of an agreement between the Russian government and the Ukrainian cabinet on the promotion and protection of bilateral investment, dated November 27, 1998.

According to the law page Law360The text of the agreement, which is hosted on the United Nations (UN) website, says Russia and Ukraine have six months to resolve the dispute through negotiation, before the case can be submitted to arbitration.

At that time, “a court of competent jurisdiction, or an arbitral tribunal of a party to the agreement” can take over the case. Disputes may also be resolved by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) or by a special arbitral tribunal established under the provisions of the United Nations International Trade Law Commission.

This is not the first time Russia has had assets confiscated since launching a “special military operation” in Ukraine. Last month, Germany announced it had taken control of Gazprom Germania, a unit of Russian state energy company Gazprom.

Germany will control Gazprom Germania at least until September 30.