JPMorgan Chase CEO and Chairman Jamie Dimon gestures as he speaks during the U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street firms, on Capitol Hill in Washington, D.C., on Dec. 6, 2023.Evelyn Hockstein | Reuters
A Russian court sided with state-run lender VTB Bank in its efforts to recoup $439.5 million from JPMorgan Chase that the American lender froze in U.S. accounts after the Ukraine invasion.
The court ordered the seizure of funds in JPMorgan's Russian accounts and “movable and immovable property,” including the bank's stake in a Russian subsidiary, according to a court order published Wednesday.
The order came after VTB filed a suit last week in a St. Petersburg arbitration court, seeking to be made whole for funds frozen in the U.S., and asking for relief because JPMorgan has said it plans to exit Russia.
The next hearing in the Russian case is July 17.
JPMorgan declined to comment. VTB did not immediately respond to CNBC's request for comment.
The order was the latest example of American banks getting caught between the demands of Western sanctions regimes and overseas interests. JPMorgan is the biggest U.S. bank by assets and run by veteran CEO Jamie Dimon.
Two years after Russia invaded Ukraine, the Biden administration has mounted an unprecedented set of sanctions, oil price caps and trade restrictions designed to weaken Moscow's military machine.
On Wednesday, President Joe Biden signed into law a sweeping foreign aid bill that includes new powers for U.S. officials to locate and seize Russian assets in the U.S. It also boosted an ongoing American effort to convince European allies to release Russian state assets to assist Ukraine.
In its own lawsuit against VTB last week in the Southern District of New York, JPMorgan sought to block VTB's effort, noting that U.S. law prohibits the bank from releasing VTB's $439.5 million.
This leaves JPMorgan exposed to a nearly half-billion-dollar loss, for abiding by U.S. sanctions.
The American bank, seeking to block VTB's effort, said the Russian company broke its contractual promise to seek relief in American courts, instead finding a friendlier venue in Russia.
JPMorgan said Russian courts have enabled similar efforts by Russian lenders against American or European banks at least a half dozen other times.
JPMorgan said it faced “certain and irreparable harm” from VTB's efforts.
Don’t miss these exclusives from CNBC PRO
- Here are Thursday's biggest analyst calls: Nvidia, Meta, Tesla, IBM, UPS, Five Below, Amazon, TJX Companies & more
- Here's where to invest $1 million right now, according to the pros
- Forget Nvidia: Morgan Stanley says Intel's much-hyped AI chip will boost 3 global stocks
- These 5 stocks will power the AI revolution as data centers spread and electricity demand doubles, says Bank of America
- Earnings playbook: Your guide to trading a huge week of reports, including Meta Platforms
-
AI chip boom fuels MediaTek’s 40% rally, beating Qualcomm and peers
-
Singtel is next S’pore stock to be traded on Thailand bourse under depository receipt linkage scheme
-
Chinese Swimming Club renews lease of Amber Road site for another 30 years
-
Cyber Monday forecast boosted after record online holiday sales
-
WealthBT Podcast: Powering up philanthropy for climate goals
-
US stocks pull back after weeks of gains
-
Former Binance CEO Zhao Changpeng must stay in US for now, judge says
-
Sports Illustrated scrubs AI-generated content after being called out for using deep fakes
-
Climate finance: UK-based standard setter VCMI’s introduction of flexibility to carbon credits market could unleash demand, much-needed investment
-
Fast-fashion giant Shein could be next blockbuster IPO after filing to go public: report
-
New York's cannabis board votes to settle lawsuits that have stalled legal dispensaries
-
CK Hutchison-backed HutchMed eyes global expansion after FDA approval for novel cancer drug
-
Cyber Monday sales set to reach $12.4 billion thanks to deal-hunters
-
Texas' new power grid problem