JPMorgan Chase Aims to Dismiss NY Lawsuit Against Russia’s VTB Bank

By Jonathan Stempel

NEW YORK (Reuters) – On Friday, JPMorgan Chase sought a U.S. judge’s approval to dismiss its lawsuit against Russia’s VTB Bank regarding a frozen account worth $439.5 million, claiming that VTB "coerced" the bank into making this request.

The largest bank in the U.S. had filed the lawsuit against VTB in April after the state-owned Russian bank initiated legal proceedings in Russia to recover the frozen funds. JPMorgan stated that U.S. sanctions prevented it from releasing the money, and VTB had previously consented to resolve disputes in Manhattan rather than Russia.

However, JPMorgan later asserted that VTB secured a Russian court injunction mandating the cessation of the Manhattan lawsuit. The bank contended that its decision to request dismissal was made "against its will" due to the potential risks associated with violating the injunction in Russia.

VTB, recognized as Russia’s second-largest bank, also desires the dismissal of JPMorgan’s lawsuit, but the two financial institutions have not been able to agree on suitable wording for a joint dismissal order. U.S. District Judge Lorna Schofield in Manhattan is set to review their proposals.

Representatives for VTB in the U.S. did not immediately provide comments, nor did JPMorgan’s legal team respond to requests for remarks.

VTB was added to the U.S. Department of the Treasury’s sanctions list in February 2022 following the invasion of Ukraine. On August 6, Judge Schofield imposed a $500,000 fine on VTB for failing to comply with her directive to seek a stay in the Russian case.

JPMorgan has indicated that some of its assets in Russia have been frozen amid this ongoing dispute. In its quarterly report on August 2, the bank noted that the claims and asset freezes it faces in Russia surpass the total assets it holds there, suggesting that further asset seizures remain a possibility.

The case is recorded as JPMorgan Chase Bank NA v VTB Bank PJSC, in the U.S. District Court, Southern District of New York.