Cancel Deal with Russia, Italian Banks Must Pay Rp7.8 Trillion

JAKARTA – Court Russia order the bank UniCredit Italy to pay USD 479.44 million or the equivalent of IDR 7.8 trillion (Exchange rate IDR 16,351/USD), after canceling the formation of a joint venture with the Russian energy giant, Russia’s Gazprom and Germany’s Linde. This is based on court documents as reported by RT.

UniCredit was one of the guarantor lenders in a deal to build a gas processing plant at Ust Luga, near St. Petersburg, through a joint venture called RusChemAlliance, 50% owned by Gazprom. The project was scrapped because Western sanctions over the Ukraine conflict.

St. Petersburg-based RusChemAlliance St. Petersburg filed the lawsuit as part of a claim seeking compensation from UniCredit for allegedly failing to fulfill its obligations when the deal fell through.

“The claim was fully satisfied,” said the St. Petersburg Arbitration Court. Petersburg in a submission.

It all started when Linde, a German industrial and engineering company, struck a deal with RusChemAlliance to build the plant in 2021. However, the company pulled out of the contract after the Ukrainian war broke out, citing Western sanctions, according to the company’s 2022 report.’

Last month, the Arbitration Court of St. Petersburg and Leningrad Regions took interim measures in RusChemAlliance’s claim against UniCredit. The Italian bank had asked for the proceedings to be dismissed, but the court instead ordered the seizure of $494.4 million worth of property and assets from UniCredit’s Russian business.

UniCredit said in May that the seizure affected only a small portion of the Russian unit’s assets, not the entire subsidiary. UniCredit is one of the few European Union lenders that continues to operate in Russia, after a number of foreign banks left the country due to Western sanctions over Ukraine.

The Italian bank’s subsidiary enables euro payments to and from Russia, and is included in the Russian central bank’s list of 13 systemically important credit institutions.

The Russian court’s move comes after the European Union imposed its 14th round of sanctions targeting Russian liquefied natural gas (LNG) earlier this month. Brussels has banned the re-export of Russian LNG through the bloc, although shipments for domestic EU use are unaffected.

(acres)