Russian court freezes 2 German banks’ assets in gas dispute

A court in St. Petersburg, Russia, has ordered the seizure of assets belonging to Germany’s Deutsche Bank and Commerzbank within the country, according to the state news agency Tass. This ruling is related to a lawsuit concerning the planned construction of a liquefied natural gas terminal in the Baltic Sea.

Deutsche Bank and Commerzbank were among the guarantors for a contract to build a gas processing plant by Renaissance Heavy Industries, a multinational construction firm, and the German company Linde. The project, however, was cancelled due to Western sanctions, leading the banks to withdraw their guarantees.

The cancellation was initiated at the request of RusChemAlliance, a subsidiary of the Russian gas giant Gazprom and the project’s operator, as reported by the German news agency dpa.

RusChemAlliance had paid advances to Linde for the plant’s construction and is now claiming approximately 238.61 million euros ($260 million) from Deutsche Bank and 94.92 million euros ($103 million) from Commerzbank, according to dpa.

Deutsche Bank stated that it has set aside around 260 million euros ($283 million) under an indemnification agreement. The bank also mentioned it needs to evaluate the immediate operational impact in Russia and determine how the Russian courts will handle the claim.

These developments occur against the backdrop of extensive Western sanctions imposed on Russia in response to Moscow’s invasion of Ukraine two years ago.