The court recovered damages from Citibank and Citibank in favor of Alfa-Bank

On September 9, the Court of Appeal rejected the defendants’ complaints against the Moscow Arbitration Court’s decision of May 2024. It has now entered into legal force. The requirements are fully met. At first, the British bank Barclays was a co-defendant in the lawsuit, but the plaintiff later dropped the claims against it.

Prime writes that the dispute is related to a loan that Alfa-Bank wanted to provide from its account at Citibank in the spring of 2022 to a client in England who had an account at Barclays Bank. The money did not reach the borrower, so the Russian bank demanded the London-based Citibank to return the payment, but was refused. After this, it filed a claim to recover losses from a foreign bank and the Russian Citibank associated with it.

The defendants argued that Citibank received the plaintiff’s repayment demand after the money had gone to Barclays Bank and therefore it was physically impossible to fulfill it. They were placed in a frozen account due to sanctions. The plaintiff claims that the whereabouts of the money cannot be determined with certainty. Alfa-Bank considered that the Russian Citibank should fulfill its obligations to Citibank. According to the bank’s lawyers, the situation in which Citibank operates and makes profits in Russia, but does not fulfill its obligations to its affiliates, “thus following the sanctions regime that violates the public order of the Russian Federation,” is unfair.