‘Coerced’ JPMorgan Chase seeks to end NY lawsuit against Russia’s VTB Bank

By Jonathan Stempel

NEW YORK (Reuters) – JPMorgan Chase on Friday asked a U.S. judge in Manhattan to dismiss its lawsuit against Russia’s VTB Bank over a $439.5 million account frozen after Russia invaded Ukraine, saying VTB “coerced” it into requesting the dismissal.

The largest U.S. bank had sued VTB in April, after the Russian state-owned bank sued in Russia to recover money that had been frozen.

JP Morgan said U.S. sanctions blocked it from releasing the funds, and VTB had agreed to resolve disputes in Manhattan, not Russia.

But JPMorgan said VTB later obtained an injunction from a Russian court requiring that it discontinue the Manhattan lawsuit.

JPMorgan said its request for a discontinuance was “against its will” because it faced uncertain risks in Russia if it violated that injunction.faced uncertain risks in Russia if it violated that injunction.

VTB is Russia’s second-largest bank. It also wants JPMorgan’s lawsuit dismissed, but the banks couldn’t agree on appropriate language for a joint dismissal order. U.S. District Judge Lorna Schofield in Manhattan will review their proposals.

U.S.-based lawyers for VTB did not immediately respond to requests for comment. JPMorgan’s lawyers did not immediately respond to separate requests.

VTB was put on the U.S. Department of the Treasury’s sanctions list in February 2022 following the Ukraine invasion.

On Aug. 6, Schofield fined VTB $500,000 after it failed to comply with her order to seek a stay of the Russian case.

Some of JPMorgan’s assets in Russia have been frozen in connection with the dispute.

In its quarterly report on Aug. 2, JPMorgan said it faces claims and asset freezes in Russia that exceed the available assets it has there, and that asset seizures remain possible.

The case is JPMorgan Chase Bank NA v VTB Bank PJSC, U.S. District Court, Southern District of New York, No. 24-02924.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)