Russian court imposes 2 billion euro damages on Austrian bank Raiffeisen, 20 January 2025

A Russian court awarded more than 2 billion euros ($2.1 billion) of damages against the biggest Western bank in Russia, Austria's Raiffeisen Bank International, in a landmark ruling underscoring the perils of doing business in Russia.

The case, in which lawyers for Raiffeisen accused the court of using intimidation tactics, is one of the most significant rulings against a Western company still operating in Russia, with one of the largest awards of damages yet.

Raiffeisen (RBI) said it would challenge the judgment against its Russian arm and seek to recover some of the money through legal action.

The bank said that it would also have to set aside a provision in last year's financial accounts to help cover the 2 billion euro damage award...

Monday's ruling illustrated Russia's power to impose its own legal pressure on the Austrian bank.

"This lawsuit, with a huge number of gross violations, is an attempt to force the sale of blocked assets through a Russian court," Andrei Timchuk, partner at Delcredere, representing Raiffeisen Bank, said in a statement.

Timchuk said the defendants' ability to speak, file petitions and present evidence had been limited, accusing the court of seeking to rule in Rasperia's favour as soon as possible.

"The court hearing was attended by unidentified armed people in balaclavas, whom the court sat next to the defendant with the obvious goal of exerting additional pressure," he said...

The dispute followed the failure of an earlier deal that Raiffeisen hoped would allow it unlock some of its frozen billions in Russia.

The case was centred on a claim by Russian investment company Rasperia against builder Strabag, its Austrian shareholders and the Russian arm of Raiffeisen.

RBI had sought to buy a stake in Vienna-based Strabag from Rasperia, which Strabag had linked to Russian tycoon Oleg Deripaska...

Raiffeisen has around 6 billion euros ($6.29 billion) in Russia earned from international payments and from billions of euros of Russian deposits, one person with knowledge of the matter has told Reuters...