Moscow Court Grants Central Bank Immediate Enforcement Against Euroclear
Russian Court Ruling and Its Implications
Background of the Case
MOSCOW, May 26 (Reuters) - A Moscow arbitration court has granted a Russian central bank request for immediate enforcement of a court ruling requiring Euroclear to pay damages for the European Union's freezing of 18.17 trillion roubles ($252.38 billion) in Russian assets mostly held by the Belgian clearing house, lawyers for Euroclear said on Tuesday.
Jurisdictional Limitations
As Russian courts have no jurisdiction in the EU, the decision will likely have more symbolic weight than practical impact. EU law effectively shields Euroclear for complying with sanctions.
Potential Asset Seizure in Other Jurisdictions
But the Russian central bank could seek the seizure of Euroclear assets in other jurisdictions, especially in countries that Russia deems friendly, such as China, the United Arab Emirates and Kazakhstan.
Details of the Lawsuit
The Russian central bank filed the lawsuit in December in response to a European Union plan to use Russian assets frozen in Europe to back a loan to Ukraine. On May 15 a court in Moscow upheld the central bank's claim for damages from Euroclear.
Scale of Frozen Assets
Of the 300 billion euros ($350 billion) in Russian foreign assets frozen abroad, about two-thirds are in Europe, mostly at Euroclear.
Reactions to the Court Decision
Euroclear's Response
Euroclear's lawyers criticised the court process, saying it violated proper procedure and adding that the written ruling had not yet been published.
Concerns Over Legal Procedure
"The text of the ruling has not yet been released and is unavailable. The hearing was scheduled on very short notice, only two days in advance, which deprived us of our right to defence," the lawyers said.
Legal Basis for Immediate Enforcement
Under Russian law, a court may order immediate enforcement of a judgment if any delay could lead to significant losses or make enforcement impossible.
Central Bank's Statement
The central bank said it considered the court's decision justified.
Rationale for the Ruling
"The Bank of Russia considers the ruling on immediate enforcement to be fair, as the court took into account not only the ongoing nature of the violation but also the real risk that any delay in enforcement would further postpone the restoration of the violated rights," it said in a statement.
Additional Information
($1 = 71.9955 roubles)
(Reporting by Elena FabrichnayaWriting by Maxim Rodionov, Anton KolodyazhnyyEditing by David Goodman and Cynthia Osterman)
