Forced Liquidation of Previous Russian Financial Institution, OWH
In the wake of Russia's invasion of Ukraine in February 2022, the financial landscape of VTB Bank Europe (now known as OWH i.L., in liquidation) has undergone significant changes. The German financial regulator, Bafin, prohibited VTB from exercising its voting rights in VTB Europe, marking the beginning of a tumultuous journey for the bank.
Since then, OWH has faced numerous challenges, including a reduction in its balance sheet by 5.6% from 2.4 billion to 2.27 billion euros in 2024. The bank's assets have been dwindling, with only approximately 22 employees now working on a half-floor in Frankfurt's banking district, a stark contrast from the original 260. The number of private and corporate clients has also decreased drastically, from 170,000 to 327.
One of the most significant obstacles to OWH's liquidation is a complex, multi-jurisdictional legal dispute with Rusal, a Russian aluminium company. The dispute originated from a 2019 USD/rouble currency swap contract between OWH and RTI (Rusal Trading International, part of the Rusal Group). When Russia attacked Ukraine, the bank demanded a margin call from Rusal, which the company initially refused to pay.
The dispute has spanned multiple jurisdictions, including Germany, Jersey, Russia, and arbitration venues such as London. In 2024, an arbitration court in London ruled in favour of OWH, recognising a claim of 214 million euros. However, Rusal has not complied, arguing that payment would violate sanctions laws in Jersey, as RTI is Jersey-registered and OWH is linked to a sanctioned Russian bank.
The Jersey Royal Court rejected RTI’s public policy argument and ordered enforcement of the LCIA award. The court noted that the relevant sanctions law immunity provisions were not retroactive and RTI should have placed the funds in a designated escrow account in Germany. In Russia, a related case is pending before the Supreme Court’s Economic Disputes Panel, involving questions about joint liability between a foreign entity and its Russian affiliate, which may have implications for this dispute.
OWH is actively seeking to enforce arbitration and court judgments in multiple jurisdictions, aiming to recover the disputed €250 million from Rusal’s entities. The key legal hurdle has been RTI's invocation of sanctions as a defense, which courts in Jersey have so far not accepted.
In addition to the €250 million dispute, OWH is also pursuing an additional 80 million dollars, which is frozen in the US. This amount is being sought in seven jurisdictions, including Germany.
As of mid-2025, the dispute remains complex and multi-jurisdictional but is advancing towards enforcement of OWH’s favorable arbitration outcomes, with at least the Jersey court backing OWH’s claims and ongoing proceedings in Russia awaiting further clarification.
In the midst of this lengthy legal dispute, OWH's efforts to recover the substantial amount of €250 million from Rusal's entities have been met with opposition, as Rusal argues that the payment would violate sanctions laws in Jersey, given RTI's registration there. Despite this roadblock, OWH continues to seek enforcement of their favorable arbitration and court judgments across several jurisdictions.
Meanwhile, the bank is also pursuing an additional $80 million, which is currently frozen in the US. This recovery endeavor is a significant part of OWH's wider strategy to stabilize its financial standing within the tumultuous landscape of the industry, finance, and business.
