A Moscow court has opened hearings in a colossal legal battle, with Russia's central bank demanding a staggering 18.2 trillion rubles ($232 billion) in damages from the Brussels-based financial clearing house, Euroclear.
The Core of the $232 Billion Claim
The legal action, filed by the Central Bank of Russia, centres on claims that it was unlawfully blocked from accessing and managing its funds and securities held by Euroclear. The proceedings at Moscow's Arbitration Court are being conducted behind closed doors, adding a layer of secrecy to the high-stakes financial dispute.
This lawsuit is a direct response to the sweeping sanctions imposed by the European Union following Russia's full-scale invasion of Ukraine in February 2022. The EU has frozen approximately €210 billion ($244 billion) in Russian state assets, with Euroclear reportedly holding around €193 billion of that total.
EU's Evolving Stance on Frozen Assets
The Moscow court's decision to proceed comes despite a recent shift in the European Union's strategy. Last month, the bloc set aside its initial plan to directly use the frozen Russian assets to aid Ukraine. This move followed a failure to secure guarantees from Belgium that it would be shielded from potential Russian retaliation.
Instead, the EU has opted to borrow 90 billion euros on capital markets. This sum will fund an interest-free loan to Ukraine, intended to support its military and economic needs for the next two years.
Condemnation and Parallel Diplomacy
The Russian central bank has vehemently condemned any use of its frozen reserves, labelling such actions as "illegal" and "contrary to international law." It argues that the sanctions violate the long-standing principle of sovereign immunity for state assets.
Meanwhile, diplomatic efforts concerning the war continue on other fronts. Ukraine's lead negotiator, Rustem Umerov, stated that talks with US officials would resume at the World Economic Forum in Davos, Switzerland. These discussions, which recently took place in Florida with figures including Steve Witkoff and Jared Kushner, have focused on security guarantees and post-war economic recovery plans for Ukraine, though no concrete agreements have been announced.
The outcome of the Moscow lawsuit could set a significant precedent for financial warfare and state asset immunity, with profound implications for international finance and the ongoing conflict.
