EuroChem loses $243 million UK lawsuit against SocGen and ING due to sanctions
EuroChem sued the banks in August 2022 after they refused to pay under the bonds that were issued in relation to the construction of a Russian fertiliser plant by Maire (MTCM.MI), opens new tab subsidiary Tecnimont.
Societe Generale and ING said they were unable to pay because European sanctions were imposed on Melnichenko in March 2022, the month after Russia's invasion of Ukraine.
His wife Aleksandra Melnichenko was subsequently placed under sanctions in June 2022, after Reuters reported Andrey Melnichenko had reassigned his companies to her.
EuroChem argued at a trial at London's High Court earlier this year that the bonds could lawfully be paid.
But Judge Robert Bright dismissed EuroChem's lawsuit, ruling that Andrey Melnichenko has "de facto control" of the EuroChem subsidiary that would benefit from the bonds and the banks were "prohibited from honouring the bonds and paying under them".
EuroChem said in a statement: "We strongly disagree with this decision. We intend to appeal, with legal documents due to be filed in September."
Societe Generale declined to comment, and ING did not respond to a request for comment.
Tecnimont, which said it may have been required to reimburse the banks if EuroChem had succeeded in enforcing the bonds, welcomed the ruling.
Fabio Fagioli, Maire's group general counsel, said in a statement that the ruling brought "an end to years of unnecessary litigation".
($1 = 0.8734 euros)
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