The Bank of New York Mellon is said to be near an agreement to settle a $22.5 billion lawsuit by the Russian government for up to $14 million, after the two sides also agreed to hold talks about a trade-financing pact, according to the New York Times. Lawyers for Bank of New York and for the Russian Federal Customs Service resumed negotiations in Moscow in July after months of on-again, off-again talks, sources said. The judge overseeing the case in Moscow Arbitration Court had been encouraging the two sides to settle. Bank of New York was sued by Miami trial lawyers on behalf of the Russian government, seeking to collect damages related to a Justice Department investigation into a late 1990s scandal in which a bank executive was accused of secretly moving $7.5 billion out of the country. Lawyers for Russia brought the case, based on U.S. antiracketeering laws, not in an American courtroom but in a Moscow commercial court. Bank of New York argued that even if Russia were to have won the case, any decision rendered by the court would have no effect elsewhere. The lawsuit has attracted criticism from legal observers who argue that Russia was flouting the rule of law. A settlement payment by Bank of New York would probably cover court costs, and would be well below the hundreds of millions of dollars that the Russian customs service’s American lawyers had sought. According to court documents, those lawyers would be eligible for about 29 percent of any settlement. Linked to a settlement would be the restarting of a five-year, $400 million trade-finance agreement with Russian state banks, which would help pay for imports and exports, said the report.
Bank of New York Mellon Nears Settlement Over Russian Case
Lawyers for Bank of New York and for the Russian Federal Customs Service resumed negotiations in Moscow in July after months of on-again, off-again talks, sources said.
September 15, 2009